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

71.
The following is the position of current assets and current liabilities:

31^st December, 94 31^st December, 95

Debtors Rs. 30,000 Rs. 24,000

Creditors Rs. 20,000 Rs. 30,000

Stock Rs. 16,000 Rs. 20,000

Prepaid expenses Rs. 8,000 Rs. 12,000

Profit made during the year Rs. 5,00,000 after considering the following items:

Depreciation on plant Rs. 20,000

Preliminary expenses written off Rs. 10,000

Transfer to general reserve Rs. 14,000

Profit on sale of land Rs. 6,000

The cash from operations is:

A. Rs. 5,44,000

B. Rs. 5,38,000

C. Rs. 5,46,000

D. Rs. 5,54,000

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72.
The balance in share forfeiture account, after the reissue of all forfeited shares, should be

A. transferred to Goodwill A/c

B. transferred to Capital Reserve A/c

C. shown as Share Forfeiture A/c

D. added to paid-up capital

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73.
Raj industires limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If the right issue price is Rs. 180 per share and the market value is Rs. 200 per share, then the value of a right is

A. Rs. 20

B. Rs. 180

C. Rs. 200

D. Rs. 40

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74.
Assertion (A): Inspite of a higher operating ratio the profitability tends to be lower.
Reason (R): Operating ratio shows a relationship between net operating profit and net sales.
Now, 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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75.
Ram and Shyam are sharing profits in the ratio 3 : 2. They admit Mohan in the partnership and their new profit sharing ratio becomes 2 : 2 : 1. If Mohan brings `1,000 as goodwill then Shyam will get.

A. Rs. 400

B. Rs. 500

C. None of the above

D. Rs. 1,000

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76.
In which Head, dividend received by Financial Enterprise is shown in the Cash Flow Statement?

A. Operating Activities

B. Investment Activities

C. Financial Activities

D. All of these

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77.
The basis of income Measurement is

A. Matching concept

B. Accounting Period concept

C. Money Measurement concept

D. Cost concept

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78.
From the following statements related to insolvency account mark your answer according to the answer code given:
i. List A contains particulars relating to unsecured creditors.
ii. All taxes due are considered preferential creditors.
iii. Properties held by the insolvent in the fiduciary capacity can be distributed amongst his creditors.
iv. List D contains the particulars relating to assets and properties.

A. i and ii are correct

B. i and iii are correct

C. i and iv are correct

D. ii and iv are correct

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79.
Given,

Net Profit after tax Rs. 3,25,000

Rate of Income tax 50%

12.5% convertible debentures of Rs. 100 each Rs. 4,00,000

Fixed assets (at cost) Rs. 12,30,000

Depreciation up-to-date Rs. 2,30,000

Current assets Rs. 7,50,000

Current liabilities Rs. 3,50,000

Return on Investment is

A. 25%

B. 30%

C. 40%

D. 50%

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80.
A Trial Balance shows

A. The balance of Profit and Loss Account

B. Complete accuracy of accounting done by the accountant

C. Arithmetical accuracy of ledger balances

D. Balance between assets and liabilities

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1 2 3 4 5 6 7 8 9 10

	31^st December, 94	31^st December, 95
Debtors	Rs. 30,000	Rs. 24,000
Creditors	Rs. 20,000	Rs. 30,000
Stock	Rs. 16,000	Rs. 20,000
Prepaid expenses	Rs. 8,000	Rs. 12,000

Depreciation on plant	Rs. 20,000
Preliminary expenses written off	Rs. 10,000
Transfer to general reserve	Rs. 14,000
Profit on sale of land	Rs. 6,000

Net Profit after tax	Rs. 3,25,000
Rate of Income tax	50%
12.5% convertible debentures of Rs. 100 each	Rs. 4,00,000
Fixed assets (at cost)	Rs. 12,30,000
Depreciation up-to-date	Rs. 2,30,000
Current assets	Rs. 7,50,000
Current liabilities	Rs. 3,50,000

Accounting MCQ Questions and Solutions with Explanations | Commerce

Answer & Solution

72. The balance in share forfeiture account, after the reissue of all forfeited shares, should be

Answer & Solution

73. Raj industires limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If the right issue price is Rs. 180 per share and the market value is Rs. 200 per share, then the value of a right is

Answer & Solution

74. Assertion (A): Inspite of a higher operating ratio the profitability tends to be lower. Reason (R): Operating ratio shows a relationship between net operating profit and net sales. Now, select the correct answer:

Answer & Solution

75. Ram and Shyam are sharing profits in the ratio 3 : 2. They admit Mohan in the partnership and their new profit sharing ratio becomes 2 : 2 : 1. If Mohan brings `1,000 as goodwill then Shyam will get.

Answer & Solution

76. In which Head, dividend received by Financial Enterprise is shown in the Cash Flow Statement?

Answer & Solution

77. The basis of income Measurement is

Answer & Solution

Answer & Solution

79. Given, Net Profit after tax Rs. 3,25,000 Rate of Income tax 50% 12.5% convertible debentures of Rs. 100 each Rs. 4,00,000 Fixed assets (at cost) Rs. 12,30,000 Depreciation up-to-date Rs. 2,30,000 Current assets Rs. 7,50,000 Current liabilities Rs. 3,50,000 Return on Investment is

Answer & Solution

80. A Trial Balance shows

Answer & Solution

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72.
The balance in share forfeiture account, after the reissue of all forfeited shares, should be

73.
Raj industires limited offers equity shares to its existing shareholders at the rate of 2 shares for every 5 shares held by them. If the right issue price is Rs. 180 per share and the market value is Rs. 200 per share, then the value of a right is

74.
Assertion (A): Inspite of a higher operating ratio the profitability tends to be lower.
Reason (R): Operating ratio shows a relationship between net operating profit and net sales.
Now, select the correct answer:

75.
Ram and Shyam are sharing profits in the ratio 3 : 2. They admit Mohan in the partnership and their new profit sharing ratio becomes 2 : 2 : 1. If Mohan brings `1,000 as goodwill then Shyam will get.

76.
In which Head, dividend received by Financial Enterprise is shown in the Cash Flow Statement?

77.
The basis of income Measurement is

79.
Given,

Net Profit after tax Rs. 3,25,000

Rate of Income tax 50%

12.5% convertible debentures of Rs. 100 each Rs. 4,00,000

Fixed assets (at cost) Rs. 12,30,000

Depreciation up-to-date Rs. 2,30,000

Current assets Rs. 7,50,000

Current liabilities Rs. 3,50,000

Return on Investment is

80.
A Trial Balance shows