accounting MCQs – Page 11

Practise multiple-choice questions from accounting for competitive examinations and subject revision. Review each marked answer and report any item that may be outdated or unclear.

accounting Mcqs

201. Depreciation is a process of____________?
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A. Appropriation

B. Allocation

C. Valuation and allocation

D. Valuation

202. Which of these transactions will not be recorded in cash book?
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A. Salary remained outstanding

B. Cash paid to creditors

C. Cash deposited with bank

D. Cash received from debtors

203. The amount payable to a person as consideration for the use of rights vested in him is
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A. Installment

B. Dividend

C. Purchase consideration

D. Royalty

204. An asset posses which of the following?
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A. All kind of benefits for the business

B. Merits and Demerits for the business

C. Expenses for the business

D. Future economic benefits for the business

205. Which of the following accounts will be debited if the businesss owner withdraws cash from business for his personal use?
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A. Cash

B. Stock

C. Drawings

D. Business

206. Which of the following is not correct about Errors?
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A. Errors which affect one account can be errors of posting

B. Errors of omission arise when any transaction is left to be recorded

C. Errors of carry forward from one year to another year affect both Personal and Real A/c

D. Errors of commission arise when any transaction is recorded in a fundamentally incorrect manner

207. Revenue is generally recognized as being earned at that point of time when?
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A. production is completed

B. sale is effected

C. cash is received

D. debts are collected

208. ________ is the gross inflow of economic benefits?
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A. Assets

B. Expenses

C. Liabilities

D. Income

209. Journals are also referred as_____________?
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A. T account

B. Book of original entries

C. Book of entries

D. Books of economic event

210. General journal is a book of _______ entries?
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A. Original

B. First

C. Generic

D. Secondary

211. Sales on credit is recorded in which of the following journal?
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A. Sales return journal

B. Sales journal

C. Purchase journal

D. Purchases return journal

212. Which of these is not a special purpose journal?
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A. Purchase journal

B. Debtors journal

C. Sales journal

D. Cash journal

213. Which of the following is the practical implementation of the accounting equation?
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A. Income statement

B. Cash flow statement

C. Statement of financial position

D. Statement of changes in equity

214. The main objective of providing depreciation is to?
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A. Calculate the true profit

B. Show the true financial position in the Balance Sheet

C. Provide funds for replacement of fixed assets

D. Both A. and B. above

215. Which of the following error is an error of principle
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A. 5,000 received from Sham credited to Ram A/c

B. 5,000 incurred on installation of new plant debited to travelling expenses A/c

C. 500 being purchase of raw material debited to purchase A/c ` 50

D. 500 paid for wages debited to salary A/c

216. Identify the asset from the following:
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A. Notes payable

B. Cash and cash equivalent

C. Creditors

D. Bank loan

217. Goodwill A/c is a/an__________?
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A. Fictitious Asset

B. Nominal A/c

C. Tangible Asset

D. Intangible Asset

218. Revenue receipts are shown in___________?
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A. Manufacturing A/c

B. Profit and Loss appropriation A/c

C. Balance Sheet

D. Trading and Profit and Loss A/c

219. Find out the value of assets if: Liabilities=$5000 and Capital=$1000
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A. $3,000

B. $4,000

C. $6000

D. $7,000

220. Which of the following errors affects the agreement of a Trial Balance?
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A. Posting an entry on the correct side but in the wrong account

B. Mistake in balancing an account

C. Recording of a wrong entry in the subsidiary books

D. Omitting to record a transaction entirely in the subsidiary books

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