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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-3 section-1

Each section contains 100 MCQs on Accounting .
21
Liquid or Quick assets =
Discuss
Answer & Solution
Answer: Option A
Solution:
Liquid or Quick assets = Current assets - (Stock + Work in progress).
22
Lower the Debt Equity ratio
Discuss
Answer & Solution
Answer: Option B
Solution:
Lower the Debt Equity ratio higher is the protection to creditors. Creditors usually like a low debt to equity ratio because a low ratio (less than 1) is the indication of greater protection to their money.
23
A higher inventory ratio indicates
Discuss
Answer & Solution
Answer: Option C
Solution:
A higher inventory ratio indicates Better inventory management and Quicker turnover.
24
Return on Investment Ratio (ROI) =
Discuss
Answer & Solution
Answer: Option D
Solution:
Return on Investment Ratio (ROI) = (Net profit / Total assets) x 100.
Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments.
25
A low Return on Investment Ratio (ROI) indicates
Discuss
Answer & Solution
Answer: Option C
Solution:
A low Return on Investment Ratio (ROI) indicates Improper utilization of resources and Over investment in assets.
26
Sales expenditure budget is prepared by estimating the expense(s) of
Discuss
Answer & Solution
Answer: Option D
Solution:
Sales expenditure budget is prepared by estimating the expense(s) of Advertisement, Market analysis and Salesman's salary.
27
Budgeting is difficult to apply in the following cases
Discuss
Answer & Solution
Answer: Option D
Solution:
Budgeting is difficult to apply in the Products subjected to rapid changes, Job order manufacturing and Uncertain market condition.
28
A Master Budget consists of
Discuss
Answer & Solution
Answer: Option D
Solution:
A Master Budget consists of Sales budget, Production budget and Material budget. The master budget is the aggregation of all lower-level budgets produced by a company's various functional areas, and also includes budgeted financial statements, a cash forecast, and a financing plan.
29
The accounting process involves recording
Discuss
Answer & Solution
Answer: Option A
Solution:
The accounting process involves recording Quantifiable economic event. An accounting event is a transaction that is recognized in the financial statements of an accounting entity.
30
In accounting, an economic event is referred to as
Discuss
Answer & Solution
Answer: Option C
Solution:
In accounting, an economic event is referred to as Transaction. An accounting event is a transaction that is recognized in the financial statements of an accounting entity. In accounting, a transaction includes such things as recording the depreciation of an asset or payment of dividends. Accounting events can be either external or internal.