Accounting MCQs

Question 1

A reserve is charge against:

Accepted Answer

Profit and loss appropriation account

Answer

Trading account

Answer

Profit and loss account

Answer

None of these

Question 2

Accounting standard-AS-2 provides that inventories should be valued at

Accepted Answer

lower of historical cost and net realisable value

Answer

lower of historical cost and market value

Answer

only estimated selling price

Answer

All of these

Question 3

Donations received by a non-profit organisation are usually a . . . . . . . .

Accepted Answer

revenue receipt

Answer

capital receipt

Answer

capital expenditure

Answer

revenue expenditure

Question 4

Ledger is also called . . . . . . . .

Accepted Answer

principal book of accounts

Answer

cash books

Answer

subsidiary books

Answer

petty cash book

Question 5

The fundamental accounting equation, Assets = Equities + liabilities is the formal expression of:

Accepted Answer

dual aspect concept

Answer

matching concept

Answer

going - concern concept

Answer

money measurement concept

Question 6

Which of the following errors are revealed by trial balance?

Accepted Answer

Wrong totalling of the book of original entry

Answer

Omission of an amount from the trial balance

Answer

Posting of the wrong amount

Answer

None of these

Question 7

When a bill is drawn by A on B, it is debited in the books of A to . . . . . . . .

Accepted Answer

Bills Receivable account

Answer

Cash account

Answer

B's account

Answer

Bills Payable account

Question 8

A business entity has assets of Rs. 26,000 and liabilities of Rs. 6,000. Owner's equity in this case is:

Accepted Answer

Rs. 20,000

Answer

Rs. 32,000

Answer

Rs. 26,000

Answer

Rs. 6,000

Question 9

Excess of income over expenditure is shown on the . . . . . . . . side of income and expenditure account.

Accepted Answer

Debit

Answer

Credit

Answer

Upper

Answer

Lower