accounting Mcqs
301. Which of the following relationships is/are false?
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A. Net Profit = Gross Profit Administration and Other expenses

B. Net Profit = Gross Profit + Administration expenses and Other expenses

C. Opening Stock + Purchases Closing Stock = Cost of Sales

D. Both B. and C. above
302. Which of the following is a current liability?
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A. Discount on issue of shares

B. Trademark

C. Outstanding Salaries

D. Prepaid expenses

303. Cash discount is allowed on _______ repayment of debt.
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A. None of them

B. Lump sum

C. Actual

D. Prompt
304. Depreciation fund method is also known as__________?
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A. Annuity Method

B. None of these

C. Sum of Year Digits Method

D. Sinking Fund Method
305. A club paid subscription fees of `1,400. Out of which ` 200 is prepaid. In such case
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A. P&L A/C is debited with 1,400

B. P&L A/C is debited with 1,200

C. 200 is shown as current asset

D. Both B. and C. above
306. A discount of $2000 was given to a supplier on his prompt repayment of debt but the cashier entered the gross amount in cash book. What should be the adjustment in cash to work out the correct balance of cash book?
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A. $4000 will be credited in the cash book

B. $4000 will be debited in cash book

C. $2000 will be credited in cash book

D. $2000 will be debited in cash book

307. Cost of goods sold excludes___________?
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A. Carriage inward

B. Wages & Salary

C. Postage & Stamps

D. Opening Stock

308. Which of the following are current assets of a business?
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A. Stock

B. . Debtors

C. ="color: #003f1a;">i. Income received in advance

D. Pre-paid expenses

E. Accrued income</strong></span>

309. Bank reconciliation statement is the comparison of a bank statement (sent by bank) with the _________ (prepared by business).
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A. Financial statements

B. Cash receipt journal

C. Cash book

D. Cash payment journal

310. The total cost incurred in the operation of a business undertaking other than the cost of manufacturing and production is known as________?
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A. Commercial cost

B. Direct cost

C. Conversion cost

D. Variable cost

311. Which of the following is not classified as inventory in the financial statements?
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A. Stores and spares

B. Work-in-process

C. Advance payments made to suppliers for raw materials

D. Finished goods

312. The Balance Sheet gives information regarding the____________?
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A. Profit earning capacity for a particular period

B. Results of operations for a particular period

C. Financial position as on a particular date

D. Financial position during a particular period

313. From the following details what will be the partners commission? Net profit before charging partners commission 65,000. Partners commission @ 11% after charging such commission.
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A. 5431

B. 9876

C. 6441

D. 7654

314. X draws a Bill of Exchange on Y for 10,000 on 1-1-2013 for 3 months. The due date of the bill will be_________?
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A. 4-4-2013

B. 3/4/2013

C. 31-3-2013

D. 1/4/2013

315. The adjustment to be made for prepaid expenses is____________?
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A. Add prepaid expenses to respective expenses and show it as an asset

B. Deduct prepaid expenses from respective expenses and show it as a liability

C. Deduct prepaid expenses from respective expenses and show it as an asset

D. Add prepaid expenses to respective expenses and show it as a liability

316. Bank sent debit advice of $500 to company being interest on overdraft. It wasnt entered in cash book. Identify the correct adjustment in cash book.
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A. $1000 will be subtracted

B. Non-adjustable

C. $500 will be credited

D. $500 will be debited

317. Balance as per cash book(adjusted.=$1000, Unpresented checks=$2000, Uncredited checks=$500, Deposit in transit=$500. Compute the balance as per bank statement.
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A. $2000

B. $3,000

C. $2,500

D. Zero

318. Find the value of opening stock from the following data. Purchases 1,50,000, Closing stock 30,000 Sales 2,20,000, Gross profit 40,000.
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A. 60,000

B. 55,000

C. 50,000

D. 65,000

319. Direct cost incurred can be identified with_______________?
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A. Each unit of output

B. Each Executive

C. Each Month

D. Each Department

320. Which of the following bases is not appropriate for apportionment of Transport departments cost ?
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A. Truck Mileage

B. Truck value

C. Crane hours

D. Crane value
321. Depreciation appearing in the Trial Balance should be?
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A. Debited to P&L A/c

B. Shown as liability in Balance Sheet

C. Reduced from related asset in Balance Sheet

D. Both A. and C. above

322. Uncollected checks also referred as______________?
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A. Outstanding checks

B. Unpresented checks

C. Uncredited checks

D. Bounced checks

323. Under the direct write-off method of recognizing a bad debt expense. Which of the following statements is/are true?
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A. Revenue is overstated in the year of sales

B. It violates the matching principle of accounting

C. All of the above

D. The bad debt expense is not matched with the related sales

324. Period cost include which of the following ?
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A. selling Expenses & administrative expenses

B. Direct labor

C. factory overhead

D. selling Expense

325. The noting charges levied on dishonour of an endorsed bill by the Notary Public are to be borne by
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A. The holder of the bill

B. The endorser of the bill

C. The drawer of the bill

D. The person responsible for dishonour
326. A check returned by bank marked NSF means that:
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A. Check cant be cashed being illegal

B. Check has been forged

C. There are not sufficient funds in your account

D. Bank cant verify your identity

327. If a company has contingent liabilities, they appear in the__________?
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A. Directors report

B. Chairmans report

C. Balance Sheet

D. Notes on account to Balance Sheet
328. At the time of preparation of financial accounts, bad debt recovered account will be transferred to?
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A. Debtors A/c

B. Profit & Loss Appropriation A/c

C. Profit & Loss Adjustment A/c

D. Profit & Loss A/c
329. Which of the following is not a contingent liability?
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A. Arrears of fixed cumulative dividend

B. Debts included in Sundry Debtors which are doubtful in nature

C. Claims against the company not acknowledged as debts

D. Uncalled liability on partly paid shares

330. Insurance prepaid is shown as:___________?
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A. Current Asset

B. Fixed Asset

C. Current Liability

D. Income

331. Which of the following statement is considered as the accountants snapshot of firms accounting value as of a particular date?
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A. Cash Flow Statement

B. Retained Earning Statement

C. Income Statement

D. Balance Sheet
332. LIFO stands for__________?
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A. Last input, First Output

B. Lots in , Few out

C. Link input, Format Output

D. Last in, First Out
333. A cash book that is used to record the small payments of cash is generally referred as_________?
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A. Simple cash book

B. Petty cash book

C. Three column cash book

D. Two column cash book

334. Which English alphabet is similar to the shape of an account?
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A. I

B. H

C. T

D. None

335. Based on which of the following concepts, is Share Capital Account shown on the liabilities side of a Balance Sheet?
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A. Money measurement concept

B. Going concern concept

C. Business entity concept

D. Matching concept

336. If unexpired insurance appears in the Trial Balance, it should be:
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A. Debited to the Profit & Loss Account

B. Credited to the Profit & Loss Account

C. Shown on the assets side of the Balance Sheet

D. Shown on the liabilities side of the Balance Sheet

337. Under which of the following situations, is journal entry not passed in the books of the drawer?
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A. When a debtor accepts a bill drawn by the drawer

B. When a bill is sent to the bank for collection

C. When a bill is renewed at the request of the drawee

D. When a discounted bill is honoured by the drawee on the due date
338. An income statement in which each item expressed as percentage of Sale?
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A. common size income statement

B. Balance sheet

C. income statement

D. All of the Above

339. _________ Checks that are presented to bank but not yet credited by the bank.
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A. Uncredited checks

B. Unpresented checks

C. Outstanding checks

D. Bounced checks

340. Which of the following is not true with regard to preparation of Profit & Loss Account?
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A. Profit & Loss Account is prepared for a certain period and hence it is an interim statement

B. Net Profits are ascertained on the basis of current costs

C. Profit & Loss Account does not disclose the effect of non-financial items

D. Net Profits as disclosed by P&L Account is not absolute

341. Cash book is prepared by____________?
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A. Manager of a company

B. Accountant of business

C. Banks cashier

D. Bank

342. Introduction capital by owner of business is recorded on which side of a cash book?
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A. Expenditures

B. Receipts

C. Incomes

D. Payments

343. Postage stamps on hand are considered as_________?
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A. Bank

B. Prepaid expenses

C. Accounts receivable

D. Creditor

344. Bad debts recovered is:
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A. Credited to P&L A/c

B. Reduced from debtors in Balance Sheet

C. Debited to P&L A/c

D. Added to debtors in Balance Sheet

345. Profit on sale of old plant is:___________?
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A. Profit and Loss A/c

B. In Trading A/c

C. In Profit and Loss Appropriation A/c

D. Being a non operating item ignored

346. The cost of obsolete inventory acquired several years ago, to be considered in a keep vs. disposal decision is an example of :
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A. Opportunity cost

B. Uncontrollable cost

C. Avoidable cost

D. Sunk cost
347. Carriage on goods purchased is shown in:___________?
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A. Trading A/c

B. Shown in Balance Sheet

C. Profit and Loss A/c

D. Capitalized with work in progress

348. Which of these are not required in a promissory note?
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A. Properly stamped

B. Payment to be made legal currency

C. Acceptance

D. Unconditional promise to pay

349. Overhead cost is the total of ____________.
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A. all direct costs.

B. all indirect costs.

C. indirect and direct costs.

D. all specific costs

350. Which of the following is not a feature of a promissory note?
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A. It is payable to the bearer

B. It contains an unconditional promise to pay

C. It must be in writing

D. It must be signed by the maker