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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-2

Each section contains 100 MCQs on Accounting .
21
Introduction of capital by owner of business is recorded on which side of a cash book?
Discuss
Answer & Solution
Answer: Option A
Solution:
Introduction of capital by owner of business is recorded on Receipts side of a cash book.
22
Cash book with cash and discount column is mostly referred to as
Discuss
Answer & Solution
Answer: Option B
Solution:
Two Column Cash Books - In this discounts is also recorded with cash transactions. So both discounts received and the discount that is given is recorded here. If any organization is in a general practice of giving or receiving discounts this is the preferable option.
23
A cash book that is used to record the small payments of cash is generally referred to as
Discuss
Answer & Solution
Answer: Option D
Solution:
A cash book that is used to record the small payments of cash is generally referred to as Petty cash book. Petty cash book can be expressed as a formal summarization of the petty cash expenditures which refers to the day-to-day normal expenditures of the business which is not related to the direct line of the business.
24
Purchase of office equipment for cash will be recorded on which side of a cash book?
Discuss
Answer & Solution
Answer: Option B
Solution:
Purchase of office equipment for cash will be recorded on Payments side of a cash book. All transactions in the cash book have two sides: debit and credit. All cash receipts are recorded on the left-hand side, and all cash payments are recorded by date on the right-hand side.
25
Postdated cheques are considered as
Discuss
Answer & Solution
Answer: Option C
Solution:
Postdated cheques are considered as Accounts receivable. If the postdated check was received as payment on accounts receivable, the accounts receivable balance is not reduced until the date of the check.
26
Postage stamps on hand are considered as
Discuss
Answer & Solution
Answer: Option B
Solution:
Postage stamps on hand are considered as Prepaid expenses. Prepaids are any expense the business pays for in advance, such as rent, insurance, office supplies, postage, travel expense, or advances to employees.
27
Petty cash fund is supposed to be replenished
Discuss
Answer & Solution
Answer: Option C
Solution:
Petty cash fund is supposed to be replenished at the end of every accounting period. Replenish means to return the amount of actual cash in the petty cash box back to the amount appearing in the general ledger account Petty Cash. This is done whenever the amount of actual cash in the petty cash box is low and at the end of each accounting period.
28
A credit balance in cash book indicates
Discuss
Answer & Solution
Answer: Option C
Solution:
A credit balance in cash book indicates Bank overdraft. Overdrafts are where the bank account becomes negative and the businesses in effect have borrowed from the bank. This is shown in the cash book as a credit balance.
29
Favourable balance of cash book implies
Discuss
Answer & Solution
Answer: Option B
Solution:
Favourable balance of cash book implies balance at Bank. The credit balance as per the cash book indicates bank overdraft.
30
A cash deposit made by business appears on the bank statement as ____ balance
Discuss
Answer & Solution
Answer: Option B
Solution:
A cash deposit made by business appears on the bank statement as Credit balance.