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-3 section-11

Match the items of List-I with items of List-Il and indicate of correct matching

List-I	List-II
a. Principle of separate entity	1. Valuing plant and machinery at cost less depreciation
b. Principle of conservatism	2. Recording punctuality and honesty of an organization's employees
c. Principle of money measurement	3. Capital contributed by proprietor is shown as liability in the balance sheet
d. Historical cost concept	4. Valuing inventories at cost or market price whichever is less

A) a-3, b-2, c-1, d-4 B) a-3, b-4, c-2, d-1 C) a-4, b-3, c-1, d-2 D) a-3, b-1, c-2, d-4

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Answer & Solution

Answer: Option B

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Which one of the following statements is not true:

A) Both shares and debentures of a company can be issued at a discount up to a maximum of 10% B) Allotment of shares is done only when minimum subscription is received C) Preference shares have priority over equity shares with regard to distribution of income D) The Company cannot repurchase its own equity shares

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Answer: Option D

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What is not prepared in final accounts of Not for profit organisation?

A) Receipt and payment account B) Income and Expenditure account C) Trading A/c D) Balance sheet

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Answer: Option C

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Given:
Sales = Rs. 1,00,000
Variable cost = Rs. 50,000
Interest = Rs. 5,000
Fixed cost = Rs. 25,000 Operating leverage will be

A) 4 B) 2 C) 6 D) 1.8

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Answer: Option B

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Obsolescence means decline in the value due to:

A) Fall in market price B) Physical wear and tear C) Innovation D) Efflux of time

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Answer: Option C

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X and Y are partners sharing profits and losses in the ratio of 3 : 2 (X's capital is Rs. 30,000 and Y's capital is Rs. 15,000). They admitted Z agreed to give $${\frac{1}{5}^{{\text{th}}}}$$ share of profits to him. How much Z should bring in towards his capital?

A) Rs. 9,000 B) Rs. 11,250 C) Rs. 12,000 D) Rs. 14,500

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Answer: Option B

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Gamer vs Murray rule requires

A) that the solvent partners should bear the loss arising due to insolvency of a partner in their last agreed capital ratio B) that the solvent partners should bring in cash equal to their respective shares of the loss on realisation C) Both A and B D) None of the above

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Answer: Option C

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Which of the following parties cannot be granted shares or share optionsby the entity?

A) Executive director B) Supplier of goods and services C) Chief Accountant D) None of the above

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Answer: Option D

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Total of the two sides of account and to find out the difference is called

A) Totalling B) Trialing C) Balancing D) Analysing

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Answer: Option C

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On 1^st January, 2005 the plant and machinery was valued at Rs. 80,000 and on 31^st December, 2005 it was valued at Rs. 1,20,000. Rs. 10,000 was written off as depreciation during the year. This will result in:

A) Source of Funds Rs. 30,000 B) Application of funds Rs. 50,000 C) Application of funds Rs. 40,000 D) Source of fund Rs. 50,000

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Answer: Option B

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