accounting MCQs – Page 5

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 Review each marked answer and report any item that may be outdated or unclear.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

81. The first step in accounting process is___________?
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A. Posting the transaction

B. Identifying the transaction

C. Preparing the source documents

D. Recording the transaction

82. Calculate the amount of cash if: Total assets=$10,000 Total liabilities=$10,000 Total Capital=$5000
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A. $10,000

B. $6,000

C. $5000

D. $1,000

83. The periodic total of sales day book is posted to___________?
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A. Credit sales A/c

B. Sales return A/c

C. Cash sales A/c

D. Sales A/c

84. Which of the following assets is/are to be valued at the lower of cost and net realizable value?
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A. Goodwill

B. Inventories

C. Investments

D. Both B. and C. above.

85. Discount allowed is a kind of deduction from_____________?
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A. Cash account

B. Account payable

C. Account receivable

D. Discount account

86. Debit note is the basis for recording a transaction in which of the following journals?
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A. Purchase journal

B. Cash journal

C. General journal

D. Purchase return journal

87. The amount invested by the proprietor to start the business is called:
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A. Business

B. Drawings

C. Capital

D. All of them

88. ________ is a separate legal entity that Total capital can be divided in many shares.
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A. Company

B. Non-profit organization

C. Partnership

D. Sole proprietorship

89. Cash purchases is recorded in which of the following specialized journals?
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A. Purchases return journal

B. Purchase journal

C. Sales journal

D. Cash payments journal

90. The process of recording is done?
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A. At the end of a accounting period

B. Two times a year

C. Frequently during the accounting period

D. once a year

91. Transferring entries from journal to ledger account is commonly known as____________?
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A. Recording

B. Posting

C. Entry making

D. Transferring

92. Keeping the log of financial information in books of original entries is called__________?
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A. Grouping

B. summarizing

C. Processing

D. Recording

93. Which of the following account with normal balance is shown at the debit side of a trial balance?
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A. Rent income account

B. Unearned income account

C. Creditors account

D. Cash account

94. Trial balance is prepared to check accuracy of_______________?
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A. Ledger accounts balances

B. Income statement balances

C. Cash flow statement balances

D. Balance sheet balances

95. Cash discount is provided on _______________?
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A. Sales

B. Prompt payment

C. Sales return

D. Purchases

96. Credit note is the basis for recording a transaction in which of the following SPECIALIZED journals?
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A. Cash receipt journal

B. Purchase journal

C. Sales return journal

D. General journal

97. Identify the correct sequence of accounting process
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A. Communicating?Recording?Identifying

B. Identifying?recording?communicating

C. Identifying?communicating?recording

D. Recording?Communicating?Identifying

98. A second hand car is purchased for 2,00,000 and sold at 1,40,000 after two years. If depreciation is charged @ 10% on written down value method, find the profit or loss on sale of the Second hand car?
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A. Loss of 22,000

B. Profit of 11,000

C. Loss of 20,000

D. Loss of 11,000

99. Which of the following is the external user of financial statements?
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A. CEO of the business

B. Controller of the business

C. Creditor of the business

D. Manager of the business

100. The systems of accounting are _____________?
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A. Three

B. Five

C. Six

D. Two

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