MCQ on Accountancy Pdf

MCQ on Accounting with Answers Pdf

1. What is the original form of accounting______

A. Financial accounting

B. Cost accounting

C. Management accounting

D. None of these 

Answer: C

2. The following are the accounting subjects of the net assets of public institutions_________

A. Financial aid carry-over 

B. Non-financial subsidy carry-over 

C. business balance 

D. All of these 

Answer : D

3. Accounting provides data or information on_______

A.Income and cost for the managers

B. Financial conditions of the institutions

C. Company’s tax liability for a particular year

D. All the above

Answer: D

4. The accounting cycle starts with the:

A. preparation of ledger accounts

B. preparation of trial balance

 analysis of business 

C. transaction

D. preparation of adjusting entries

Answer: C

5. Among  the following items of the balance sheet, there are ( ) current liabilities. 

A. Advance payment 

B. Other payables  

C. Non-current liabilities due within one year 

D. All of these 

Answer: D

6. The principles that should be followed for cost division in product cost calculation are_________

A. Who benefits and who pays 

B. When to benefit and when to bear 

C. The burden of expenses is proportional to the degree of benefit 

D. All of these 

Answer: D

7. What is Bookkeeping________

A. Bookkeeping is a part of the accountancy process that deals solely with recording and classification of financial transactions of a business.

B. Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business and other organizations.

C. Both of these 

D. None of these 

Answer: C

8. In accounting/bookkeeping, the term posting refers to________

A. transfer of information from ledger to trial balance

B. transfer of entries from journal to ledger

C. preparation of financial statements from trial balance

D. none of the above

Answer: B

9. What is important objective accounting?

A. Accounting provides information on Cost and income for managers, 

B. Company’s tax liability for a particular year and Financial conditions of an institutions.

C. Both 

D. None of these 

Answer: C

10. What is the limitation of accounting__________

A. It never shows the market value of assets. 

B It gives unrealistic information. 

C. It ignores the qualitative elements. 

D. It ignores effect of price level changes.

E. All of these 

Answer: E

11. General rules that are used as a guide in accounting and as a basis of accounting practices are called:

A. Generally Accepted Accounting Practices

B. Basic Accounting Conventions

C. Accounting and Financing Principles

D. Accounting Principles

Answer: A

12. Accounting procedures and accounting practices should remain same from year to year under which of the following accounting principles:

A. Dual Aspect Principle

B. Materiality Principle

C. Timeliness Principle

D. Consistency Principle

Answer: D

13. Among the following items, the correct statement about the accounting treatment of turnover materials is______

A. Packages that are used multiple times should be amortized according to the number of times of use 

B. Low-value consumables with a small amount can be included in the cost at one time when they are used 

C. Income obtained from the sale of separately priced packaging along with the commodity should be included in other business income 

D. All of these 

Answer: D

14. Which of the following is true statement for computerised accounting system? 

a. the computer accounting system is based on the concept of database. 

b. Computer accounting system does not away with the concept of creating and maintaining journals, ledger etc.

A. Only a

B. Only b

C. Both a and b

D. None of the above

Answer: A

15. What is the main objective of accounting?

A. Keep track of company stocks

B. That the accounts reflect a true image of the company’s situation

C. Keep track of money in the company’s cash

D. Calculate the amount of sales in a given period

Answer: B

16. What is working capital equal to?

A. Fixed assets – Current assets

B. Fixed liabilities + Current liabilities

C. Current assets – Current liabilities

D. Fixed assets + Current assets

Answer: C

17. What is noted on the debit?

A. Increases in value of asset accounts

B. Decreases in value of asset accounts

C.  Increases in value of liability accounts

D. Increases in value of net worth accounts

Answer: A

18. What are the documents that are part of the annual accounts?

A. Trial balance, Profit and Loss Account, Annual Report, Statement of Changes in Equity and Statement of Cash Flows

B. Trial Balance, Balance Sheet, Annual Report, Statement of Changes in Equity and Statement of Cash Flows

C. Trial Balance, Balance Sheet, Profit and Loss Account, Statement of Changes in Equity and Statement of Cash Flows

D. Balance Sheet, Profit and Loss Account, Annual Report, Statement of Changes in Equity and Statement of Cash Flows

Answer: C


19. Among the following statements about the accounting treatment of long-term equity investment, there are ( ) which are incorrect. 

A. Long-term equity investments in subsidiaries should be accounted for using the equity method

B. When disposing of long-term equity investment, the provision for impairment that has been accrued should be carried forward 

C. Under the cost method, the investment income is recognized according to the share of the investee’s net profit. 

D. Both A and C

Answer: D

20. Among the following statements about the characteristics of accounting in administrative institutions, the correct ones are_______

A. Accounting objectives focus on meeting the needs of budget management 

B. The basis of accounting is mainly based on the cash-based payment system 

C. The accounting statements are relatively simple, mainly including the balance sheet and the income and expenditure statement  

D. All of these 

Answer: D

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