Accounting MCQ Questions and Solutions with Explanations

21

A trader maintains his books of accounts on Single Entry basis. His books of accounts show that his total purchases during the year were Rs. 90,000 of which he returned goods worth Rs. 10,000. His credit sales were Rs. 50,000 and cash sales were Rs. 80,000 of the total sales goods returned were Rs. 30,000. Closing stock is Rs. 12,000. He sells his goods at cost plus $$33\frac{1}{3}\% .$$ His opening stock is:

A) Rs. 12,000 B) Rs. 10,000 C) Rs. 8,000 D) Rs. 7,000

Discuss

Answer & Solution

Answer: Option D

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22

Acceptances, endorsements and obligations on behalf of a customer will be shown as . . . . . . . . in the balance sheet of a company.

A) other asset B) other liability C) borrowings D) contingent liability

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Answer & Solution

Answer: Option D

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23

Under the accrual concept, which one of the following will not be shown as an asset/liability in the balance sheet of an entity?

A) Interest due but not paid B) Interest due but not received C) Interest due and paid D) Interest paid but not due

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Answer & Solution

Answer: Option C

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24

The amount of depreciation under straight line method vis-a-vis written down value method, when the rate of depreciation is same, would be:

A) equal in all years B) equal in the first year but higher is subsequent years C) equal in the first year but lower in subsequent years D) lower in the first year but equal in subsequent years

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Answer & Solution

Answer: Option B

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25

Match List-I with List-II and select the correct answer using the options given below the list:

List-I	List-II
a. Compensating errors	1. Not recording a business transaction
b. Errors of omission	2. Charging a Revenue item to capital
c. Errors of principle	3. Writing a debit item on the credit side and a credit item on the debit side of equal amount
d. Errors of commission	4. Posting a correct amount to a wrong account

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

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Answer & Solution

Answer: Option C

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26

Which of the following are prepared by the organisations keeping only incomplete accounting records?
I. Cash book
II. Customer's Accounts
III. Expenses Accounts
IV. Day Books
Choose the correct answer using the options given below:

A) I, II and III B) I, II and IV C) I, III and IV D) II, III and IV

Discuss

Answer & Solution

Answer: Option B

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27

Contingent liability is shown in the balance sheet because of:

A) Convention of consistency B) Convention of materiality C) Convention of disclosure D) Convention of adventure

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Answer & Solution

Answer: Option C

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28

Admission fee income should be . . . . . . . .

A) capitalized B) treated as a revenue C) treated as revenue unless the amount is pretty large D) treated as a liability

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Answer & Solution

Answer: Option C

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29

If on 1^st January 1983 a plant is purchased for Rs. 1,20,000, its estimated life is ten years and its salvage value is Rs. 10,000 under which one of the following method would the 1983 depreciation be the largest?

A) Straight line method B) Double-declining balance method C) Sum of the year's digits method D) 15% on original cost

Discuss

Answer & Solution

Answer: Option C

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30

The main purpose of preparing a bank reconciliation statement is . . . . . . . .

A) to know the bank balance B) to compare the entries in the cash and pass books C) to correct the cash after comparing with pass books D) to reconcile cash balance as per pass book with the balance in the pass book

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Answer & Solution

Answer: Option D

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Accounting MCQ Questions and Solutions with Explanations | Commerce