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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-3

Each section contains 100 MCQs on Accounting .
91
Purchase of fixed assets on credit is originally recorded in
Discuss
Answer & Solution
Answer: Option D
Solution:
Purchase of fixed assets on credit is originally recorded in Journal Proper. On the assumption that the asset was purchased on credit, the initial entry is a credit to accounts payable and a debit to the applicable fixed asset account for the cost of the asset.
92
The claims against the company not acknowledged as debts are shown as
Discuss
Answer & Solution
Answer: Option C
Solution:
The claims against the company not acknowledged as debts are shown as notes to balance sheet. All claims which the company does not acknowledge as debts should be disclosed. Claims against the company by the labour union for additional wages, compensation, etc. come under this category.
93
Under cash basis of accounting, revenue is recognized when
Discuss
Answer & Solution
Answer: Option B
Solution:
Under cash basis of accounting, revenue is recognized when Cash is received. Realizable means it is reasonable to expect that cash will be received in the future.
94
The trade discount on purchases is recorded
Discuss
Answer & Solution
Answer: Option D
Solution:
The trade discount on purchases are not all recorded in the books. Trade discount is not separately shown in the books of accounts, and all amounts recorded in a purchases or sales book are done in the net amount only.
95
Which of the following is a leverage ratio?
Discuss
Answer & Solution
Answer: Option A
Solution:
Debt equity ratio is a leverage ratio. The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets. Closely related to leveraging, the ratio is also known as risk, gearing or leverage.
96
The document inviting offers from public to subscribe for the debentures or shares of a body corporate is a
Discuss
Answer & Solution
Answer: Option D
Solution:
The document inviting offers from public to subscribe for the debentures or shares of a body corporate is a Prospectus.
97
The portion of the acquisition cost of an asset yet to be allocated is known as
Discuss
Answer & Solution
Answer: Option A
Solution:
The portion of the acquisition cost of an asset yet to be allocated is known as Written down value. Written-down value is the value of an asset after accounting for depreciation or amortization.
98
Which of the following appears in the profit and loss appropriation account?
Discuss
Answer & Solution
Answer: Option B
Solution:
Dividend appears in the profit and loss appropriation account. The main intention of preparing a profit and loss appropriation account is to show the distribution of profits among the partners.
99
Which of the following inventory valuation methods show higher profits during the period of rising prices?
Discuss
Answer & Solution
Answer: Option A
No explanation is given for this question. Let's Discuss on Board
100
The main objective of providing depreciation is to
Discuss
Answer & Solution
Answer: Option C
Solution:
The main objective of providing depreciation is to Create funds for replacement of fixed assets. The main objective of charging depreciation is to accumulate adequate fund to replace old asset with the new one after the useful life. Depreciation is charged to fixed assets which helps to show the current value of the asset.