Accounting MCQs

Question 1

Profit on the sale of furniture in a non profit organisation is to be shown on the:

Accepted Answer

Credit side of Income and Expenditure account

Answer

Credit side of Profit and Loss a/c

Answer

Receipt side of Receipts and Payment account

Answer

Assets side of Balance Sheet

Question 2

Pooling of interest is a method of

Accepted Answer

accounting of amalgamation

Answer

valuation of inventory

Answer

calculation of purchase consideration

Answer

valuing goodwill

Question 3

Match List-I with List-II and select the correct answer: List-I List-II a. Separate Entity concept 1. Past events b. Dual Aspect concept 2. Accounting Equations c. Money Measure concept 3. Business is distinct from its owner d. Historical concept 4. Translation of events/transaction in money terms

Accepted Answer

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

Answer

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

Answer

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

Answer

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

Question 4

Which one of the following statements is not true?

Accepted Answer

Higher operating ratio indicates higher profits

Answer

Conversion of debentures into preference shares will decrease debt-equity ratio

Answer

Long-term liabilities due for payment within a year should be treated as current liabilities

Answer

Cost of sales is a better numerator than sales while calculating stock turnover

Question 5

The statement of changes in financial position shows

Accepted Answer

Sources and uses of funds

Answer

Assets and Liabilities

Answer

Income and Expenses

Answer

None of these

Question 6

Which of the following statements is not correct?

Accepted Answer

Managerial accounting includes details of quantitative information only

Answer

Managerial accounting and cost accounting both are complementary to each of the in nature

Answer

Managerial accounting is concerned with the accounting information that is useful to management

Answer

Managerial accounting depends on cost accounting

Question 7

Depreciation takes into account

Accepted Answer

Fall in value of asset

Answer

Decrease in usefulness

Answer

Decrease in the obsolescence of the asset

Answer

Decrease in asset due to wear and tear

Question 8

A company shifted its factory after construction of a new building. During this process, Rs. 20,000 was spent on demolishing the old structure and Rs. 2,000 in moving the old stock. How will these expenses be classified?

Accepted Answer

Capital and revenue expenditure respectively

Answer

Capital expenditure

Answer

Revenue expenditure

Answer

Deferred revenue expenditure

Question 9

Match the following List-I List-II a. The document from which the returns to suppliers are recorded is known as . . . . . . . . 1. Assets b. Wages paid on erection of a new machinery should be debited to . . . . . . . . 2. Debit note c. Prepaid expense is an item of . . . . . . . . 3. Credit note d. The receiver of goods returned will send a . . . . . . . . to the person, who return the goods. 4. Machinery account

Accepted Answer

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

Answer

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

Answer

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

Answer

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