Accounting MCQs

Question 1

Ledger is an accounting book in which

Accepted Answer

All the Real, Personal and Nominal Accounts are opened

Answer

Only Real Accounts are opened

Answer

Only Real and Personal Accounts are opened

Answer

Only Trading and Profit and Loss Accounts are opened

Question 2

The user group of accounting information is:

Accepted Answer

All the above

Answer

Owners of the business

Answer

Managers of the business

Answer

Potential investors of the business

Question 3

In case of 'installment payment system', total interest receivable by the seller is credited to

Accepted Answer

Interest Suspense Account

Answer

Interest Account

Answer

Sales Account

Answer

None of the above

Question 4

Which of the following is not an accounting equation?

Accepted Answer

Assets = Liabilities - Capital

Answer

Assets = Liabilities + Capital

Answer

Liabilities = Assets - Capital

Answer

Assets - Liabilities = Capital

Question 5

The study of the effects of output volume on revenue, expenses and net income is known as

Accepted Answer

Cost Volume Profit Analysis

Answer

Budgeting

Answer

Cash Flow

Answer

Cost Flow

Question 6

Which one of the following statements is not correct?

Accepted Answer

Goodwill is a fictitious asset

Answer

As per AS-26 only purchased goodwill to be recorded in the books of accounts

Answer

Self generated goodwill will have to be adjusted through partners Capital Accounts

Answer

Goodwill is an intangible asset

Question 7

Which of the following formula is correct to calculate provision on debtors to be transferred to Profit and Loss Account?

Accepted Answer

Bad Debts + New Bad Debts + New Provision - Old Provision

Answer

Bad Debts + New Provision - Old Provision

Answer

Provision on Debtors + New Provision + Bad Debts - Further Bad Debts

Answer

New Provision on Debtors + Old Provision made for Bad Debts

Question 8

Profit on re-issue of forfeited share is transferred to which account?

Accepted Answer

Capital reserve account

Answer

Security premium account

Answer

Drawing account

Answer

Share forfeiture account

Question 9

Debentures can be redeemed by:

Accepted Answer

Any of the method mentioned in A, B and C above

Answer

Purchase of own debentures in the open market

Answer

Converting them into a new class of debentures

Answer

Converting them into shares