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

61.
Assertion (A): The maximum number of partners has been specified in the Companies Act. 1956.
Reason (R): The Partnership Act, 1932 has been merged with the Companies Act, 1956.
Select the correct answer:

A. Both (A) and (R) are true and (R) is the correct explanation of (A)

B. Both (A) and (R) are true, but (R) is not correct explanation of (A)

C. (A) is true but (R) is false

D. (A) is false but (R) is true

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62.
Which of the following statements is not correct:

A. Bonus shares cannot be issued except out of the profits of the company

B. Bonus shares can be issued either at par or at a premium

C. Only fully paid bonus shares can be issued out of capital redemption reserve

D. Bonus can be utilised for making partly paid up shares as fully paid up

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63.
Buy back of equity shares in any financial year shall not exceed

A. 5% of its total capital

B. 25% of nominal share capital

C. 25% of fully paid equity share capital

D. None of the above

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64.
As applied in Accounting, depreciation:

A. is a process of asset valuation for balance sheet purposes

B. applies only to long life intangible assets

C. is used to indicate a decline in the market value of long-life asset

D. is an accounting process which allocates to cost of long-life asset to various accounting periods

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65.
Advertising expenses done on launching of a new product are treated as

A. Capital Expenditure

B. Revenue Expenditure

C. Deferred Revenue Expenditure

D. None of these

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66.
The Debt Equity ratio of a company for three consecutive years was as follows:

Year Debt Equity Ratio

1989 $$\frac{{399}}{{28}}$$

1990 $$\frac{{493}}{{34}}$$

1991 $$\frac{{624}}{{42}}$$

The aforesaid ratios show:

A. That the company's financial structure is sound

B. That the company is capable of meeting its shrot-term liabilities

C. That the interests of creditors are not safe in the company

D. That the long-term liquidity of the company is improving from year to year

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67.
A and B are partners in a partnership firm without any agreement. A has given a loan of Rs. 50,000 to the firm. At the end of the year, the business incurred loss. The following interest may be paid to A by the firm

A. 5% per annum

B. 6% per annum

C. 6% per month

D. As there is a loss in the business, interest cannot be paid

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68.
In which method of depreciation, asset account is debited with interest?

A. Sum of year's digit method

B. Annuity method

C. Insurance policy method

D. Diminishing Balance Method

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69.
Unless otherwise stated, a Preference Share is always presumed to be

A. cumulative, participating and non-convertible

B. non-cumulative, non-participating and non convertible

C. cumulative, non-participating and non convertible

D. non-cumulative, participating and non convertible

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70.
Which of the following is not business transaction?

A. Purchase Rs. 1,00,00 furniture for business

B. Paid his son's fee Rs. 20,000 from his personal bank account

C. Paid employees salary Rs. 50,000

D. Purchased goods worth Rs. 75,000

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1 2 3 4 5 6 7 8 9 10

Year	Debt Equity Ratio
1989	$$\frac{{399}}{{28}}$$
1990	$$\frac{{493}}{{34}}$$
1991	$$\frac{{624}}{{42}}$$

Accounting MCQ Questions and Solutions with Explanations | Commerce

61. Assertion (A): The maximum number of partners has been specified in the Companies Act. 1956. Reason (R): The Partnership Act, 1932 has been merged with the Companies Act, 1956. Select the correct answer:

Answer & Solution

62. Which of the following statements is not correct:

Answer & Solution

63. Buy back of equity shares in any financial year shall not exceed

Answer & Solution

64. As applied in Accounting, depreciation:

Answer & Solution

65. Advertising expenses done on launching of a new product are treated as

Answer & Solution

66. The Debt Equity ratio of a company for three consecutive years was as follows: Year Debt Equity Ratio 1989 $$\frac{{399}}{{28}}$$ 1990 $$\frac{{493}}{{34}}$$ 1991 $$\frac{{624}}{{42}}$$ The aforesaid ratios show:

Answer & Solution

67. A and B are partners in a partnership firm without any agreement. A has given a loan of Rs. 50,000 to the firm. At the end of the year, the business incurred loss. The following interest may be paid to A by the firm

Answer & Solution

68. In which method of depreciation, asset account is debited with interest?

Answer & Solution

69. Unless otherwise stated, a Preference Share is always presumed to be

Answer & Solution

70. Which of the following is not business transaction?

Answer & Solution

Read More Section(Accounting)

61.
Assertion (A): The maximum number of partners has been specified in the Companies Act. 1956.
Reason (R): The Partnership Act, 1932 has been merged with the Companies Act, 1956.
Select the correct answer:

62.
Which of the following statements is not correct:

63.
Buy back of equity shares in any financial year shall not exceed

64.
As applied in Accounting, depreciation:

65.
Advertising expenses done on launching of a new product are treated as

66.
The Debt Equity ratio of a company for three consecutive years was as follows:

Year Debt Equity Ratio

1989 $$\frac{{399}}{{28}}$$

1990 $$\frac{{493}}{{34}}$$

1991 $$\frac{{624}}{{42}}$$

The aforesaid ratios show:

67.
A and B are partners in a partnership firm without any agreement. A has given a loan of Rs. 50,000 to the firm. At the end of the year, the business incurred loss. The following interest may be paid to A by the firm

68.
In which method of depreciation, asset account is debited with interest?

69.
Unless otherwise stated, a Preference Share is always presumed to be

70.
Which of the following is not business transaction?