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-5 section-24

When investment in private debentures is cancelled then this profit/loss is credited/ debited to

A) Debenture Redemption fund A/c B) General reserve A/c C) Capital reserve A/c D) Any of the above A/c

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Answer & Solution

Answer: Option A

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Concept of conservation refers to taking into account:

A) All profit B) Only cash profit C) Only profit realized D) Profit realized and all possible losses

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Answer & Solution

Answer: Option D

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The premium received on issue of Shares cannot be used for

A) Issue of fully paid bonus shares to the members of the company B) Writing off discount allowed on issue of debendtures of the company C) Paying remuneration to promoters for their services D) Paying premium payable on the redemption of debentures of the company

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Answer & Solution

Answer: Option C

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Underwriting commission is classified as

A) Capital Expenditure B) Capital loss C) Deferred Revenue Expenditure D) Capitalized Expenditure

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Answer & Solution

Answer: Option C

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Income tax deducted from interest paid on debenture is shown in

A) Asset side of balance sheet B) Liabilities side of balance sheet C) Credit side of profit and loss account D) Debit side of profit and loss account

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Answer & Solution

Answer: Option B

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Assertion (A) When a company earns profit prior to its incorporation, it is called capital profit.
Reason (R) Capital profit cannot be used for distribution as dividend to the shareholders.

A) (A) is true, but (R) is false B) Both (A) and (R) are false C) (A) is false, but (R) is true D) Both (A) and (R) are true

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Answer & Solution

Answer: Option D

Solution:

Both (A) and (R) are true

Explanation:

Before incorporation, any profit earned by a company is termed as capital profit. This profit cannot be distributed as dividends to shareholders because dividends can only be distributed from profits earned after incorporation, known as revenue profits.

Therefore, both Assertion (A) and Reason (R) are true, and Reason (R) correctly explains Assertion (A).

Environmental management accounting focuses on

A) natural resources stock B) environmental cost information C) environmental liability costs D) none of the above

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Answer & Solution

Answer: Option B

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A limited company forfeited 100 shares of Rs. 10 each fully called up on which Rs. 4 per share was paid up. The company reissued 50 shares at the rate of Rs. 8 each. The amount transferred to Capital Reserve will be

A) Rs. 500 B) Rs. 200 C) Rs. 250 D) Rs. 100

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Answer & Solution

Answer: Option D

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Premium on issue of shares can be used for:

A) Issue of bonus shares B) Payment of dividends C) Payment of operating expenses D) Redemption of debentures

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Answer & Solution

Answer: Option A

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Which of the following is not a book of primary entry?

A) Ledger B) Cash book C) Sales book D) Bills payable book

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Answer & Solution

Answer: Option A

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