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-7 section-16

Assertion (A): The maximum number of partners has been specified in the Companies Act. 1956.
Reason (R): The Partnership Act, 1932 has been merged with the Companies Act, 1956.
Select the correct answer:

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

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Answer: Option C

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Which of the following statements is not correct:

A) Bonus shares cannot be issued except out of the profits of the company B) Bonus shares can be issued either at par or at a premium C) Only fully paid bonus shares can be issued out of capital redemption reserve D) Bonus can be utilised for making partly paid up shares as fully paid up

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Answer: Option A

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Buy back of equity shares in any financial year shall not exceed

A) 5% of its total capital B) 25% of nominal share capital C) 25% of fully paid equity share capital D) None of the above

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Answer: Option C

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As applied in Accounting, depreciation:

A) is a process of asset valuation for balance sheet purposes B) applies only to long life intangible assets C) is used to indicate a decline in the market value of long-life asset D) is an accounting process which allocates to cost of long-life asset to various accounting periods

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Answer: Option D

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Advertising expenses done on launching of a new product are treated as

A) Capital Expenditure B) Revenue Expenditure C) Deferred Revenue Expenditure D) None of these

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Answer: Option C

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The Debt Equity ratio of a company for three consecutive years was as follows:

Year	Debt Equity Ratio
1989	$$\frac{{399}}{{28}}$$
1990	$$\frac{{493}}{{34}}$$
1991	$$\frac{{624}}{{42}}$$

The aforesaid ratios show:

A) That the company's financial structure is sound B) That the company is capable of meeting its shrot-term liabilities C) That the interests of creditors are not safe in the company D) That the long-term liquidity of the company is improving from year to year

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Answer: Option C

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A and B are partners in a partnership firm without any agreement. A has given a loan of Rs. 50,000 to the firm. At the end of the year, the business incurred loss. The following interest may be paid to A by the firm

A) 5% per annum B) 6% per annum C) 6% per month D) As there is a loss in the business, interest cannot be paid

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Answer: Option B

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In which method of depreciation, asset account is debited with interest?

A) Sum of year's digit method B) Annuity method C) Insurance policy method D) Diminishing Balance Method

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Answer: Option B

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Unless otherwise stated, a Preference Share is always presumed to be

A) cumulative, participating and non-convertible B) non-cumulative, non-participating and non convertible C) cumulative, non-participating and non convertible D) non-cumulative, participating and non convertible

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Answer: Option C

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Which of the following is not business transaction?

A) Purchase Rs. 1,00,00 furniture for business B) Paid his son's fee Rs. 20,000 from his personal bank account C) Paid employees salary Rs. 50,000 D) Purchased goods worth Rs. 75,000

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Answer: Option B

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