accounting MCQs – Page 6

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 Review each marked answer and report any item that may be outdated or unclear.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
101. While finalizing the current years accounts, the company realized that an error was made in the calculation of closing stock of the previous year. In the previous year, closing stock was valued more by 50,000. As a result
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A. Previous years profit is overstated and current years profit is also overstated.

B. Previous years profit is overstated and current years profit is understated.

C. There will be no impact on the profit of either the previous year or the current year.

D. Previous years profit is understated and current years profit is overstated.

102. Which of the following is not a cause of difference in balance as per cash book and balance as per bank pass book___________?
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A. Cheques deposited and cleared

B. Errors in pass book

C. Cheques issued but not presented for payment

D. Errors in cash book

103. The portion of the acquisition cost of the asset yet to be allocated is known as___________?
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A. Accumulated value

B. Written down value

C. Residual Value

D. Salvage value

104. ___________ helps business to classify transactions according to their nature?
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A. Ledger accounts

B. Real accounts

C. Cash accounts

D. General journal

105. Which of the following is the normal balance of a rent expense account?
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A. Credit balance

B. Overdraft

C. Cash balance

D. Debit balance
106. When goods, in which business deals are sold, it is called___________?
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A. Return outwards

B. Sales

C. Return inward

D. Purchases

107. Liabilities are which of the following?
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A. Obligations

B. Future benefits

C. Expenses

D. Resources

108. Goods returned by customer should be debited to which of the following accounts?
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A. Sales account

B. Return inward account

C. Sales income account

D. Expenses account

109. reduction in price is called:
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A. Discount

B. Book price

C. Invoice price

D. Paid price

110. Another name of journal is_____________?
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A. Cash book

B. Record book

C. Specialized journal

D. Day book
111. Which of the following will be debited if a business purchases goods on credit?
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A. Creditor

B. Purchases

C. Debtor

D. Cash

112. Cash received from debtor is recorded in which of the following SPECIALIZED journals?
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A. Cash payments journal

B. Cash receipts

C. Purchase journal

D. Sales journal

113. A chart of accounts generally start with which of the following types of accounts?
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A. liability accounts

B. Cash accounts

C. Assets accounts

D. Revenue accounts

114. The standard format of journal does not include which of the following?
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A. Amount column

B. Date column

C. Description column

D. Assets column
115. Which of the following specialised journals will record goods returned by the BUSINESS ?
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A. Purchase journal

B. Sales return journal

C. Sales journal

D. Purchases return journal
116. In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life?
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A. Straight-line method

B. Written down value method

C. Sum-of-the years-digits method

D. Units-of-production method

117. The normal balance of capital account is_____________?
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A. Cash balance

B. Neither debit nor credit balance

C. Credit balance

D. Debit balance

118. The adjustment to be made for income received in advance is:
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A. Add income received in advance to respective income and show it as asset

B. Deduct income received in advance from respective income and show it as an asset in the Balance Sheet

C. Add income received in advance to respective income and show it as a liability

D. Deduct income received in advance from respective income and show it as a liability
119. Depreciation decreases____________?
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A. Capital

B. Cash

C. Bank

D. Liabilities

120. Goods return to supplier are known as:__________?
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A. Sales return

B. Return inwards

C. Purchase return

D. Merchandise return