Accountancy is referred to as the process of recording financial transactions that take place in a business. The Accounting process involves summarising, reporting and analysing the information to be used by various users of Accounting information.
Following are some of the Accounting multiple choice questions and answers that will help the students in brushing up their understanding of the concept of Accounting.
Accounting MCQs with Answers:
Question 1
Accounting furnishes data on
A) Income and cost for the managers
B) Financial conditions of the institutions
C) Company’s tax liability for a particular year
D) All the above
Answer: D
Question 2
Long term assets having no physical existence but, possessing a value are called
A) Intangible assets
B) Fixed assets
C) Current assets
D) Investments
Answer: A
Question 3
The assets that can be easily converted into cash within a short period, i.e., 1 year or less are known as
A) Current assets
B) Fixed assets
C) Intangible assets
D) Investments
Answer: A
Question 4
Copyrights, Patents and Trademarks are,
A) Current assets
B) Fixed assets
C) Intangible assets
D) Investments
Answer: C
Question 5
The debts which are to be repaid within a short period (a year or less) are referred to as,
A) Current Liabilities
B) Fixed liabilities
C) Contingent liabilities
D) All the above
Answer: A
Question 6
Gross profit is
A) Cost of goods sold + Opening stock
B) Excess of sales over cost of goods sold
C) Sales fewer Purchases
D) Net profit fewer expenses of the period
Answer: B
Question 7
Net profit is computed in the
A) Profit and loss account
B) Balance sheet
C) Trial balance
D) Trading account
Answer: A
Question 8
In order to find out the value of the closing stock during the end of the financial year we,
A) do this by stocktaking
B) deduct the cost of goods sold from sales
C) deduct opening stock from the cost of goods sold
D) look in the stock account
Answer: A
Question 9
Which of these best explains fixed assets?
A) Are bought to be used in the business
B) Are expensive items bought for the business
C) Are items which will not wear out quickly
D) Are of long life and are not purchased specifically for resale
Answer: D
Question 10
The charges of placing commodities into a saleable condition should be charged to
A) Trading account
B) P & L a/c
C) Balance Sheet
D) None of the above
Answer: B
Question 11
Suppliers personal a/c are seen in the
A) Sales Ledger
B) Nominal ledger
C) Purchases Ledger
D) General Ledger
Answer: C
Question 12
If you want to ensure that your money will be secured if cheques sent are wasted in the post, you should
A) Always pay by cash
B) Cross your Cheques ‘Account Payee only, Not Negotiable.’
C) Always get the money in person
D) Not use the postal service in future
Answer: B
Question 13
Discounts received are
A) Deducted by us when we pay our accounts
B) Deducted when we receive cash
C) Given by us when we sell goods on credit
D) None of these
Answer: A
Question 14
Sales invoices are first entered in
A) The Cash Book
B) The Purchases Journal
C) The Sales Journal
D) The Sales Account
Answer: C
Question 15
Entered in the Purchases Journal are
A) Discounts received
B) Purchases invoices
C) Payments to suppliers
D) Trade discounts
Answer: B
Question 16
At the balance sheet date, the balance on the Accumulated Provision for Depreciation Account is
A) Transferred to Depreciation Account
B) Transferred to the Asset Account
C) Transferred to Profit and Loss Account
D) Simply deducted from the asset in the Balance Sheet
Answer: D
Question 17
If we take goods for own use we should
A) Debit Drawings Account, Credit Purchases Account
B) Debit Drawings Account: Credit Stock Account
C) Debit Sales Account: Credit Stock Account
D) Debit Purchases Account: Credit Drawings Account
Answer: A
Question 18
When a petty cash book is kept there will be
A) No entries made at all in the general ledger for items paid by petty cash
B) The same number of entries in the general ledger
C) Fewer entries made in the general ledger
D) More entries made in the general ledger
Answer: C
Question 19
If a trial balance totals do not agree, the difference must be entered in
A) The Profit and Loss Account
B) A Nominal Account
C) The Capital Account
D) A Suspense Account
Answer: D
Question 20
If it is required to maintain fixed capitals then the partners’ shares of profits must be
A) Credited to capital accounts
B) Debited to capital accounts
C) Debited to partners’ current accounts
D) Credited to partners’ current accounts
Answer: D
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