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

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
241. Which of the following is a real account?
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A. Office equipment

B. Insurance expense

C. Rent expenses

D. Rent income

242. Which of the following statements is/are true ?
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A. Cash Book is a subsidiary book as well as a ledger

B. The balance of Petty Cash Book is a liability

C. A sale of an asset is recorded in the Sales Book

D. Total of Return Outward Book is debited to Return Outward Account

243. Which of the following accounts appear(s) in the Balance Sheet of a business?
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A. an style="color: #003f1a;">i. Stock at the end of the financial year
B. pan style="color: #003f1a;">iii. Drawings
C. pan style="color: #003f1a;">ii. Stock at the beginning of the financial year
D. pan style="color: #003f1a;">iv. Prepaid Rent
E. pan style="color: #003f1a;">v. Interest received but not yet earned
244. IFRS 9 explains about?
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A. Inventory

B. Expenses

C. Accounts Payable

D. Accounts Receivable
245. A cash deposit made by business appears on the bank statement as _______ balance?
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A. Expenses

B. Credit

C. Debit

D. Liability

246. Which of the following error results in unadjusted cash book balance?
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A. Deposit in transit

B. Outstanding checks

C. Unpresented checks

D. Omission of Bank charges

247. If actual bad debts are more than the provision for bad debts, then there will be a_____________?
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A. Debit balance of Discount on Debtors Account

B. Credit balance of Provision for Bad Debts Account

C. Debit balance of Bad Debts Account

D. Debit balance of Provision for Bad Debts Account
248. Consider the following data pertaining to the production of a company for a particular month :
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A. e="color: #003f1a;">Total manufacturing cost charged to product 3,39,165
B. 65,025
C. e="color: #003f1a;">The amount of factory overheads applied to production is
D. e="color: #003f1a;">Closing stock of raw material 10,380

E. 95,020

F. ="color: #003f1a;">Opening stock of raw material 11,570
249. In the Bank reconciliation statement Deposit in transit is usually:
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A. Subtracted from bank balance

B. Subtracted from cash book balance

C. Added to bank balance

D. Added to Cash book balance

250. Payment of rent expenses is recorded on which side of cash book?
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A. Income

B. Expense

C. Payments

D. Receipts