Basic Accounting MCQs with answers pdf | Financial Accounting MCQ pdf for the preparation of academic and competitive exams.
Basic Accounting MCQs with answers
1) ___is the art of recording, classifying, and summarizing in a significant manner, in terms of money transactions and events that are, at least in part, of a financial character, and interpreting the results thereof.
a) Journal Entry
b) Ledger
c) Accounting
d) None
Answer: (c)
2) Any form of accounting that enables a business to be conducted more efficiently can be regarded as ___ accounting.
a) Financial
b) Management
c) Cost
d) None
Answer: (b)
3) Inflation accounting is also called ___
a) Revaluation
b) Replacement
c) None
d) All
Answer: (b)
4) A process of accounting that recognizes the impact of transactions on the financial statements in the time periods when revenues and expenses occur instead of when cash is received or disbursed is called ___ basis.
a) Accrual
b) Cash
c) None
d) a & b
Answer: (a)
5) A process of accounting where revenue and expense recognition occur when cash is received and disbursed is called ___.
a) Cash
b) Accrual
c) None
d) a & b
Answer: (a)
6) ___ they are the present obligations arising from past events. It also arises when an asset is created or acquired.
a) Asset
b) Liabilities
c) Equity
d) All
Answer: (b)
7) ___ is an increase in economic benefits during the accounting period in the form of inflows or enhancements of assets or a decrease in liabilities, thereby increasing equity and net worth.
a) Income
b) Equity
c) Expenses
d) None
Answer: (a)
8) ___ is a residual interest in the assets after deducting liabilities
a) Income
b) Equity
c) Expenses
d) None
Answer: (b)
9) ___ concept implies that each transaction and event must be expressible in monetary terms.
a) Money measurement
b) Business Entity
c) Going Concerned
d) None
Answer: (a)
10) ___ implies that a business unit is separate and distinct from the person who owns or controls it
a) Money measurement
b) Business Entity
c) Going Concerned
d) None
Answer: (b)
11) ___ concept says that to recognize revenue, it has to be realized.
a) Accrual concept
b) Matching concept
c) Realization concept
d) None
Answer: (c)
12) The conventions, concepts, rules, and procedures that together make up accepted accounting practice at any given time are called ___
a) AICPA
b) GAAP
c) GAPA
d) None of the above
Answer: (b)
13) ___ is the after-tax cash flow generated by a business minus the cost of the capital it has deployed to generate that cash flow.
a) EVA
b) GAAP
c) AICPA
d) None of the above
Answer: (a)
14) Prepaid Insurance A/cis ___ A/c
a) Real
b) Personal
c) Nominal
d) None
Answer: (c)
15) Outstanding wages A/c is ___ A/c
a) Personal
b) Real
c) Nominal
d) None
Answer: (a)
16) Bad Debts A/c is ___ A/c
a) Real
b) Personal
c) Nominal
d) None
Answer: (c)
17) The ___ accounting system provides a system of checks and balances
a) Single Entry
b) Financial Entry
c) Double Entry
d) Triple Entry
Answer: (c)
18) It means that cash is received by the business from the proprietor. It results in the immediate receipt of cash
a) Antony commenced business with Rs 10,000
b) Bought goods for cash rs 2,000
c) Charged commission to Chander rs 100
d) Sold goods for cashrs 1000
Answer: (a)
19) Debt may be of ___ types
a) 3
b) 2
c) 5
d) None
Answer: (a)
20) Creditor may be ___ types:
a) 3
b) 2
c) 4
d) 5
Answer: (c)
21) ___ is a brief explanation to a journal entry, given below the journal entry, within brackets
a) Narration
b) Ledger
c) Credit
d) Debit
Answer: (a)
22) ___ is written in a ledger A/c at the time of its closing to indicate that the balance in that A/c has been carried down to the next period.
a)c/f
b) c/d
c) b/d
d) b/f
Answer: (b)
23) A cashbook, which is used to record both cash and bank transactions, is referred to as a ___ column cash book.
a) 1
b) 2
c) 3
d) 4
Answer: (b)
24) ___ provides internet technology to navigate the vast resources available in the market.
a) WWW
b) Internet
c) Intranet
d) None
Answer: (a)
25) ___ are devices that allow direct data entry into the computer without doing any manual data entry.
a) Standard Programmes
b) Scanner
c) Flow Charts
d) None
Answer: (b)
26) ___ helps conduct business electronically with the help of internet technology.
a) Parity Bit
b) E-Commerce
c) Computer Checks
d) None
Answer: (b)
27) Mine quarries is an example of ___ assets
a) Fictitious assets
b) Liquid assets
c) Intangible assets
d) wasting assets
Answer: (d)
28) Which of the following accounts is prepared to find out the cost of production?
a) Manufacturing account
b) Trading account
c) Profit and Loss account
d) Balance Sheet
Answer: (a)
29) Sale proceeds of fixed assets are a
a) Capital profit
b) Revenue profit
c) Capital receipt
d) Revenue receipt
Answer: (c)
30) Preliminary expenses are an example of
a) Capital expenditure
b) Revenue expenditure
c) Deferred Revenue expenditure
d) Capital loss
Answer: (c)
31) Petty Cashbook is prepared to
a) Meet the requirements of small business
b) Meet the small expenses paid in cash
c) Cover small and miscellaneous incomes
d) All of the above
Answer: (d)
32) Who draws B/E?
a) Debtor
b) Bank
c) Fixed asset
d) Creditor
Answer: (a)
33) Commerce is ___
a) Industry and trade
b) Trade and aids to trade
c) Industry and business
d) Industry and aids to trade
Answer: (b)
34) In the double-entry system, every business transaction affects
a) Two sides of the same account
b) The same side of two accounts
c) Two accounts only
d) Two or more accounts
Answer: (c)
35) The concept of conservatism takes into account
a) All expected income and losses
b) All expected income but no losses
c) All expected losses but no expected income
d) None
Answer: (c)
36) Financial position of the business means
a) Position about profits and losses
b) Position about incomes and expenses
c) Position about liquid funds
d) What the business owes to others and what it owns at a given point in time
Answer: (d)
37) A Bank Reconciliation Statement is a
a) Part of Pass Book
b) Part of Cash Book
c) Statement prepared by the bank
d) Statement prepared by the customer
Answer: (d)
38) Income from the sale of scrap is usually shown in
a) Profit and Loss account
b) Trading account
c) Manufacturing account
d) A11 of the above
Answer: (a)
39) Sales to Ram Rs. 450 posted to his account as Rs. 550 would affect
a) Sales account
b) Ram’s account
c) Cash account
d) None
Answer: (b)
40) The trial balance contains the balances of
a) All real and personal accounts
b) All personal and nominal accounts
c) All nominal and real accounts
d) All accounts
Answer: (a)
41) The book value of old furniture was Rs. 1,500. It was sold for Rs. 500. The difference is a ___.
a) Revenue expenditure
b) Revenue loss
c) Capital expenditure
d) Capital loss
Answer: (d)
42) Which of the following expenses will be shown in the profit and loss account?
a) Wages
b) Carriage inwards
c) None of the above
d) Both (a) and (b) above
Answer: (b)
43) Overcasting of Purchases Journal would affect
a) Sales Account only
b) Purchases Account only
c) Supplier’s Account and Purchases Account
d) Sales Account and Purchases Account
Answer: (c)
44) Salary paid to Rehman was recorded in the Cashbook as payment to Rehman. This is an error of
a) Omission
b) Commission
c) Compensating errors
d) Principle
Answer: (d)
45) According to the money measurement concept, which transaction will be recorded in the books of the account?
a) Health of manager
b) Quality of goods
c) Value of building
d) Qualifications of employees
Answer: (c)
46) Revenue is said to be realized when
a) The sale is made
b) Goods are manufactured
c) Cash is received
d) Sale is made and cash is received
Answer: (c)
47) Discount allowed on the issue of shares is an example of
a) Capital loss
b) Capital expenditure
c) Revenue expenditure
d) Deferred revenue expenditure
Answer: (b)
48) Repair incurred for using a second-hand car purchased recently
a) Capital expenditure
b) Revenue expenditure
c) Capital loss
d) Deferred revenue expenditure
Answer: (a)
49) Sales are equal to
a) Cost of Goods Sold + Gross Profit
b) Cost of Goods Sold – Gross Profit
c) Gross Profit – Cost of Goods Sold
d) Cost of Goods Sold – Stock
Answer: (a)
50) Interest in drawings is regarded as
a) Expenditure for the business
b) Loss for the business
c) Gain for the business
d) Liability for the business
Answer: (c)
You may download the pdf form, If you like the post on Basic Accounting MCQs with Answers, please do not forget to share it on social media.
Read More:
Prepaid insurance is a Nominal account hoga …. Please clear the doubt
Q no 14
Prepaid insurance is a personal account and is shown on the assets side of a balance sheet.
Prepaid insurance is a personal account and is shown on the assets side of a balance sheet.