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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-8 section-3

Each section contains 100 MCQs on Accounting .
71
Which one of the following is INCORRECT about closing stock?
Discuss
Answer & Solution
Answer: Option D
Solution:
Closing stock does not reduce the resources of business. Closing stock is the amount of inventory that a business still has on hand at the end of a reporting period.
72
What is the next step to Journalizing in accounting cycle?
Discuss
Answer & Solution
Answer: Option B
Solution:
Posting is the next step to Journalizing in accounting cycle. 10 Steps of Accounting Cycle are; Analyzing and Classify Data about an Economic Event. Journalizing the transaction. Posting from the Journals to General Ledger. Preparing the Unadjusted Trial Balance. Recording Adjusting Entries. Preparing the Adjusted Trial Balance. Preparing Financial Statements.
73
Outsider's claim against the assets of the business is called
Discuss
Answer & Solution
Answer: Option A
Solution:
Outsider's claim against the assets of the business is called Liability. Liabilities are defined as a company's legal financial debts or obligations that arise during the course of business operations.
74
An expenditure whose benefit is finished or enjoyed immediately is called
Discuss
Answer & Solution
Answer: Option A
Solution:
An expenditure whose benefit is finished or enjoyed immediately is called Expense. An expense is the cost of operations that a company incurs to generate revenue.
75
A company's merchandise, raw materials, finished and unfinished products which have not yet been sold is known as
Discuss
Answer & Solution
Answer: Option C
Solution:
A company's merchandise, raw materials, finished and unfinished products which have not yet been sold is known as Inventory.
76
What is nature of Capital account?
Discuss
Answer & Solution
Answer: Option B
Solution:
Credit is nature of Capital account. Asset accounts normally have debit balances, while liabilities and capital normally have credit balances.
77
The assets which have a limited useful life are termed as
Discuss
Answer & Solution
Answer: Option B
Solution:
The assets which have a limited useful life are termed as Depreciable assets. The assets which are held by a business for the production and supply of goods and services, expected to be used for more than an accounting year and have a limited useful life are known as Depreciable Assets.
78
A decrease in value of a fixed asset due to age, wear and tear is known as
Discuss
Answer & Solution
Answer: Option A
Solution:
A decrease in value of a fixed asset due to age, wear and tear is known as Depreciation. Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account for declines in value. Businesses depreciate long-term assets for both tax and accounting purposes.
79
In balance sheet, fixed assets are shown at
Discuss
Answer & Solution
Answer: Option D
Solution:
In balance sheet, fixed assets are shown at Written Down Value (WDV). If the asset is not impaired and the company operates under GAAP, then the cost model must be used.
80
The accrual basis of accounting records revenues when they are
Discuss
Answer & Solution
Answer: Option B
Solution:
The accrual basis of accounting records revenues when they are earned. In other words, under the accrual basis of accounting, the receipt of cash and the payment of cash are not the focus of reporting revenues and expenses.