Study & Learn

Accounting MCQs with Explanations

Read every question, see the correct answer, and understand the explanation at your own pace. Study mode has no timer and no negative marking.

10%

40 of 396MCQs reviewed

Study Mode — explanations are always visiblePrefer a timed quiz? Start test

41AccountingMedium

If actual bad debts are more than the provision for bad debts, then there will be a_____________?

ADebit balance of Bad Debts Account

BCredit balance of Provision for Bad Debts Account

CDebit balance of Provision for Bad Debts Account

DDebit balance of Discount on Debtors Account

Correct answer

C. Debit balance of Provision for Bad Debts Account

Explanation

Provision for Bad Debts Account is created for writing off bad debts. Since the provision for bad debts is a credit balance account, If the actual bad debts exceed the provision created then there will be debit balance of provision for bad debts account.

42AccountingMedium

Which of the following relationships is/are false?

AOpening Stock + Purchases – Closing Stock = Cost of Sales

BNet Profit = Gross Profit – Administration and Other expenses

CNet Profit = Gross Profit + Administration expenses and Other expenses

DBoth B. and C. above

Correct answer

D. Both B. and C. above

Explanation

Net Profit= Gross Profit- Administration and other expenses. Hence option B. is false. Opening stock+ Purchases-Closing stock= Cost of material consumed not cost of sales. Option (c ) is false.

43AccountingMedium

Bank reconciliation statement is a part of_________?

ATrial balance

BNone of these

CCash book

DAuditors report

Correct answer

C. Cash book

Explanation

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

44AccountingMedium

Accommodation bills are generally for?

AAll the three

BTo help augment money supply

CFor mutual financial accommodation

DGenuine trade reasons

Correct answer

C. For mutual financial accommodation

Explanation

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

45AccountingMedium

Goods returned by customer should be debited to which of the following accounts?

ASales account

BReturn inward account

CExpenses account

DSales income account

Correct answer

B. Return inward account

Explanation

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

46AccountingMedium

Cash brought by the owner to start business is called__________?

ADrawing

BLoan

CCapital

DNone of these

Correct answer

C. Capital

Explanation

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

47AccountingMedium

An income statement in which each item expressed as percentage of Sale?

AAll of the Above

Bcommon size income statement

CBalance sheet

Dincome statement

Correct answer

B. common size income statement

Explanation

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

48AccountingMedium

For the past 3 years, DK Ltd. has failed to accrue unpaid wages earned by workers during the last week of the year. The amounts omitted, which were considered material, were as follows: March 31,2010 – ` 56,000 March 31, 2011 – ` 51,000 March 31, 2012 – ` 64,000 The entry on March 31, 2012 to rectify these omissions would include a

ADebit to wage expense for ` 64,000

BDebit to wage expense for ` 51,000

CCredit to wage expense for ` 64,000

DDebit to wage expense for ` 13,000

Correct answer

D. Debit to wage expense for ` 13,000

Explanation

Debit to wage expense for ` 13,000 is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

49AccountingMedium

Goods Return by the customer are termed as :

ACustomer return

BPurchase return

CSales return

DInventory return

Correct answer

C. Sales return

Explanation

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

50AccountingMedium

Capital of a business decreases if there is an increase in___________?

AGains

BIncome

CFresh capital

DDrawings

Correct answer

D. Drawings

Explanation

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

If actual bad debts are more than the provision for bad debts, then there will be a_____________?

ADebit balance of Bad Debts Account

BCredit balance of Provision for Bad Debts Account

CDebit balance of Provision for Bad Debts Account

DDebit balance of Discount on Debtors Account

Correct answer

C. Debit balance of Provision for Bad Debts Account

Explanation

Which of the following relationships is/are false?

AOpening Stock + Purchases – Closing Stock = Cost of Sales

BNet Profit = Gross Profit – Administration and Other expenses

CNet Profit = Gross Profit + Administration expenses and Other expenses

DBoth B. and C. above

Correct answer

D. Both B. and C. above

Explanation

Net Profit= Gross Profit- Administration and other expenses. Hence option B. is false. Opening stock+ Purchases-Closing stock= Cost of material consumed not cost of sales. Option (c ) is false.

Accommodation bills are generally for?

AAll the three

BTo help augment money supply

CFor mutual financial accommodation

DGenuine trade reasons

Correct answer

C. For mutual financial accommodation

Explanation

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

For the past 3 years, DK Ltd. has failed to accrue unpaid wages earned by workers during the last week of the year. The amounts omitted, which were considered material, were as follows: March 31,2010 – ` 56,000 March 31, 2011 – ` 51,000 March 31, 2012 – ` 64,000 The entry on March 31, 2012 to rectify these omissions would include a

ADebit to wage expense for ` 64,000

BDebit to wage expense for ` 51,000

CCredit to wage expense for ` 64,000

DDebit to wage expense for ` 13,000

Correct answer

D. Debit to wage expense for ` 13,000

Explanation

Debit to wage expense for ` 13,000 is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.