Accounting is the art of recording classifying and summarize financial transactions in the preparation of financial statements.It is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. It reveals profit or loss for a given period, and the value and nature of a firm’s assets, liabilities and owners’ equity.It encompass Financial Cost Advance, and managerial Accounting as well. Latest GAAP principles have been updated over here in form of Mcqs respectively.Just follow the Mcqs online quiz being dispatched over here with respect to your preparation for entry admission test NTS PPSC OTS PTS and missllenous job exams simultaneously.
Here we have large collection of Accounting Mcqs for all Students and jobs test preparation purpose. These Accounting Mcqs will be updated on daily basis and added more multiple choice question about Accounting frequently.You can prepare your Accounting Subject for different Entry Test, Jobs Test,Recruitment Test and interviews here.
Accounting Mcqs Online with Answer for Entry Test NTS PPSC PTS OTS
Accounting
Latest Accounting Mcqs Online with Answers.
Which of the following is a Real A/c?
A. Salary A/c
B. Bank A/c
C. Building A/c
D. Goodwill A/c
Right Answer: Building A/c
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When owner withdraw cash for its private use, it is called?
A. Profit
B. Income
C. Expense
D. Drawing
Right Answer: Drawing
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In a three column cash book_______________does not exist?
A. Cash column
B. Bank column
C. Petty cash column
D. Discount column
Right Answer: Petty cash column
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Transactions that a BUSINESS doesn’t record in any specialised journal are recorded in which of the following journals or day books?
A. Cash payments journal
B. Cash receipts journal
C. Purchases return journal
D. General journal
Right Answer: General journal
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An asset posses which of the following?
A. Future economic benefits for the business
B. All kind of benefits for the business
C. Expenses for the business
D. Merits and Demerits for the business
Right Answer: Future economic benefits for the business
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Modern system of book keeping is called?
A. Double entry system
B. American system
C. Single entry system
D. Italic system
Right Answer: Double entry system
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When goods, in which business deals are sold, it is called?
A. Purchases
B. Return inward
C. Sales
D. Return outwards
Right Answer: Sales
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Which of these transactions will not be recorded in cash book?
A. Cash received from debtors
B. Cash paid to creditors
C. Salary remained outstanding
D. Cash deposited with bank
Right Answer: Salary remained outstanding
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Another name of journal is?
A. Specialized journal
B. Day book
C. Cash book
D. Record book
Right Answer: Day book
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In support of business transaction, any written evidence is called?
A. Discount
B. Voucher
C. Allowance
D. Price
Right Answer: Voucher
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Which of these is not a special purpose journal?
A. Cash journal
B. Purchase journal
C. Debtors journal
D. Sales journal
Right Answer: Debtors journal
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Which of the following can be considered as the most important phase of accounting cycle and it is the primarily objective of financial accounting?
A. Identifying transactions
B. Preparing “T Accounts”
C. Preparing financial statements
D. Preparing trial balances
Right Answer: Preparing financial statements
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Which of these errors affect two or more accounts?
A. Errors of complete omission
B. Errors of principle
C. Errors of posting to wrong account
D. All the three
Right Answer: All the three
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Which of the following error is an error of principle?
A. 5,000 received from Sham credited to Ram A/c
B. 5,000 incurred on installation of new plant debited to travelling expenses A/c
C. 500 paid for wages debited to salary A/c
D. 500 being purchase of raw material debited to purchase A/c ` 50
Right Answer: 5,000 incurred on installation of new plant debited to travelling expenses A/c
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Closing stock is generally valued at?
A. Cost Price
B. Market Price
C. Cost price or Market price whichever is higher
D. Cost price or Market price whichever is lower
Right Answer: Cost price or Market price whichever is lower
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Transferring entries from journal to ledger account is commonly known as?
A. Recording
B. Transferring
C. Posting
D. Entry making
Right Answer: Posting
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Which of the following is a Nominal A/c ?
A. Outstanding Salary A/c
B. Rent A/c
C. SBI A/c
D. Debtors A/c
Right Answer: Rent A/c
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Which of the following errors affects the agreement of a Trial Balance?
A. Mistake in balancing an account
B. Omitting to record a transaction entirely in the subsidiary books
C. Recording of a wrong entry in the subsidiary books
D. Posting an entry on the correct side but in the wrong account
Right Answer: Mistake in balancing an account
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Provision is created for?
A. Unknown Liabilities
B. Known Liabilities
C. Creation of Secret Reserves
D. All the Three
Right Answer: Known Liabilities
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Which of the following is a revenue expenses?
A. Raw material consumed
B. Plant purchased
C. Long term loan raised from bank
D. Share Capital
Right Answer: Raw material consumed
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The Bank Reconciliation Statement is prepared?
A. To rectify the mistakes in the Cash Book
B. To arrive at the Bank Balance
C. To arrive at the Cash Balance
D. To bring out the reasons for the difference between the Balance as per Cash Book and the Balance as per Bank Statement
Right Answer: To bring out the reasons for the difference between the Balance as per Cash Book and the Balance as per Bank Statement
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Financial statements differ from management account because?
A. They are mainly prepared for external users of financial information
B. They are more complex and hard to prepare
C. The are the summary of accounting data
D. The are prepared on basis of actual concept
Right Answer: They are mainly prepared for external users of financial information
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The assets which come into existence upon the happening of a certain event are called?
A. Contingent assets
B. Fixed assets
C. Fictitious assets
D. Quick assets
Right Answer: Contingent assets
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A book wherein various accounts are opened is called?
A. Subsidiary books
B. Journal
C. Ledger
D. Trial Balance
Right Answer: Ledger
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The closing balance of a petty cash book is a / an?
A. Liability
B. Gain
C. Assets
D. Loss
Right Answer: Assets
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__ will be credited if goods are given as charity?
A. Cash
B. Charity
C. Purchases
D. Sales
Right Answer: Purchases
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In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life?
A. Straight-line method
B. Written down value method
C. Units-of-production method
D. Sum-of-the years‘-digits method
Right Answer: Straight-line method
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Which of the following specialised journals will record “goods returned by the BUSINESS “?
A. Purchase journal
B. Sales journal
C. Purchases return journal
D. Sales return journal
Right Answer: Purchases return journal
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Office equipments account is classified as _________ account?
A. Nominal
B. Real
C. Cash
D. Capital
Right Answer: Real
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While finalizing the current year‘s accounts, the company realized that an error was made in the calculation of closing stock of the previous year. In the previous year, closing stock was valued more by 50,000. As a result?
A. Previous year‘s profit is overstated and current year‘s profit is also overstated.
B. Previous year‘s profit is understated and current year‘s profit is overstated.
C. Previous year‘s profit is overstated and current year‘s profit is understated.
D. There will be no impact on the profit of either the previous year or the current year.
Right Answer: Previous year‘s profit is overstated and current year‘s profit is understated.
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Which of the following is an one sided error?
A. 500 purchase of old equipment not recorded in the books of A/c at all
B. 500 being expense on travelling expense credited to travelling expenses
C. Both
D. None
Right Answer: 500 being expense on travelling expense credited to travelling expenses
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Goodwill A/c is a/an?
A. Nominal A/c
B. Tangible Asset
C. Intangible Asset
D. Fictitious Asset
Right Answer: Intangible Asset
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The beginnings inventory of the current year is overstated by 5,000 and closing inventory is overstated by 12,000. These errors will cause the net income for the current year by?
A. 17,000 (overstated.
B. 12,000 (understated.
C. 7,000 (overstated.
D. 7,000 (understated.
Right Answer: 7,000 (overstated.
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Credit balance as per Cash Book mean?
A. Surplus cash
B. Bank overdraft
C. Terms deposits with bank
D. None of these
Right Answer: Bank overdraft
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In accounting an Economic event is referred to as?
A. Cash
B. Bank statement
C. Transaction
D. Exchange of money
Right Answer: Transaction
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The normal balance of liability account is?
A. Debit balance
B. Credit balance
C. Cash balance
D. Neither debit nor credit balance
Right Answer: Credit balance
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Buildings account is debited with an amount towards repairs. This is an example of?
A. Error of commission
B. Error of principle
C. Error of omission
D. Compensating error
Right Answer: Error of principle
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Building and furniture are called?
A. Current asset
B. Fictitious asset
C. Tangible asset
D. Fixed assets
Right Answer: Fixed assets
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The gross decrease in economic benefits for the business are what?
A. Expenses
B. Obligations
C. Creditors
D. Income or gain
Right Answer: Expenses
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Which of the following is a liability?
A. Cash
B. Equipment
C. Debtors
D. Creditors
Right Answer: Creditors
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Which of the following is known as an evidence that a transaction took place?
A. Cash receipts journal
B. General journal
C. Source document
D. Cash book
Right Answer: Source document
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Identify the correct sequence of accounting process?
A. Communicating→Recording→Identifying
B. Recording→Communicating→Identifying
C. Identifying→communicating→recording
D. Identifying→recording→communicating
Right Answer: Identifying→recording→communicating
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________ is the gross inflow of economic benefits?
A. Assets
B. Liabilities
C. Income
D. Expenses
Right Answer: Income
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The periodic total of purchase day book is posted to?
A. Creditors A/c
B. Debtors A/c
C. Purchase A/c
D. None
Right Answer: Creditors A/c
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Obligation of the Business are known as?
A. Liabilities
B. Revenues
C. Expenses
D. Assets
Right Answer: Liabilities
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Goods Return by the customer are termed as ?
A. Purchase return
B. Customer return
C. Sales return
D. Inventory return
Right Answer: Sales return
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Credit memo or credit note No. is entered in which of the following journal?
A. General journal
B. Cash journal
C. Purchase journal
D. Sales return day book
Right Answer: General journal
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Bank reconciliation is a statement prepared to reconcile?
A. Trial balance
B. Cash book
C. Bank A/c
D. Cash as per cash book with bank balance as per bank pass book
Right Answer: Cash as per cash book with bank balance as per bank pass book
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If debit balance is greater than creadit balance then the account blance will be?
A. Credit balance
B. Debit and credit balance
C. Cash balance
D. Debit balance
Right Answer: Debit balance
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Petty cash balance is a/an?
A. Assets
B. Expenditure
C. Liability
D. None
Right Answer: Assets
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Any donation received for a specific purpose is a?
A. Liability
B. Assets
C. Revenue receipts
D. Capital receipts
Right Answer: Capital receipts
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Net loss occurs when?
A. Expenses are greater than Income
B. Expenses are less than Income
C. Expenses=Income
D. Liabilities are greater than income
Right Answer: Expenses are greater than Income
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Which of the following statements are / is true? – Events after Balance Sheet are?
A. All the significant events after the Balance Sheet date
B. The events after Balance Sheet date but before submitting it to the Registrar of Companies
C. The events after Balance Sheet date but before its approval by the board
D. All changes after Balance Sheet date before its approval
Right Answer: The events after Balance Sheet date but before its approval by the board
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Which of the following factors are primarily considered to determine the economic life of an asset?
A. Passage of time, asset usage, and obsolescence
B. Tax regulations and SEBI guidelines
C. Tax regulations and asset usage
D. SEBI guidelines and Asset usage
Right Answer: Passage of time, asset usage, and obsolescence
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Which of the following specialized journals records “goods returned by customers”?
A. Purchase journal
B. Sales journal
C. Purchases return journal
D. Sales return journal
Right Answer: Sales return journal
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A sale of Rs. 50.000 to A was entered as a sale to B. This is an example of?
A. Error of omission
B. Error of commission
C. Compensating error
D. Error of principle
Right Answer: Error of commission
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Discount received is a/an?
A. Asset
B. Expense
C. Liability
D. Revenue
Right Answer: Revenue
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The amount invested by the proprietor to start the business is called?
A. Capital
B. Business
C. Drawings
D. All of them
Right Answer: Capital
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The main objective of providing depreciation is to?
A. Calculate the true profit
B. Show the true financial position in the Balance Sheet
C. Provide funds for replacement of fixed assets
D. Both A. and B. above
Right Answer: Show the true financial position in the Balance Sheet
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Which of the following is not depreciated?
A. Building
B. Land
C. Plant and Machinery
D. Office equipment
Right Answer: Land
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Liabilities are which of the following?
A. Resources
B. Obligations
C. Future benefits
D. Expenses
Right Answer: Obligations
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If a company has contingent liabilities, they appear in the?
A. Balance Sheet
B. Directors‘ report
C. Notes on account to Balance Sheet
D. Chairman‘s report
Right Answer: Notes on account to Balance Sheet
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The entry for creating a Provision for bad debts is?
A. Debit Provision for Bad Debts A/c and credit Debtors A/c
B. Debit Debtors A/c and credit Provision for Bad Debts A/c
C. Debit Provision for Bad Debts A/c and credit Profit & Loss A/c
D. Debit Profit and Loss A/c and credit Provision for Bad Debts A/c.
Right Answer: Debit Profit and Loss A/c and credit Provision for Bad Debts A/c.
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Building account is classified as _________ account?
A. Nominal
B. Real
C. Cash
D. Capital
Right Answer: Real
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Which of the following is a real account?
A. Office equipment
B. Rent expenses
C. Rent income
D. Insurance expense
Right Answer: Office equipment
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The excess of current assets over current liabilities is called?
A. Working Capital
B. Circulating capital
C. Fixed capital
D. Trading capital
Right Answer: Working Capital
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Which of the following errors is an error of omission?
A. Sale of ` 100 was recorded in the Purchases Journal
B. Wages paid to Mohan have been debited to his account
C. The total of the sales journal has not been posted to the Sales Account
D. Repairs to buildings have been debited to buildings account
Right Answer: The total of the sales journal has not been posted to the Sales Account
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_is also known as Appraisal system of depreciation?
A. Inventory system
B. Survey system
C. Annuity system
D. Insurance
Right Answer: Inventory system
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Which one of the following is a capital expenditure?
A. Compensation paid to Directors on termination of their services
B. Expenditure incurred in connection with the renewal of a Trade Mark.
C. Gratuities paid to Directors on termination of their services.
D. Royalty paid in installments for the purchase of rights to manufacture and sell patient medicines.
Right Answer: Compensation paid to Directors on termination of their services
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Which of the following accounts can be classified as a real account?
A. Rent expenses account
B. Rent income account
C. insurance expenses account
D. Cash account
Right Answer: Cash account
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Which of the following account with normal balance is shown at the credit side of a trial balance?
A. Cash account
B. Bank account
C. Equipment account
D. Accrued expenses account
Right Answer: Accrued expenses account
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Which of these documents is not required for Bank Reconciliation?
A. Bank column of Cash Book
B. Bank Pass Book
C. Bank Statement
D. Trial Balance
Right Answer: Trial Balance
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________ is a separate legal entity that Total capital can be divided in many shares?
A. Partnership
B. Sole proprietorship
C. Company
D. Non-profit organization
Right Answer: Company
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Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of?
A. Error of principle
B. Error of commission
C. Error of omission
D. Error of duplication
Right Answer: Error of principle
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Depreciation is a process of?
A. Valuation
B. Valuation and allocation
C. Allocation
D. Appropriation
Right Answer: Allocation
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Auditing is what?
A. Reporting the financial information
B. Examination of financial statements
C. Preparation financial statements
D. maintaining the ledger records
Right Answer: Examination of financial statements
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An asset must be _______ by the business to be shown as an asset in its “balance sheet”?
A. Possessed
B. Owned
C. Controlled
D. Used
Right Answer: Controlled
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Identify the asset from the following?
A. Cash and cash equivalent
B. Creditors
C. Notes payable
D. Bank loan
Right Answer: Cash and cash equivalent
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Cost of goods sold excludes?
A. Opening Stock
B. Carriage inward
C. Wages & Salary
D. Postage & Stamps
Right Answer: Postage & Stamps
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Sales return is also known as?
A. Return received
B. Return Payed
C. Return inward
D. Return outward
Right Answer: Return inward
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Which of the following is an external cause of depreciation?
A. Routine repair and maintenance
B. Misuse
C. Obsolescence
D. Wear and tear
Right Answer: Obsolescence
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Specialized journals are more adequate for which TYPE OF BUSINESSES?
A. Small businesses
B. Big businesses
C. Sole proprietorship
D. Partnership
Right Answer: Big businesses
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Which is the most important characteristic that all assets of a business have?
A. Long life of assets
B. Value of assets
C. Intangible nature of assets
D. Future economic benefits
Right Answer: Future economic benefits
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Tax deducted at source A/c appears in?
A. Assets side
B. Liability side
C. Profit & Loss A/c
D. Debited to Capital A/c
Right Answer: Assets side
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Revenue is generally recognized as being earned at that point of time when?
A. sale is effected
B. cash is received
C. production is completed
D. debts are collected
Right Answer: sale is effected
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The periodic total of purchase day book is posted to?
A. Purchase register
B. Purchase A/c
C. Cash purchase A/c
D. Credit purchase A/c
Right Answer: Purchase A/c
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Double entry means?
A. Entry in two sets of books
B. Entry at two ends
C. Entry at two dates
D. Entry for two aspects of the transaction
Right Answer: Entry for two aspects of the transaction
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SALE of old furniture” will be recorded in which of the following specialised journals?
A. Purchase journal
B. Sales journal
C. General journal
D. Cash receipt journal
Right Answer: General journal
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Cash book records?
A. Only cash sales
B. All types of cash receipts and payments
C. Only revenue receipts
D. Only capital receipts
Right Answer: All types of cash receipts and payments
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Sales on credit is recorded in which of the following journal?
A. Purchase journal
B. Sales journal
C. Purchases return journal
D. Sales return journal
Right Answer: Sales journal
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Which of the following should not be treated as revenue expenditure?
A. Interest on loans and debentures
B. Annual fire insurance premiums on Plant and Equipment
C. Sales tax paid in connection with the purchase of office equipment
D. Small expenditures on long- lived assets, such as ` 20 for a paper weight.
Right Answer: Sales tax paid in connection with the purchase of office equipment
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Purchase journal is kept to record?
A. All purchases of goods
B. All credit purchases of goods
C. All credit purchases
D. None of these
Right Answer: All credit purchases of goods
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The concession received on the price of defective goods is called?
A. Discount
B. Cash discount
C. Allowance
D. Trading discount
Right Answer: Allowance
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Which of the following will affect the agreement of a trial balance?
A. Complete omission of a transaction
B. Partial omission of a transaction
C. Error of principle
D. Compensating errors
Right Answer: Partial omission of a transaction
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Which of the following is the internal user of financial statements?
A. Creditor of the business
B. Government agency
C. Shareholder of the business
D. Manager of the business
Right Answer: Manager of the business
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Which of the following statements is true?
A. If a Trial Balance tallies, it always means that none of the transactions has been completely omitted
B. A Trial Balance will not tally if a transaction is omitted
C. A customer to whom goods have been sold on credit cannot avail himself of a cash discount
D. A credit balance in the Pass Book indicates excess of deposits over withdrawals
Right Answer: A credit balance in the Pass Book indicates excess of deposits over withdrawals
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The real accounts are accounts of Assets, liabilities and?
A. Expenses
B. Revenues
C. Capital
D. Drawing
Right Answer: Capital
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Debit side of Bank Pass book corresponds to?
A. Credit side of Cash Book
B. Debit side of Cash Book
C. Debit side of Trial Balance
D. Credit side of Balance Sheet
Right Answer: Credit side of Cash Book
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When a person purchasing goods on credit he becomes a_________in the books of the seller?
A. Debtor
B. Creditor
C. Defaulter
D. Offender
Right Answer: Debtor
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Which of the following is a representative Personal A/c?
A. Outstanding Salary A/c
B. Rent A/c
C. SBI A/c
D. Bad debts A/c
Right Answer: Outstanding Salary A/c
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