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

31.
At the time of retirement of a partner profit on revaluation of assets and liabilities is credited to

A. Capital Account of retiring partner

B. Capital Accounts of all partners in their old profit sharing ratio

C. Capital Accounts of remaining partners in their gaining ratio

D. Capital Accounts of remaining partners in their new profit sharing ratio

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32.
Premium received on the issue of shares is shown in:

A. Debit side of Profit and Loss Account

B. Credit side of Profit and Loss Account

C. Assets side of the Balance Sheet

D. Liabilities side of the Balance Sheet

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33.
Which one of the following statements is incorrect?

A. Share premium received on issue of shares can be utilized for writing off the preliminary expenses

B. Capital Redemption Reserve is available only for issuing fully paid Bonus Shares

C. Discount on issue of shares is shown as a reduction from capital

D. At the time of Right issue, the existing share holders gain because the share are generally issued at a price lower than the market price

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34.
Stock Rs. 14,000; Debtors Rs. 20,000: Creditors Rs. 20,000; Credit balance of profit and loss account at the beginning of the year Rs. 18,000; administration and selling expenses Rs. 20,000; 10% dividend on equity capital Rs. 3,000.
The following ratios are also given:
Stock turnover: 5 times
Current ratio 2 : 1
Debtors collection period: 73 days
Outstanding expenses: 15% of creditors
Ratio of net profit after tax to net tangible assets is 1: 10
Rate of Income tax: 5%
Ratio of fixed assets to paid up capital is 9: 10.
The total assets of the firm are:

A. Rs. 70,000

B. Rs. 73,000

C. Rs. 75,000

D. Rs. 78,000

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35.
$$\frac{{{\text{Profit}}}}{{{\text{P/V Ratio}}}} = .\,.\,.\,.\,.\,.\,.\,.$$

A. Break Even Point

B. Variable Cost

C. Fixed Cost

D. Margin of Safety

E. Angle of Incidence

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36.
Realization principle of accounting does not apply to:

A. Service industry

B. Mining industry

C. Railway transport

D. Long-term construction contracts

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37.
Which of the following is a contingent liability?

A. Outstanding wages

B. Declared dividend

C. Liability on bills discounted

D. Prepaid salary

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38.
If cash is Rs. 10,000, closing stock is Rs. 25,000, debtors is Rs. 5000, creditors is Rs. 22,000 and bank overdraft is Rs. 8000, then the current ratio will be

A. 3 : 4

B. 4 : 3

C. 2 : 1

D. 1 : 2

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39.
Expenditure incurred by a publisher for acquiring copyrights is a

A. Capital expenditure

B. Revenue expenditure

C. Deferred revenue expenditure

D. Contingent expenditure

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40.
Under the yield method of valuation of equity share capital, if for an equity share of Rs. 50 the normal rate of return is 10% and expectedrate of return is 5%, then the value of an equity share will be

A. Rs. 25

B. Rs. 40

C. Rs. 50

D. Rs. 100

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Accounting MCQ Questions and Solutions with Explanations | Commerce

31. At the time of retirement of a partner profit on revaluation of assets and liabilities is credited to

Answer & Solution

32. Premium received on the issue of shares is shown in:

Answer & Solution

33. Which one of the following statements is incorrect?

Answer & Solution

Answer & Solution

35. $$\frac{{{\text{Profit}}}}{{{\text{P/V Ratio}}}} = .\,.\,.\,.\,.\,.\,.\,.$$

Answer & Solution

36. Realization principle of accounting does not apply to:

Answer & Solution

37. Which of the following is a contingent liability?

Answer & Solution

38. If cash is Rs. 10,000, closing stock is Rs. 25,000, debtors is Rs. 5000, creditors is Rs. 22,000 and bank overdraft is Rs. 8000, then the current ratio will be

Answer & Solution

39. Expenditure incurred by a publisher for acquiring copyrights is a

Answer & Solution

40. Under the yield method of valuation of equity share capital, if for an equity share of Rs. 50 the normal rate of return is 10% and expectedrate of return is 5%, then the value of an equity share will be

Answer & Solution

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31.
At the time of retirement of a partner profit on revaluation of assets and liabilities is credited to

32.
Premium received on the issue of shares is shown in:

33.
Which one of the following statements is incorrect?

35.
$$\frac{{{\text{Profit}}}}{{{\text{P/V Ratio}}}} = .\,.\,.\,.\,.\,.\,.\,.$$

36.
Realization principle of accounting does not apply to:

37.
Which of the following is a contingent liability?

38.
If cash is Rs. 10,000, closing stock is Rs. 25,000, debtors is Rs. 5000, creditors is Rs. 22,000 and bank overdraft is Rs. 8000, then the current ratio will be

39.
Expenditure incurred by a publisher for acquiring copyrights is a

40.
Under the yield method of valuation of equity share capital, if for an equity share of Rs. 50 the normal rate of return is 10% and expectedrate of return is 5%, then the value of an equity share will be