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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-4

Each section contains 100 MCQs on Accounting .
71
A company cannot issue redeemable preference shares for a period exceeding
Discuss
Answer & Solution
Answer: Option B
Solution:
A company cannot issue redeemable preference shares for a period exceeding 20 years. A company may issue preference shares which are liable to be redeemed within a period not exceeding twenty years from the date of their issue under section 55 of the Companies Act 2013.
72
The following error will affect the Trial Balance
Discuss
Answer & Solution
Answer: Option A
Solution:
Error of partial omission will affect the Trial Balance. This error occurs when a transaction that should have been posted as a debit is posted as credit, for example, in a cash sale, sales are debited and cash is credited.
73
Income includes
Discuss
Answer & Solution
Answer: Option D
Solution:
Income includes Income earned, Income received and Income receivable.
74
Cash Account is
Discuss
Answer & Solution
Answer: Option B
Solution:
Cash Account is Real account. A real account is an account that retains and rolls forward its ending balance from period to period. The areas in the balance sheet in which real accounts are found are assets, liabilities, and equity.
75
Heavy amount spent for the advertisement of new company product is
Discuss
Answer & Solution
Answer: Option B
Solution:
Heavy amount spent for the advertisement of new company product is Deferred Revenue expenditure. Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, but its benefits are to be derived in multiple future accounting periods.
76
Liability for bill discounted is a
Discuss
Answer & Solution
Answer: Option A
Solution:
Liability for bill discounted is a Contingent liability. Contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event.
77
Interest on debentures is calculated on
Discuss
Answer & Solution
Answer: Option C
Solution:
Interest on debentures is calculated on Face value of debentures. This interest amount is paid periodically, generally yearly or half-yearly. The interest is a charge against the profit of the company.
78
The parties to joint venture are called
Discuss
Answer & Solution
Answer: Option D
Solution:
The parties to joint venture are called Co-ventures. With individuals, when two or more persons come together to form a temporary partnership for the purpose of carrying out a particular project, such partnership can also be called a joint venture where the parties are "co-venturers".
79
Under diminishing balance method, depreciation
Discuss
Answer & Solution
Answer: Option C
Solution:
Under diminishing balance method, depreciation decreases every year. Since the book value reduces every year, hence the amount of depreciation also reduces every year. Under this method, the value of the asset never reduces to zero.
80
Legal expenses incurred on a suit for breach of contract to supply goods is a
Discuss
Answer & Solution
Answer: Option C
Solution:
Legal expenses incurred on a suit for breach of contract to supply goods is a Revenue expenditure. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.