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-1 section-14

Fixed assets are reported in the Balance Sheet at historical cost basis. This is done in order to comply with the accounting principle of:

A) Going concern principle B) Conservatism principle C) Constant money value principle D) Realisation principle

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Answer & Solution

Answer: Option A

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Issue of debenture is a-

A) Use of cash B) Source of cash C) Profit from operation D) None of the above

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Answer & Solution

Answer: Option B

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Arrange the following categories of share capital of a company in the correct order.
1. Paid-up capital
2. Issued capital
3. Called-up capital
4. Subscribed share capital

A) 2, 4, 3, 1 B) 1, 2, 3, 4 C) 3, 2, 4, 1 D) 3, 2, 1, 4

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Answer & Solution

Answer: Option A

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The term 'risk capital' denotes:

A) Equity capital B) Debt capital C) Preference share capital D) Long term liabilities

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Answer & Solution

Answer: Option A

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Bonus Shares can be issued out of:

A) Balance of Profit and Loss Account B) Share premium Account C) Capital Reserve D) All of the above

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Answer & Solution

Answer: Option D

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The source of cash inflow in cash flow statement is:

A) Non-trading payment B) Increase in current assets C) Decrease in liabilities D) None of the above

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Answer & Solution

Answer: Option D

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If the average stock of a firm is Rs. 40,000 and its opening stock is Rs. 5,000 less than the closing stock, what would be the value of Opening Stock?

A) Rs. 42,000 B) Rs. 40,000 C) Rs. 35,000 D) Rs. 37,500

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Answer & Solution

Answer: Option D

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Capital account is opened in case of:

A) Merger B) Partnership of business C) Purchase of business D) Trading

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Answer & Solution

Answer: Option B

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According to Section 80 of the Companies Act, 1956, a company cannot redeem its Preference shares out of:

A) Revenue Profits B) Net proceeds of fresh issue C) Partly out of Revenue Profit and partly out of net proceeds of fresh issue D) Out of sale proceeds of fixed assets

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Answer & Solution

Answer: Option D

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A person starts a business with a capital of Rs. 45,000. He purchased goods on credit worth Rs. 5,000. These transactions can be expressed in an accounting equation as-

A) Rs. 50,000 = Rs. 50,000 - Rs. 45,000 B) Rs. 50,000 = Rs. 50,000 + 0 C) Rs. 50,000 = Rs. 45,000 + Rs. 5,000 D) Rs. 45, 000 = Rs. 50,000 - Rs. 5,000

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Answer & Solution

Answer: Option C

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