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

21.
Liquid or Quick assets =

A. Current assets - (Stock + Work in progress)

B. Current assets + Stock + Work in progress

C. (Current assets + Stock) + Work in progress

D. (Current assets + Work in progress) - Stock

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22.
Lower the Debt Equity ratio

A. Lower the protection to creditors

B. Higher the protection to creditors

C. It does not affect the creditors

D. None of the above

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23.
A higher inventory ratio indicates

A. Better inventory management

B. Quicker turnover

C. Both A and B

D. None of the above

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24.
Return on Investment Ratio (ROI) =

A. (Gross profit / Net sales) x 100

B. (Gross profit x Sales / Fixed assets) x 100

C. (Net profit / Sales) x 100

D. (Net profit / Total assets) x 100

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25.
A low Return on Investment Ratio (ROI) indicates

A. Improper utilization of resources

B. Over investment in assets

C. Both A and B

D. None of the above

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26.
Sales expenditure budget is prepared by estimating the expense(s) of

A. Advertisement

B. Market analysis

C. Salesman's salary

D. All of the above

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27.
Budgeting is difficult to apply in the following cases

A. Products subjected to rapid changes

B. Job order manufacturing

C. Uncertain market condition

D. All of the above

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28.
A Master Budget consists of

A. Sales budget

B. Production budget

C. Material budget

D. All of the above

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29.
The accounting process involves recording

A. Quantifiable economic event

B. Non Quantifiable economic event

C. All of them

D. None of them

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30.
In accounting, an economic event is referred to as

A. Cash

B. Bank statement

C. Transaction

D. Exchange of money

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Accounting MCQ Questions and Solutions with Explanations | Commerce

21. Liquid or Quick assets =

Answer & Solution

22. Lower the Debt Equity ratio

Answer & Solution

23. A higher inventory ratio indicates

Answer & Solution

24. Return on Investment Ratio (ROI) =

Answer & Solution

25. A low Return on Investment Ratio (ROI) indicates

Answer & Solution

26. Sales expenditure budget is prepared by estimating the expense(s) of

Answer & Solution

27. Budgeting is difficult to apply in the following cases

Answer & Solution

28. A Master Budget consists of

Answer & Solution

29. The accounting process involves recording

Answer & Solution

30. In accounting, an economic event is referred to as

Answer & Solution

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21.
Liquid or Quick assets =

22.
Lower the Debt Equity ratio

23.
A higher inventory ratio indicates

24.
Return on Investment Ratio (ROI) =

25.
A low Return on Investment Ratio (ROI) indicates

26.
Sales expenditure budget is prepared by estimating the expense(s) of

27.
Budgeting is difficult to apply in the following cases

28.
A Master Budget consists of

29.
The accounting process involves recording

30.
In accounting, an economic event is referred to as