Basic Accounting MCQs with answers pdf | Financial Accounting MCQ pdf

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)

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