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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-9 section-2

Each section contains 100 MCQs on Accounting .
81
XYZ firm has imported a machine from abroad. Which of the following is NOT the element of the machine's cost?
Discuss
Answer & Solution
Answer: Option D
Solution:
XYZ firm has imported a machine from abroad. Refundable tax is NOT the element of the machine's cost.
82
Which of the following foxed assets is not depreciated in the ordinary circumstances?
Discuss
Answer & Solution
Answer: Option C
Solution:
Land foxed assets is not depreciated in the ordinary circumstances. Land is not depreciated, since it has an unlimited useful life.
83
In the calculation of depreciation, all of the following items are actually estimates except:
Discuss
Answer & Solution
Answer: Option C
Solution:
In the calculation of depreciation, all of the following items are actually estimates except Historical cost. A historical cost is a measure of value used in accounting in which the price of an asset on the balance sheet is based on its nominal or original cost when acquired by the company.
84
Under which method of depreciation, the amount of depreciation expenses remains constant throughout the life of the asset?
Discuss
Answer & Solution
Answer: Option C
Solution:
Under Straight line method of depreciation, the amount of depreciation expenses remains constant throughout the life of the asset.
85
An increase in the value of fixed asset is referred to as:
Discuss
Answer & Solution
Answer: Option B
Solution:
An increase in the value of fixed asset is referred to as Appreciation. Appreciation, in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates.
86
The term _______ is generally used for the depreciation of natural resources
Discuss
Answer & Solution
Answer: Option B
Solution:
The term Depletion is generally used for the depreciation of natural resources. Depletion is an accrual accounting technique used to allocate the cost of extracting natural resources such as timber, minerals, and oil from the earth.
87
Which of the following is a biological asset?
Discuss
Answer & Solution
Answer: Option D
Solution:
Living plants and animals is a biological asset. Biological asset is any living plant or animals owned by the business, and are typically measured at fair value minus selling costs.
88
Which of the following is the effect on net income if a business decreases its provision for bad debts?
Discuss
Answer & Solution
Answer: Option A
Solution:
Net income will increase is the effect on net income if a business decreases its provision for bad debts.
89
A firm has not recorded the bad debts by mistake. Which of the following is the effect of bad debt ommission?
Discuss
Answer & Solution
Answer: Option B
Solution:
A firm has not recorded the bad debts by mistake. Net profit would increase is the effect of bad debt ommission.
90
When it is certain that a debt won't be recovered. Which of the following is correct?
Discuss
Answer & Solution
Answer: Option B
Solution:
When Account receivable is credited it is certain that a debt won't be recovered.