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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-4

Each section contains 100 MCQs on Accounting .
91
Noting charges are paid at the time of
Discuss
Answer & Solution
Answer: Option C
Solution:
Noting charges are paid at the time of Dishonor of the bill. When a Bill of Exchange is dishonoured, in order to prove the fact, the drawer (or holder) may get the bill of exchange noted and protested through a public official known as “Notary Public” Noting is the recording of the fact of dishonour by a Notary public which becomes an evidence of dishonour.
92
Dismantling and demolition charges is a
Discuss
Answer & Solution
Answer: Option C
Solution:
Dismantling and demolition charges is a Revenue expenditure. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.
93
The owner of consignment stock is
Discuss
Answer & Solution
Answer: Option A
Solution:
The owner of consignment stock is Consignor.
94
Which account is the odd one out?
Discuss
Answer & Solution
Answer: Option C
Solution:
Stock of raw materials is the odd one out. Raw materials inventory is the total cost of all component parts currently in stock that have not yet been used in work-in-process or finished goods production. There are two subcategories of raw materials, which are: Direct materials.
95
X draws a bill on Y. X endorsed the bill to Z. ____ will be the payee of the bill.
Discuss
Answer & Solution
Answer: Option C
Solution:
X draws a bill on Y. X endorsed the bill to Z. Z will be the payee of the bill.
96
Interest on drawings is ___ for the business
Discuss
Answer & Solution
Answer: Option C
Solution:
Interest on drawings is gain for the business. Interest on drawings is an income to the firm, and hence it is credited to the profit and loss appropriation account. On the other hand, interest on drawings is an expense to the partners, and hence it is debited to their capital accounts.
97
Narrations are given at the end of
Discuss
Answer & Solution
Answer: Option D
Solution:
Narrations are given at the end of each journal entry. Each journal entry includes the date, the amount of the debit and credit, the titles of the accounts being debited and credited (with the title of the credited account being indented), and also a short narration of why the journal entry is being recorded.
98
The basic consideration(s) in distinction between capital and revenue expenditure is/are
Discuss
Answer & Solution
Answer: Option D
Solution:
The basic considerations in distinction between capital and revenue expenditure are Nature of business, Effect on revenue generating capacity of the business and Purpose of expenses.
99
"Treating a revenue expenditure as a capital expenditure" is an example of
Discuss
Answer & Solution
Answer: Option B
Solution:
"Treating a revenue expenditure as a capital expenditure" is an example of Error of principle. An error of principle is an accounting mistake in which an entry is recorded in the incorrect account, violating the fundamental principles of accounting. An error of principle is a procedural error, meaning that the value recorded was the correct value but placed incorrectly.
100
If an effect of an error is cancelled by the effect of some other error, it is commonly known as
Discuss
Answer & Solution
Answer: Option B
Solution:
If an effect of an error is cancelled by the effect of some other error, it is commonly known as Compensatory errors. A compensating error is an accounting error that offsets another accounting error. These errors can be difficult to spot when they occur within the same account and in the same reporting period, since the net effect is zero.