Accounting MCQs

Question 1

Term 'Credit' means _____ by the business

Accepted Answer

Receiving of benefits

Answer

It has no effect on business

Answer

Providing benefits

Answer

It depends upon items

Question 2

When a liability is reduced or decreased, it is recorded on the:

Accepted Answer

Left or debit side of the account

Answer

Left or credit side of the account

Answer

Right or debit side of the account

Answer

Right or credit side of the account

Question 3

When capital is increased by an amount, it is recorded on the:

Accepted Answer

Right or credit side of the account

Answer

Left or credit side of the account

Answer

Right or debit side of the account

Answer

Left or debit side of the account

Question 4

What type of expenses are paid out of Gross Profit?

Accepted Answer

All of the above

Answer

General expenses

Answer

Financial expenses

Answer

Selling expenses

Question 5

Which of the following is NOT an example of intangible assets?

Accepted Answer

Land

Answer

Franchise rights

Answer

Goodwill

Answer

Patents

Question 6

Which of the following is an example of business liability?

Accepted Answer

Creditors

Answer

Land

Answer

Building

Answer

Cash

Question 7

The unfavorable balance of Profit and Loss account should be

Accepted Answer

Subtracted from capital

Answer

Added to liabilities

Answer

Subtracted from current assets

Answer

Subtracted from liabilities

Question 8

Which of the following account will be credited, if business bought goods on credit from Mr. Z?

Accepted Answer

Mr. Z account

Answer

Purchases account

Answer

Cash account

Answer

Sales account

Question 9

Interest on loan paid by business is an example of

Accepted Answer

Revenue expense

Answer

Income

Answer

Asset

Answer

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