accounting MCQs – Page 12

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 Review each marked answer and report any item that may be outdated or unclear.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
221. Buildings account is debited with an amount towards repairs. This is an example of?
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A. Compensating error

B. Error of omission

C. Error of commission

D. Error of principle
222. Which of the following account with normal balance is shown at the credit side of a trial balance?
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A. Accrued expenses account

B. Equipment account

C. Bank account

D. Cash account

223. Which of the following is an item of capital expenditure?
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A. Research and development costs during the year

B. Installation charges paid in conjunction with the purchase of Office Equipment

C. Interest on borrowed fund utilized for acquisition of Office Furniture

D. Monthly rent of a machinery used in the business

224. _________ is the evidence that a transaction took place?
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A. Bonds

B. Source documents

C. Ledger

D. Journals

225. Which of the following statements is true with regard to written down value method of depreciation?
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A. . The rate of depreciation as well as the amount of depreciation reduce year after year

B. The rate at which the asset is written off reduces year after year

C. The amount of depreciation provided reduces from year to year

D. The value of the asset gets reduced to zero over a period of time</strong>

226. Debts which are payable in the course of a month are called _____________?
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A. Liquid Liabilities

B. Fixed liabilities

C. Current liabilities

D. External liabilities

227. A journal entry in which two or more account is debited or credited is referred as____________?
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A. Compound entry

B. Journal entry

C. Multi entry

D. Additional entry

228. The assets which have some market value are called ____________?
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A. Real assets

B. Quick asset

C. Fixed asset

D. Fictitious assets

229. For which step of accounting process the accountants of business entity prepare financial statements?
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A. Making decisions about business

B. Communication of financial information

C. Identification of economic event

D. Recording financial information

230. Which of the following is not a deferred revenue expenditure?
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A. Expenses in connection with issue of equity shares

B. Preoperative expenses

C. Heavy advertising expenses to introduce a new product

D. Legal expenses incurred in defending a suit for breach of contract to supply goods

231. Which of the following is true regarding closing entries?
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A. They must be made after the reversing entries but before the adjusting entries

B. They transfer the balances in all of the Nominal Accounts to the Trading and Profit and Loss Account

C. They must be made after the adjusting entries but before the reversing entries

D. They must be followed by reversing entries

232. Which of the following is a Nominal A/c ?
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A. Outstanding Salary A/c

B. Debtors A/c

C. SBI A/c

D. Rent A/c
233. Cash book records?
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A. Only capital receipts

B. Only revenue receipts

C. Only cash sales

D. All types of cash receipts and payments
234. Provision is created for____________?
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A. All the Three

B. Creation of Secret Reserves

C. Known Liabilities

D. Unknown Liabilities

235. The other name of journal is____________?
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A. T account

B. Day book

C. Ledger

D. Cash book

236. Which of the following is known as an evidence that a transaction took place?
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A. Cash receipts journal

B. Source document

C. Cash book

D. General journal

237. Which of the following is a capital expenditure?
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A. Cost of stand by equipment

B. Repair of plant and machinery

C. Annual whitewash of the office building

D. Salary paid to workers

238. In support of business transaction, any written evidence is called ___________?
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A. Discount

B. Price

C. Allowance

D. Voucher
239. What is equity?
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A. Cash from the business

B. Owners claim on total assets

C. liability of a business

D. Owners claim on total liabilities

240. Any gain on the sale of non-current assets should be _________ from the net profit and the loss must be _________to the net profit in determining fund from operation?
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A. Added, Added

B. Deducted, Deducted

C. Added, Reduced

D. Deducted, Added