Accounting MCQs

Question 1

Identify the true statement of the following.
1. Balance sheet is always prepared from the point of view of the business, but not from, that of the owners.
2. The financial relationship of the business to its owners is shown in the balance sheet.
3. Balance sheet is always related to a period of time.

Accepted Answer

All of the above

Answer

Both 1 and 2

Answer

Both 2 and 3

Answer

Both 1 and 3

Question 2

Assertion (A): A joint stock company can issue Bonus shares out of its Capital Reserve. Reason (R): The company can satisfy the share holders and avoid the outflow of cash from business by utilizing only the Capital reserve for the issue of bonus shares. Select the correct answer:

Accepted Answer

(A) is true but (R) is false

Answer

Both (A) and (R) are true and (R) is the correct explanation of (A)

Answer

Both (A) and (R) are true, but (R) is not correct explanation of (A)

Answer

(A) is false but (R) is true

Question 3

Opening Stock Rs. 15,000 Purchases Rs. 40,000 Cost of goods sold Rs. 52,000 Sales Rs. 57,000 Gross profit on gross loss is?

Accepted Answer

Rs. 5,000

Answer

Rs. 12,000

Answer

Rs. 5,000 (Loss)

Answer

Rs. 7,000

Question 4

Secret Reserve in a concern be created by the following:

Accepted Answer

Both A & B

Answer

Undervaluing fixed assets

Answer

Treating revenue expenses as capital expenses

Answer

Undervaluing liabilities

Question 5

Match List-I with List-II and choose correct answer: List-I List-II P. Partner's loan 1. Debit balance of profit and loss Q. Death of a partner 2. 6% interest R. Loss in business 3. Joint life insurance policy S. Revolution account 4. Profit and loss adjustment account

Accepted Answer

P-2, Q-3, R-1, S-4

Answer

P-1, Q-2, R-3, S-4

Answer

P-3, Q-2, R-1, S-4

Answer

P-4, Q-1, R-2, S-3

Question 6

Match the following: List-I List-II a. Partnership can be formed for the purpose of carrying . . . . . . . . 1. incoming partner b. Guaranteed profit is generally given to . . . . . . . . 2. business c. Every partner is a joint . . . . . . . . of the partnership property. 3. nominal d. Partners, who do not contribute any capital and have no interest in the business are known as . . . . . . . . partners. 4. owner

Accepted Answer

a-2, b-1, c-4, d-3

Answer

a-2, b-4, c-1, d-3

Answer

a-4, b-3, c-2, d-1

Answer

a-4, b-1, c-2, d-3

Question 7

On 1 st January 1992 there was a balance of Rs. 4,000 in the plant and machinery account. An addition of Rs. 2,000 was made on 1 st July 1992. Accounts were closed for the year on 31 st December 1992. If depreciation was charged at 10% per annum, the balance in the plant and machinery account on the closing date would be:

Accepted Answer

Rs. 5,500

Answer

Rs. 5,300

Answer

Rs. 5,400

Answer

Rs. 5,600

Question 8

Net profit before following adjustment is Rs. 3,60,000 Outstanding salary is Rs. 20,000 Prepaid insurance is Rs. 26,000 After adjustment net profit is

Accepted Answer

Rs. 3,66,000

Answer

Rs. 3,80,000

Answer

Rs. 3,46,000

Answer

Rs. 3,86,000

Question 9

Match the following: List-I List-II a. Revaluation account is prepared at the time of 1. may or may not be surrendered at the time of retirement of a partner b. Joint Life Policy 2. to settle the claim of the outgoing partner c. Premium on Joint Life Policy taken up on the lives of all partners is paid by 3. admission of a partner d. The objective of taking Joint Life Policy by a partnership firm is 4. partnership firm

Accepted Answer

a-3, b-1, c-4, d-2

Answer

a-4, b-3, c-2, d-1

Answer

a-2, b-1, c-4, d-3

Answer

a-2, b-4, c-1, d-3

Opening Stock	Rs. 15,000
Purchases	Rs. 40,000
Cost of goods sold	Rs. 52,000
Sales	Rs. 57,000

List-I	List-II
P. Partner's loan	1. Debit balance of profit and loss
Q. Death of a partner	2. 6% interest
R. Loss in business	3. Joint life insurance policy
S. Revolution account	4. Profit and loss adjustment account

List-I	List-II
a. Partnership can be formed for the purpose of carrying . . . . . . . .	1. incoming partner
b. Guaranteed profit is generally given to . . . . . . . .	2. business
c. Every partner is a joint . . . . . . . . of the partnership property.	3. nominal
d. Partners, who do not contribute any capital and have no interest in the business are known as . . . . . . . . partners.	4. owner

List-I	List-II
a. Revaluation account is prepared at the time of	1. may or may not be surrendered at the time of retirement of a partner
b. Joint Life Policy	2. to settle the claim of the outgoing partner
c. Premium on Joint Life Policy taken up on the lives of all partners is paid by	3. admission of a partner
d. The objective of taking Joint Life Policy by a partnership firm is	4. partnership firm