Accounting Multiple Choice Questions

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

Stay tuned to BYJU’S for more MCQs on Accountancy, question papers, sample papers, syllabus and Commerce notifications.

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