ExamVeda
Login
Home

Accounting MCQ Questions and Solutions with Explanations | Commerce

Accounting MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Accounting MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-10 section-2

Each section contains 100 MCQs on Accounting .
91
A recovery of bad debt
Discuss
Answer & Solution
Answer: Option A
Solution:
A recovery of bad debt increases net income. Bad debt recovery is a payment received for a debt that was written off and considered uncollectible. The receivable may come in the form of a loan, credit line, or any other accounts receivable. Because it generally generates a loss when it is written off, bad debt recovery usually produces income.
92
What does 'aged debtors analysis' signify?
Discuss
Answer & Solution
Answer: Option A
Solution:
Aged debtors analysis shows how long debts have been outstanding. An aged debtors report is a totalled list of all the invoices your customers haven't yet paid you for, less any credit notes you've issued to your customers and not yet refunded them for.
93
Which of the following is the most common cause of bad debt?
Discuss
Answer & Solution
Answer: Option D
Solution:
Debtor declared to be a bankrupt is the most common cause of bad debt. A bad debt is a monetary amount owed to a creditor that is unlikely to be paid and, or which the creditor is not willing to take action to collect for various reasons, often due to the debtor not having the money to pay, for example due to a company going into liquidation or insolvency.
94
Which accounting concept dictates the inclusion of 'provision for doubtful debts' in the financial statements?
Discuss
Answer & Solution
Answer: Option D
Solution:
Prudence concept dictates the inclusion of 'provision for doubtful debts' in the financial statements.
95
Which of the following is a commonly used base to create the provision for doubtful debts?
Discuss
Answer & Solution
Answer: Option B
Solution:
Total credit sales is a commonly used base to create the provision for doubtful debts. The provision for doubtful debts is the estimated amount of bad debt that will arise from accounts receivable that have been issued but not yet collected. It is identical to the allowance for doubtful accounts.
96
Provision for doubtful debts account is a/an
Discuss
Answer & Solution
Answer: Option B
Solution:
Provision for doubtful debts account is an Contra asset account. It is used along with the account Accounts Receivable in order for the balance sheet to report the net realizable value of the company's accounts receivable.
97
Provision for cash discount on debtors is a percentage of
Discuss
Answer & Solution
Answer: Option C
Solution:
Provision for cash discount on debtors is a percentage of Net debtors less provision for doubtful debts.
98
The value of inventories or stock is figured out at the lower of cost and
Discuss
Answer & Solution
Answer: Option D
Solution:
The value of inventories or stock is figured out at the lower of cost and Net realizable value.
99
An overstatement in the value of closing stock overstates all of the following except
Discuss
Answer & Solution
Answer: Option D
Solution:
An overstatement in the value of closing stock overstates all of the following except Cost of goods sold.
100
All of the following are the methods of inventory costing except
Discuss
Answer & Solution
Answer: Option D
Solution:
Stock take is not the methods of inventory costing. Stock-taking or "inventory checking" or "wall-to-wall" is the physical verification of the quantities and condition of items held in an inventory or warehouse. This may be done to provide an audit of existing stock. It is also the source of stock discrepancy information.