Accounting MCQs

Option A: Gains

Option B: Depreciation

Option C: Expenses

Option D: Capital expenditures

Correct Answer: Expenses ✔

Option A: Increase in capital

Option B: Remain the same

Option C: Decrease in capital

Option D: No effect on capital

Correct Answer: Decrease in capital ✔

Option A: Remain constant

Option B: Decrease by $5000

Option C: Increase by $5000

Option D: Increase by $10,000

Correct Answer: (assuming the amount of capital remain same) ✔

Option A: Drawings

Option B: Income

Option C: Gains

Option D: Fresh capital

Correct Answer: Drawings ✔

Option A: Expenses

Option B: Drawings

Option C: Interest on capital

Option D: Revenue

Correct Answer: Revenue ✔

Option A: $6000

Option B: $10,000

Option C: $5000

Option D: $1000

Correct Answer: $5000 ✔

Option A: $4000

Option B: $6000

Option C: $7000

Option D: $3000

Correct Answer: $6000 ✔

Option A: Asset=Expense +Income

Option B: Assets=Cash+Capital

Option C: Assets=Capital+Liabilities

Option D: Assets=Expenses+Capital

Correct Answer: Assets=Capital+Liabilities ✔

Option A: Balance c/d

Option B: Balance b/d

Option C: Balance e/d

Option D: Balance f/c

Correct Answer: Balance c/d ✔

Option A: Nominal accounts

Option B: Balance sheet accounts

Option C: Real accounts

Option D: None of them

Correct Answer: Nominal accounts ✔

Option A: Office equipment

Option B: Rent expenses

Option C: Rent income

Option D: Insurance expense

Correct Answer: Office equipment ✔

Option A: General journal

Option B: Real accounts

Option C: Ledger accounts

Option D: Cash accounts

Correct Answer: Ledger accounts ✔

Option A: Nominal

Option B: Real

Option C: Cash

Option D: Capital

Correct Answer: Real ✔

Option A: Nominal

Option B: Real

Option C: Cash

Option D: Capital

Correct Answer: Real ✔

Option A: Expenses

Option B: Revenues

Option C: Capital

Option D: Drawing

Correct Answer: Capital ✔

Option A: Nominal accounts

Option B: Real account

Option C: Cash accounts

Option D: Banks account

Correct Answer: Nominal accounts ✔

Option A: Credit balance

Option B: Cash balance

Option C: Overdraft

Option D: Debit balance

Correct Answer: Debit balance ✔

Option A: Debit increases the capital account balance

Option B: Credit increases the capital account balance

Option C: Fresh capital increases the capital account balance

Option D: Net income increases the capital account balance

Correct Answer: Debit increases the capital account balance ✔

Option A: Debit balance

Option B: Credit balance

Option C: Cash balance

Option D: Neither debit nor credit balance

Correct Answer: Credit balance ✔

Option A: Credit balance

Option B: Debit balance

Option C: Cash balance

Option D: Neither debit nor credit balance

Correct Answer: Debit balance ✔

Option A: Credit balance

Option B: Debit balance

Option C: Cash balance

Option D: Neither debit nor credit balance

Correct Answer: Credit balance ✔

Option A: Credit balance

Option B: Debit and credit balance

Option C: Cash balance

Option D: Debit balance

Correct Answer: Debit balance ✔

Option A: Journal

Option B: Cash account

Option C: Ledger account

Option D: Balance sheet

Correct Answer: Ledger account ✔

Option A: Cash

Option B: Charity

Option C: Purchases

Option D: Sales

Correct Answer: Purchases ✔

Option A: Cash at bank

Option B: Bank understatement

Option C: Bank overdraft

Option D: Balance overstatement

Correct Answer: Cash at bank ✔

Option A: Bank overdraft

Option B: Cash at bank

Option C: Bank balance

Option D: Current Asset

Correct Answer: Bank overdraft ✔

Option A: Increase

Option B: Decrease

Option C: Increase or decrease

Option D: Appreciation

Correct Answer: Increase ✔

Option A: Recording

Option B: Transferring

Option C: Posting

Option D: Entry making

Correct Answer: Posting ✔

Option A: Rent expenses account

Option B: Rent income account

Option C: insurance expenses account

Option D: Cash account

Correct Answer: Cash account ✔

Option A: Machinery account

Option B: Building account

Option C: Creditors account

Option D: Rent expenses account

Correct Answer: Rent expenses account ✔

Option A: Recording entries in journal

Option B: Recording entries in Ledger account

Option C: Recording two aspects of every transaction

Option D: Recording every transaction in books

Correct Answer: Recording two aspects of every transaction ✔

Option A: Expenses are greater than Income

Option B: Expenses are less than Income

Option C: Expenses=Income

Option D: Liabilities are greater than income

Correct Answer: Expenses are greater than Income ✔

Option A: Depreciation

Option B: Drawings

Option C: Outflow of cash

Option D: Appreciation

Correct Answer: Drawings ✔

Option A: Cash and cash equivalent

Option B: Creditors

Option C: Notes payable

Option D: Bank loan

Correct Answer: Cash and cash equivalent ✔

Option A: Cash from the business

Option B: liability of a business

Option C: Owner’s claim on total assets

Option D: Owner’s claim on total liabilities

Correct Answer: C. Owner’s claim on total assets ✔

Option A: Cash

Option B: Equipment

Option C: Debtors

Option D: Creditors

Correct Answer: Creditors ✔

Option A: Capital+Liabilities=Assets

Option B: Assets+ liabilities =Capital

Option C: Capital+assets=liabilities

Option D: Liabilities+Capital

Correct Answer: Capital+Liabilities=Assets ✔

Option A: Long life of assets

Option B: Value of assets

Option C: Intangible nature of assets

Option D: Future economic benefits

Correct Answer: Future economic benefits ✔

Option A: Identifying transactions

Option B: Preparing “T Accounts”

Option C: Preparing financial statements

Option D: Preparing trial balances

Correct Answer: Preparing financial statements ✔

Option A: Present event

Option B: Future event

Option C: Past event

Option D: None of them

Correct Answer: Past event ✔

Option A: Possessed

Option B: Owned

Option C: Controlled

Option D: Used

Correct Answer: Controlled ✔

Option A: Expenses

Option B: Obligations

Option C: Creditors

Option D: Income or gain

Correct Answer: Expenses ✔

Option A: Assets

Option B: Liabilities

Option C: Income

Option D: Expenses

Correct Answer: Income ✔

Option A: Resources

Option B: Obligations

Option C: Future benefits

Option D: Expenses

Correct Answer: Obligations ✔

Option A: Future economic benefits for the business

Option B: All kind of benefits for the business

Option C: Expenses for the business

Option D: Merits and Demerits for the business

Correct Answer: Future economic benefits for the business ✔

Option A: Partnership

Option B: Sole proprietorship

Option C: Company

Option D: Non-profit organization

Correct Answer: Company ✔

Option A: They are mainly prepared for external users of financial information

Option B: They are more complex and hard to prepare

Option C: The are the summary of accounting data

Option D: The are prepared on basis of actual concept

Correct Answer: They are mainly prepared for external users of financial information ✔

Option A: Identifying an economic event or transaction

Option B: Preparing journals

Option C: Posting entries to ledger accounts

Option D: Making decisions about business

Correct Answer: Identifying an economic event or transaction ✔

Option A: Creditor of the business

Option B: Government agency

Option C: Shareholder of the business

Option D: Manager of the business

Correct Answer: Manager of the business ✔

Option A: Manager of the business

Option B: CEO of the business

Option C: Creditor of the business

Option D: Controller of the business

Correct Answer: Creditor of the business ✔

Option A: Reporting the financial information

Option B: Examination of financial statements

Option C: Preparation financial statements

Option D: maintaining the ledger records

Correct Answer: Examination of financial statements ✔

Option A: Recording

Option B: summarizing

Option C: Grouping

Option D: Processing

Correct Answer: Recording ✔

Option A: Identification of economic event

Option B: Communication of financial information

Option C: Recording financial information

Option D: Making decisions about business

Correct Answer: Communication of financial information ✔

Option A: Government agencies

Option B: investors

Option C: Creditors

Option D: Managers

Correct Answer: Managers ✔

Option A: Analyzing

Option B: Preparing financial statements

Option C: Recording financial information

Option D: Auditing the books of accounts

Correct Answer: Recording financial information ✔

Option A: Communicating→Recording→Identifying

Option B: Recording→Communicating→Identifying

Option C: Identifying→communicating→recording

Option D: Identifying→recording→communicating

Correct Answer: Identifying→recording→communicating ✔

Option A: Cash

Option B: Bank statement

Option C: Transaction

Option D: Exchange of money

Correct Answer: Transaction ✔

Option A: General journal

Option B: Cash journal

Option C: Purchase journal

Option D: Sales return day book

Correct Answer: Sales return day book ✔

Option A: Cash receipts journal

Option B: Cash payments journal

Option C: Sales journal

Option D: Purchase journal

Correct Answer: Cash payments journal ✔

Option A: Cash receipts journal

Option B: General journal

Option C: Source document

Option D: Cash book

Correct Answer: Source document ✔

Option A: Small businesses

Option B: Big businesses

Option C: Sole proprietorship

Option D: Partnership

Correct Answer: Big businesses ✔

Option A: Purchase journal

Option B: Sales return journal

Option C: General journal

Option D: Cash receipt journal

Correct Answer: Sales return journal ✔

Option A: Purchase journal

Option B: Sales journal

Option C: General journal

Option D: Cash receipt journal

Correct Answer: General journal ✔

Option A: General journal

Option B: Cash journal

Option C: Purchase journal

Option D: Purchase return journal

Correct Answer: Purchase return journal ✔

Option A: General journal

Option B: Cash journal

Option C: Purchase journal

Option D: Purchase return journal

Correct Answer: General journal ✔

Option A: Narration

Option B: Explanation

Option C: Summary

Option D: Other information

Correct Answer: Narration ✔

Option A: Purchase journal

Option B: Sales journal

Option C: Purchases return journal

Option D: Cash payments journal

Correct Answer: Cash payments journal ✔

Option A: Bank statement

Option B: Statement of cash flow

Option C: Cash book

Option D: Cash documents

Correct Answer: Cash book ✔

Option A: Purchase journal

Option B: Sales journal

Option C: Cash receipts

Option D: Cash payments journal

Correct Answer: Cash receipts ✔

Option A: Credit sales

Option B: Credit purchases

Option C: Credit sales and purchases

Option D: Cash sales and purchases

Correct Answer: Cash sales and purchases ✔

Option A: Purchase journal

Option B: Sales journal

Option C: Purchases return journal

Option D: Sales return journal

Correct Answer: Purchases return journal ✔

Option A: Specialized journal

Option B: Day book

Option C: Cash book

Option D: Record book

Correct Answer: Day book ✔

Option A: Cash payments journal

Option B: Cash receipts journal

Option C: Purchases return journal

Option D: General journal

Correct Answer: General journal ✔

Option A: Purchase journal

Option B: Sales journal

Option C: Purchases return journal

Option D: Sales return journal

Correct Answer: Sales journal ✔

Option A: Purchase journal

Option B: Sales journal

Option C: Purchases return journal

Option D: Sales return journal

Correct Answer: Sales return journal ✔

Option A: Cash account

Option B: Bank account

Option C: Equipment account

Option D: Accrued expenses account

Correct Answer: Accrued expenses account ✔

Option A: Rent income account

Option B: Creditors account

Option C: Unearned income account

Option D: Cash account

Correct Answer: Cash account ✔

Option A: Arithmetic accuracy

Option B: Errors of commission

Option C: Omissions of economic events

Option D: Understatements of balances

Correct Answer: Arithmetic accuracy ✔

Option A: Complete omission of a transaction

Option B: Partial omission of a transaction

Option C: Error of principle

Option D: Compensating errors

Correct Answer: Partial omission of a transaction ✔

Option A: Frequently during the year

Option B: At the end of an accounting period

Option C: At the end of a month

Option D: At the end of a year

Correct Answer: At the end of an accounting period ✔

Option A: No error in recording transactions

Option B: No error in posting entries to ledger accounts

Option C: Account balances are correct

Option D: Mathematically Capital+Liabilities=Assets

Correct Answer: Mathematically Capital+Liabilities=Assets ✔

Option A: It lists down the balances of accounts

Option B: It lists down the balances of a balance sheet

Option C: It is a kind of financial statement

Option D: It is not a part of accounting cycle

Correct Answer: It lists down the balances of accounts ✔

Option A: Ledger accounts

Option B: General Journal

Option C: Specialized journals

Option D: Balance sheet

Correct Answer: Ledger accounts ✔

Option A: Yes

Option B: No

Option C: Transactions can’t be omitted

Option D: none of these

Correct Answer: No ✔

Option A: Ledger accounts balances

Option B: Balance sheet balances

Option C: Income statement balances

Option D: Cash flow statement balances

Correct Answer: Ledger accounts balances ✔

Option A: 1949

Option B: 1956

Option C: 1961

Option D: 1972

Correct Answer: 1961 ✔

Option A: Error of principle

Option B: Error of commission

Option C: Error of omission

Option D: Error of duplication

Correct Answer: Error of principle ✔

Option A: Error of omission

Option B: Error of commission

Option C: Compensating error

Option D: Error of principle

Correct Answer: Error of commission ✔

Option A: Two

Option B: Three

Option C: Five

Option D: Six

Correct Answer: Two ✔

Option A: Equity

Option B: Sale return

Option C: Inventory

Option D: Purchases

Correct Answer: Inventory ✔

Option A: External liabilities

Option B: Fixed liabilities

Option C: Current liabilities

Option D: Liquid Liabilities

Correct Answer: Current liabilities ✔

Option A: Fictitious assets

Option B: Quick asset

Option C: Real asset

Option D: Outstanding asset

Correct Answer: Outstanding asset ✔

Option A: Contingent assets

Option B: Fixed assets

Option C: Fictitious assets

Option D: Quick assets

Correct Answer: Contingent assets ✔

Option A: Fixed asset

Option B: Quick asset

Option C: Fictitious assets

Option D: Real assets

Correct Answer: Real assets ✔

Option A: Current asset

Option B: intangible asset

Option C: Tangible asset

Option D: Liquid asset

Correct Answer: Tangible asset ✔

Option A: Profit

Option B: Income

Option C: Expense

Option D: Drawing

Correct Answer: Drawing ✔

Option A: Current asset

Option B: Fictitious asset

Option C: Tangible asset

Option D: Fixed assets

Correct Answer: Fixed assets ✔