Accounting MCQ Questions and Solutions with Explanations

Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11 Section 12 Section 13 Section 14 Section 15 Section 16 Section 17 Section 18 Section 19 Section 20 Section 21 Section 22 Section 23 Section 24 Section 25 Section 26 Section 27 Section 28 Section 29 Section 30

31.
Income and expenditure account reveals . . . . . . . .

A. cash in hand

B. surplus or deficiency

C. capital account

D. revenue account

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32.
Which of the following is not capital expenditure?

A. Cost of issuing shares and debentures

B. Wages paid for construction of building

C. Repairs on a second-hand machinery newly purchased

D. Purchase of new spark plug at a cost of Rs. 8.50 for a two-year old car

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33.
On forfeiture of shares, which of the following account is credited with the amount of money already received on such shares?

A. shares forfeited a/c

B. share capital a/c

C. unpaid calls a/c

D. share premium a/c

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34.
Cancelling the original bill and drawing a fresh acceptance is known as . . . . . . . .

A. Retiring under rebate

B. Renewal

C. Discounting

D. Bill sent to bank for collection

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35.
X started business with a capital of Rs. 20,000 and purchased goods worth Rs. 2,000 on credit. These transactions may be expressed in the from of 'Accounting Equation' such as:

A. Rs. 22,000 = Rs. 20,000 + Rs. 2,000

B. Rs.20,000 = Rs. 22,000 - Rs. 2,000

C. Rs. 22,000 = Rs. 22,000 + 0

D. Rs. 22,000 = 0 + Rs. 22,000

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36.
The appropriate book to record credit purchase of machinery is . . . . . . . .

A. purchases book

B. journal

C. cash book

D. petty cash book

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37.
Match List-I (Items of expenditure and receipt) with List-II (Nature of expenditure and receipt) and select the correct answer using the options given below the lists:

List-I List-II

a. Premium paid for a lease hold property 1. Revenue expenditure

b. Insurance premium paid for risks against accidental losses of properties (fixed assets) 2. Capital receipt

c. Amount realised from the sale of securities (investment)purchased earlier 3. Deferred revenue expenditure

d. Huge sales promotion expenses 4. Capital expenditure

A. a-4, b-2, c-1, d-3

B. a-3, b-2, c-1, d-4

C. a-4, b-1, c-2, d-3

D. a-3, b-1, c-2, d-4

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38.
A particular firm provided the following data for an accounting year
Current ratio = 2.5 : 1
Liquid ratio = 1.5 : 1
Net working capital = Rs. 6,00,000
Current assets and current liabilities of the firm are, respectively:

A. Rs. 9,00,000 and Rs. 3,00,000

B. Rs. 10,00,000 and Rs. 4,00,000

C. Rs. 8,50,000 and Rs. 2,50,000

D. Rs. 7,50,000 and Rs. 1,50,000

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39.
The cost of a machine having a span of life of 5 years is Rs. 1,00,000. It has a scrap value of Rs. 10,000. The amount of depreciation under the sum of years, digit method will be:

A. Rs. 16,000

B. Rs. 18,000

C. Rs. 25,000

D. Rs. 30,000

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40.
A bank can open a branch only at the permission of the . . . . . . . .

A. SBI

B. RBI

C. Government

D. None of these

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1 2 3 4 5 6 7 8 9 10

List-I	List-II
a. Premium paid for a lease hold property	1. Revenue expenditure
b. Insurance premium paid for risks against accidental losses of properties (fixed assets)	2. Capital receipt
c. Amount realised from the sale of securities (investment)purchased earlier	3. Deferred revenue expenditure
d. Huge sales promotion expenses	4. Capital expenditure

Accounting MCQ Questions and Solutions with Explanations | Commerce

31. Income and expenditure account reveals . . . . . . . .

Answer & Solution

32. Which of the following is not capital expenditure?

Answer & Solution

33. On forfeiture of shares, which of the following account is credited with the amount of money already received on such shares?

Answer & Solution

34. Cancelling the original bill and drawing a fresh acceptance is known as . . . . . . . .

Answer & Solution

35. X started business with a capital of Rs. 20,000 and purchased goods worth Rs. 2,000 on credit. These transactions may be expressed in the from of 'Accounting Equation' such as:

Answer & Solution

36. The appropriate book to record credit purchase of machinery is . . . . . . . .

Answer & Solution

Answer & Solution

38. A particular firm provided the following data for an accounting year Current ratio = 2.5 : 1 Liquid ratio = 1.5 : 1 Net working capital = Rs. 6,00,000 Current assets and current liabilities of the firm are, respectively:

Answer & Solution

39. The cost of a machine having a span of life of 5 years is Rs. 1,00,000. It has a scrap value of Rs. 10,000. The amount of depreciation under the sum of years, digit method will be:

Answer & Solution

40. A bank can open a branch only at the permission of the . . . . . . . .

Answer & Solution

Read More Section(Accounting)

31.
Income and expenditure account reveals . . . . . . . .

32.
Which of the following is not capital expenditure?

33.
On forfeiture of shares, which of the following account is credited with the amount of money already received on such shares?

34.
Cancelling the original bill and drawing a fresh acceptance is known as . . . . . . . .

35.
X started business with a capital of Rs. 20,000 and purchased goods worth Rs. 2,000 on credit. These transactions may be expressed in the from of 'Accounting Equation' such as:

36.
The appropriate book to record credit purchase of machinery is . . . . . . . .

38.
A particular firm provided the following data for an accounting year
Current ratio = 2.5 : 1
Liquid ratio = 1.5 : 1
Net working capital = Rs. 6,00,000
Current assets and current liabilities of the firm are, respectively:

39.
The cost of a machine having a span of life of 5 years is Rs. 1,00,000. It has a scrap value of Rs. 10,000. The amount of depreciation under the sum of years, digit method will be:

40.
A bank can open a branch only at the permission of the . . . . . . . .