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Accounting MCQs with Explanations

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271AccountingMedium

In the Bank reconciliation statement “Deposit in transit” is usually:

AAdded to Cash book balance

BSubtracted from cash book balance

CSubtracted from bank balance

DAdded to bank balance

Correct answer

D. Added to bank balance

Explanation

Added to bank balance is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

272AccountingMedium

Transactions that a BUSINESS doesn’t record in any specialised journal are recorded in which of the following journals or day books?

AGeneral journal

BCash payments journal

CPurchases return journal

DCash receipts journal

Correct answer

A. General journal

Explanation

General journal is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

273AccountingMedium

Non Trading institution prepare:______________?

ACost of good sold

BManufacturing account

CIncome and Expenditure Account

Dprofit and loss account

Correct answer

C. Income and Expenditure Account

Explanation

Income and Expenditure Account is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

274AccountingMedium

Provision is created for____________?

AUnknown Liabilities

BKnown Liabilities

CAll the Three

DCreation of Secret Reserves

Correct answer

B. Known Liabilities

Explanation

Known Liabilities is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

275AccountingMedium

Cash received from debtor is recorded in which of the following SPECIALIZED journals?

ACash receipts

BCash payments journal

CPurchase journal

DSales journal

Correct answer

A. Cash receipts

Explanation

Cash receipts is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

276AccountingMedium

Which of the following is an one sided error?

ABoth

B500 purchase of old equipment not recorded in the books of A/c at all

C500 being expense on travelling expense credited to travelling expenses

DNone

Correct answer

C. 500 being expense on travelling expense credited to travelling expenses

Explanation

500 being expense on travelling expense credited to travelling expenses is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

277AccountingMedium

The balance of Revaluation Reserve pertaining to an asset that has been disposed off or retired can be transferred to?

AProfit & Loss A/c

BCapital Reserve A/c

CGeneral Reserve A/c

DAsset A/c

Correct answer

B. Capital Reserve A/c

Explanation

According to AS-10 on disposal of a previously revalued item of fixed asset, the difference between net disposal proceeds and the net book value should be charged or credited to the Profit & Loss Statement except that to the extent that such a loss is related to an increase which was previously recorded as a credit to revaluation reserve and which has not been subsequently reversed or utilized, it may be charged directly to that account. This balance (no longer needeD. being of capital nature should be transferred to Capital Reserve Account.

278AccountingMedium

_________ is the evidence that a transaction took place?

ABonds

BLedger

CJournals

DSource documents

Correct answer

D. Source documents

Explanation

Source documents is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

279AccountingMedium

Financial statements differ from management account because

AThey are mainly prepared for external users of financial information

BThe are prepared on basis of actual concept

CThe are the summary of accounting data

DThey are more complex and hard to prepare

Correct answer

A. They are mainly prepared for external users of financial information

Explanation

They are mainly prepared for external users of financial information is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

280AccountingMedium

_________ Checks that are presented to bank but not yet credited by the bank.

AUnpresented checks

BBounced checks

COutstanding checks

DUncredited checks

Correct answer

D. Uncredited checks

Explanation

Uncredited checks is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

In the Bank reconciliation statement “Deposit in transit” is usually:

AAdded to Cash book balance

BSubtracted from cash book balance

CSubtracted from bank balance

DAdded to bank balance

Correct answer

D. Added to bank balance

Explanation

Added to bank balance is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

Non Trading institution prepare:______________?

ACost of good sold

BManufacturing account

CIncome and Expenditure Account

Dprofit and loss account

Correct answer

C. Income and Expenditure Account

Explanation

Income and Expenditure Account is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

Which of the following is an one sided error?

ABoth

B500 purchase of old equipment not recorded in the books of A/c at all

C500 being expense on travelling expense credited to travelling expenses

DNone

Correct answer

C. 500 being expense on travelling expense credited to travelling expenses

Explanation

500 being expense on travelling expense credited to travelling expenses is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

The balance of Revaluation Reserve pertaining to an asset that has been disposed off or retired can be transferred to?

AProfit & Loss A/c

BCapital Reserve A/c

CGeneral Reserve A/c

DAsset A/c

Correct answer

B. Capital Reserve A/c

Explanation

Financial statements differ from management account because

AThey are mainly prepared for external users of financial information

BThe are prepared on basis of actual concept

CThe are the summary of accounting data

DThey are more complex and hard to prepare

Correct answer

A. They are mainly prepared for external users of financial information

Explanation

They are mainly prepared for external users of financial information is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.