accounting MCQs – Page 9

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 Review each marked answer and report any item that may be outdated or unclear.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

161. The normal balance of asset account is____________?
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A. Credit balance

B. Debit balance

C. Neither debit nor credit balance

D. Cash balance

162. Which of the following enhances the earning capacity of an asset?
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A. Increase in working capacity of an asset

B. Reduction in operating costs

C. Replacing damaged parts of an asset

D. Both A. and C. above

163. If a transaction is completely omitted from the books of accounts, will it affect the agreement of a trial balance?
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A. none of these

B. Yes

C. No

D. Transactions cant be omitted

164. Which of the following accounts will be credited if a company purchases building for cash?
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A. Building account

B. Fixed assets account

C. Cash account

D. Capital account

165. Which of these items are taken into consideration for preparation of adjusted Cash Book
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A. Mistake in Cash Book

B. Mistake in Pass Book

C. Cheques deposited but not cleared

D. Cheque issued but not presented for payment

166. Building and furniture are called ____________?
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A. Current asset

B. Fixed assets

C. Tangible asset

D. Fictitious asset

167. If credit side of a bank account is greater than the debit side, it indicates which of the following?
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A. Cash at bank

B. Bank balance

C. Bank overdraft

D. Current Asset

168. Trial balance is commonly prepared?
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A. At the end of a month

B. At the end of an accounting period

C. At the end of a year

D. Frequently during the year

169. Goods sent on approval basis have been recorded as Credit sales. This is an example of____________?
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A. Error of commission

B. Error of omission

C. Error of principle

D. Error of duplication

170. Fresh capital introduction will increase____________?
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A. Liabilities and equity and bank balance

B. Assets and equity

C. Capital and liabilities

D. Assets and liabilities

171. Debit balance as per bank pass book mean_____________?
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A. Terms deposits with bank

B. None of these

C. Surplus cash

D. Bank Overdraft

172. Which of these errors affect two or more accounts
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A. All the three

B. Errors of complete omission

C. Errors of principle

D. Errors of posting to wrong account

173. The Bank Reconciliation Statement is prepared?
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A. To rectify the mistakes in the Cash Book

B. To bring out the reasons for the difference between the Balance as per Cash Book and the Balance as per Bank Statement

C. To arrive at the Bank Balance

D. To arrive at the Cash Balance

174. The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as 1,340.56. The bank recorded the cheque at its correct amount of 3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is
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A. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book

B. The Trial Balance will not agree

C. The balance of creditors is understated

D. The purchases are understated

175. In a three column cash book_______________does not exist?
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A. Discount column

B. Petty cash column

C. Cash column

D. Bank column

176. Which of the following is known as the base for preparing trial balance?
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A. Balance sheet

B. Cash account

C. Journal

D. Ledger account

177. Income earned but not received is called ____________?
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A. Real asset

B. Quick asset

C. Outstanding asset

D. Fictitious assets

178. Cash received from debtors would be deemed as___________of funds.
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A. No flow

B. Gain

C. Uses

D. Sources

179. Institute of Chartered Accountants of Pakistan was established in____________?
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A. 1972

B. 1956

C. 1949

D. 1961

180. The real accounts are accounts of Assets, liabilities and ___________?
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A. Drawing

B. Capital

C. Expenses

D. Revenues

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