Accounting MCQ Questions and Solutions with Explanations

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-2 section-3

What type of expenses are paid out of Gross Profit?

A) General expenses B) Financial expenses C) Selling expenses D) All of the above

Discuss

Answer & Solution

Answer: Option D

Solution:

General expenses, Financial expenses and Selling expenses are paid out of Gross Profit.

Which of the following is NOT an example of intangible assets?

A) Franchise rights B) Goodwill C) Patents D) Land

Discuss

Answer & Solution

Answer: Option D

Solution:

Land is NOT an example of intangible assets. An intangible asset is an asset that is not physical in nature.

Which of the following is an example of business liability?

A) Land B) Building C) Cash D) Creditors

Discuss

Answer & Solution

Answer: Option D

Solution:

Creditors is an example of business liability. A liability is defined as a company's legal financial debts or obligations that arise during the course of business operations.

The unfavorable balance of Profit and Loss account should be

A) Added to liabilities B) Subtracted from current assets C) Subtracted from capital D) Subtracted from liabilities

Discuss

Answer & Solution

Answer: Option C

Solution:

Loss is subtracted from capital account and profit is added to capital account.

Which of the following account will be credited, if business bought goods on credit from Mr. Z?

A) Purchases account B) Mr. Z account C) Cash account D) Sales account

Discuss

Answer & Solution

Answer: Option B

Solution:

Mr. Z account account will be credited, if business bought goods on credit from Mr. Z.

Interest on loan paid by business is an example of

A) Revenue expense B) Income C) Asset D) Return outward

Discuss

Answer & Solution

Answer: Option A

Solution:

Interest on loan paid by business is an example of Revenue expense. A revenue expenditure is a cost that is charged to expense as soon as the cost is incurred.

Which of the following account will be credited when a typewriter is sold that has been used in the office?

A) Office equipment account B) Cash account C) Sales account D) Purchase account

Discuss

Answer & Solution

Answer: Option A

Solution:

Office equipment account will be credited when a typewriter is sold that has been used in the office.

The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the asset, is termed as

A) Appreciation B) Depreciation C) Fluctuation D) None of the above

Discuss

Answer & Solution

Answer: Option B

Solution:

The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the as set, is termed as Depreciation. Depreciation is any method of allocating such net cost to those periods in which the organization is expected to benefit from use of the asset. The asset is referred to as a depreciable asset.

Which of the following item will be shown on debit side of debtors account?

A) Discount received B) Return inwards C) Discount allowed D) Credit sales

Discuss

Answer & Solution

Answer: Option D

Solution:

Credit sales will be shown on debit side of debtors account. Credit sales means allowances of goods to customers in order to pay in advance.

When one or both aspects of a transaction are recorded in the wrong class or category of account, it is called

A) Error of principle B) Error of omission C) Error of commission D) Error of original entry

Discuss

Answer & Solution

Answer: Option A

Solution:

When one or both aspects of a transaction are recorded in the wrong class or category of account, it is called 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.