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-6

If the net sales of the year is Rs. 2,50,000 and the debtors is Rs. 50,000, then the average collection period will be

A) 45 day B) 54 day C) 73 day D) 37 day

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Answer & Solution

Answer: Option C

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An adjustment entry for prepaid expenses affects

A) Assets and Expenses B) Assets and Income C) Liabilities and Expenses D) Liabilities and Assets

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Answer & Solution

Answer: Option A

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Over-capitalisation can be remedied:

A) By redemption of debentures B) By increasing the rate of interest on debentures C) By issue of bonus shares D) By increasing the number of shares

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Answer & Solution

Answer: Option A

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On dissolution of a firm, if goodwill does not appear in the Balance Sheet of the firm, it is

A) calculated B) not calculated C) calculated and credited to Realisation a/c D) calculated and directly credited to capital accounts of partners

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Answer & Solution

Answer: Option B

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Accounts do not record:

A) Profit and Loss B) Liabilities C) Number of Employees D) Assets

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Answer & Solution

Answer: Option C

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A decreasing current ratio indicates:

A) A stable liquidity B) An increasing liquidity C) A strained liquidity D) Satisfactory current solvency

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Answer & Solution

Answer: Option C

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Which of the following is not a business activity?

A) A person earns Rs. 500 profit selling his old T.V. B) Activities of an insurance company C) Running a provisional store D) Cooking and selling food in a hotel

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Answer & Solution

Answer: Option A

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In the absence of any contract to the contrary, profit on dissolution of a partnership firm is credited to the partner's capital accounts:

A) In the ratio of their capitals just before dissolution B) In the ratio of their capitals as originally contributed by them C) In their profit sharing ratio D) None of the above

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Answer & Solution

Answer: Option C

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Assertion (A): Premium receivedon issue of shares is credited to share premium account but not to profit and loss account.
Reason (R): Since share premium is not a trading profit, it is not distributed to shareholders.

A) Both (A) and (R) are correct, but (R) is not the correct explanation of (A) B) (A) is incorrect, but (R) is correct C) Both (A) and (R) are correct, and (R) is the correct explanation of (A) D) (A) is correct, but (R) is incorrect

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Answer & Solution

Answer: Option C

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Total capital employed is equal to:

A) fixed assets B) fixed assets + net working capital C) total assets D) net worth

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Answer & Solution

Answer: Option B

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