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Accounting MCQs with Explanations

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361AccountingMedium

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_________?

A4-4-2013

B3-4-2013

C31-3-2013

D1-4-2013

Correct answer

A. 4-4-2013

Explanation

4-4-2013 is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

362AccountingMedium

Which of the following error is an error of principle

A5,000 incurred on installation of new plant debited to travelling expenses A/c

B500 paid for wages debited to salary A/c

C500 being purchase of raw material debited to purchase A/c ` 50

D5,000 received from Sham credited to Ram A/c

Correct answer

A. 5,000 incurred on installation of new plant debited to travelling expenses A/c

Explanation

5,000 incurred on installation of new plant debited to travelling expenses A/c is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

363AccountingMedium

Any donation received for a specific purpose is a_________?

ARevenue receipts

BLiability

CCapital receipts

DAssets

Correct answer

C. Capital receipts

Explanation

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

364AccountingMedium

Credit note is the basis for recording a transaction in which of the following SPECIALIZED journals?

ASales return journal

BGeneral journal

CCash receipt journal

DPurchase journal

Correct answer

A. Sales return journal

Explanation

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

365AccountingMedium

The closing balance of petty cash book is considered as_________?

ALiability

BIncome

CAsset

DExpenses

Correct answer

C. Asset

Explanation

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

366AccountingMedium

Which of the following is generally not the party to a check?

APayee

BSeller

CBank

DPayer

Correct answer

B. Seller

Explanation

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

367AccountingMedium

Profit on sale of old plant is:___________?

AProfit and Loss A/c

BIn Trading A/c

CIn Profit and Loss Appropriation A/c

DBeing a non operating item ignored

Correct answer

A. Profit and Loss A/c

Explanation

Profit and Loss A/c is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

368AccountingMedium

Office equipments account is classified as _________ account?

AReal

BNominal

CCapital

DCash

Correct answer

A. Real

Explanation

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

369AccountingMedium

Which one of the following is a capital expenditure?

AExpenditure incurred in connection with the renewal of a Trade Mark.

BGratuities paid to Directors on termination of their services.

CCompensation paid to Directors on termination of their services

DRoyalty paid in installments for the purchase of rights to manufacture and sell patient medicines.

Correct answer

C. Compensation paid to Directors on termination of their services

Explanation

Compensation paid to Directors on termination of their services is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

370AccountingMedium

A sale of Rs. 50.000 to A was entered as a sale to B. This is an example of____________?

AError of principle

BCompensating error

CError of omission

DError of commission

Correct answer

D. Error of commission

Explanation

Error of commission 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 error is an error of principle

A5,000 incurred on installation of new plant debited to travelling expenses A/c

B500 paid for wages debited to salary A/c

C500 being purchase of raw material debited to purchase A/c ` 50

D5,000 received from Sham credited to Ram A/c

Correct answer

A. 5,000 incurred on installation of new plant debited to travelling expenses A/c

Explanation

5,000 incurred on installation of new plant debited to travelling expenses A/c is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

Which one of the following is a capital expenditure?

AExpenditure incurred in connection with the renewal of a Trade Mark.

BGratuities paid to Directors on termination of their services.

CCompensation paid to Directors on termination of their services

DRoyalty paid in installments for the purchase of rights to manufacture and sell patient medicines.

Correct answer

C. Compensation paid to Directors on termination of their services

Explanation

Compensation paid to Directors on termination of their services is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.