MCQOPTIONS
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MCQOPTIONS
This section includes 466 Mcqs, each offering curated multiple-choice questions to sharpen your Commerce knowledge and support exam preparation. Choose a topic below to get started.
| 401. |
Which of the following is true when a debtor pays his dues? |
| A. | The asset side of the balance sheet will decrease |
| B. | The asset side of the balance sheet will increase |
| C. | The liability side of the balance sheet will increase |
| D. | There is no change in total assets or total liabilities |
| Answer» E. | |
| 402. |
Errors are _____ mistakes |
| A. | Intentional |
| B. | Undetected |
| C. | Unintentional |
| D. | None of the above |
| Answer» D. None of the above | |
| 403. |
Identify the correct sequence of accounting process |
| A. | Communicating -> Recording -> Identifying |
| B. | Recording -> Communicating -> Identifying |
| C. | Identifying -> Communicating -> Recording |
| D. | Identifying -> Recording -> Communicating |
| Answer» E. | |
| 404. |
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 |
| Answer» E. | |
| 405. |
An asset must be ________ by the business to be shown as an asset in its balance sheet. |
| A. | Possessed |
| B. | Owned |
| C. | Controlled |
| D. | Used |
| Answer» D. Used | |
| 406. |
________ is the first phase of accounting cycle |
| A. | Identifying an economic event or transaction |
| B. | Preparing Journal |
| C. | Posting entries to Ledger accounts |
| D. | Making decisions about business |
| Answer» B. Preparing Journal | |
| 407. |
The following is (are) the type(s) of Journal |
| A. | Purchase Journal |
| B. | Sales Journal |
| C. | Cash Journal |
| D. | All of the above |
| Answer» E. | |
| 408. |
The sales income (Credit and Cash) of a business during a given period is called |
| A. | Transactions |
| B. | Sales Returns |
| C. | Turnover |
| D. | Purchase Returns |
| Answer» D. Purchase Returns | |
| 409. |
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 |
| Answer» B. Current assets + Stock + Work in progress | |
| 410. |
Balance sheets are prepared |
| A. | Daily |
| B. | Weekly |
| C. | Monthly |
| D. | Annually |
| Answer» E. | |
| 411. |
Which of the following accounts can be classified as a real account? |
| A. | Rent expenses account |
| B. | Rent income account |
| C. | Insurance expenses account |
| D. | Cash account |
| Answer» E. | |
| 412. |
Which of the following accounting equation is correct? |
| A. | Cash + Other assets = Capital - Liabilities |
| B. | Capital + Liabilities = Assets + Income |
| C. | Assets - Liabilities = Capital |
| D. | Assets + Capital = Liabilities |
| Answer» D. Assets + Capital = Liabilities | |
| 413. |
Identify the asset from the following |
| A. | Cash and cash equivalent |
| B. | Creditors |
| C. | Notes payable |
| D. | Bank loan |
| Answer» B. Creditors | |
| 414. |
The process of recording transactions in different journals is called |
| A. | Posting |
| B. | Entry making |
| C. | Adjusting |
| D. | Journalising |
| Answer» E. | |
| 415. |
Goods returned by customer should be debited to which of the following accounts? |
| A. | Sales income account |
| B. | Sales account |
| C. | Return inward account |
| D. | Expenses account |
| Answer» D. Expenses account | |
| 416. |
Which of the following is not a transaction? |
| A. | Goods are purchased on cash basis for Rs.1000 |
| B. | Salaries are paid for the month of May 2010 |
| C. | Land is purchased for Rs. 10 lacs |
| D. | An employee dismissed from the job |
| Answer» E. | |
| 417. |
A minimum quantity of stock always held as precaution against out of stock situation is called |
| A. | Zero stock |
| B. | Risk stock |
| C. | Base stock |
| D. | None of the above |
| Answer» D. None of the above | |
| 418. |
Interest on drawings is ___ for the business |
| A. | Loss |
| B. | Expense |
| C. | Gain |
| D. | None of the above |
| Answer» D. None of the above | |
| 419. |
Accrued expenses are considered as |
| A. | Asset |
| B. | Liability |
| C. | Gain |
| D. | Income |
| Answer» C. Gain | |
| 420. |
Bank Reconciliation statement is the comparision of a bank statement (sent by bank) with the |
| A. | Cash receipt journal |
| B. | Cash payment journal |
| C. | Cash book |
| D. | Financial statements |
| Answer» D. Financial statements | |
| 421. |
Postage stamps on hand are considered as |
| A. | Bank balance |
| B. | Prepaid expenses |
| C. | Accounts receivable |
| D. | Creditors |
| Answer» C. Accounts receivable | |
| 422. |
Introduction of capital by owner of business is recorded on which side of a cash book? |
| A. | Receipts |
| B. | Payments |
| C. | Incomes |
| D. | Expenditures |
| Answer» B. Payments | |
| 423. |
Cash discount is allowed on ______ repayment of debt |
| A. | Lump sum |
| B. | Prompt |
| C. | Actual |
| D. | None of them |
| Answer» C. Actual | |
| 424. |
The term _______ is generally used for the depreciation of natural resources |
| A. | Amortization |
| B. | Depletion |
| C. | Appreciation |
| D. | Disposal value |
| Answer» C. Appreciation | |
| 425. |
NRV or net realizable value of inventory is the expected selling price or market value less |
| A. | Carry value of the inventory |
| B. | Expenses necessary to complete sale |
| C. | Cost of the stock |
| D. | Replacement cost |
| Answer» C. Cost of the stock | |
| 426. |
Provision for doubtful debts account is a/an |
| A. | Asset account |
| B. | Contra asset account |
| C. | Nominal account |
| D. | Liability account |
| Answer» C. Nominal account | |
| 427. |
A recovery of bad debt |
| A. | increases net income |
| B. | decreases net income |
| C. | increases gross profit |
| D. | increases gross profit and net income |
| Answer» B. decreases net income | |
| 428. |
Current assets are also known as |
| A. | Gross working capital |
| B. | Invested capital |
| C. | Assets |
| D. | Cash |
| Answer» B. Invested capital | |
| 429. |
Which of the following financial reports shows the profitability of a business? |
| A. | Income statement |
| B. | Balance sheet |
| C. | Cash flow statement |
| D. | Statement of changes in equity |
| Answer» B. Balance sheet | |
| 430. |
In income statement, gross profit is always equal to |
| A. | Sales - expenses |
| B. | Income - expenses |
| C. | Sales - cost of goods sold |
| D. | Sales - selling costs |
| Answer» D. Sales - selling costs | |
| 431. |
XYZ firm has imported a machine from abroad. Which of the following is NOT the element of the machine's cost? |
| A. | Purchase price of machine |
| B. | Import duty |
| C. | Demmurage charges |
| D. | Refundable tax |
| Answer» E. | |
| 432. |
Exercising a degree of caution in the case of judgements needed under the condition of uncertainity is the assumption of which of the following accounting concepts? |
| A. | Matching concept |
| B. | Timeliness concept |
| C. | Accrual concept |
| D. | Prudence concept |
| Answer» E. | |
| 433. |
The allocation of owner's private expenses to his/her business violates which of the following? |
| A. | Accrual concept |
| B. | Matching concept |
| C. | Separate business entity concept |
| D. | Consistency concept |
| Answer» D. Consistency concept | |
| 434. |
Accounting provides information on |
| A. | Cost and income for managers |
| B. | Company's tax liability for a particular year |
| C. | Financial conditions of an institutions |
| D. | All of the above |
| Answer» E. | |
| 435. |
Liability for bill discounted is a |
| A. | Contingent liability |
| B. | Fixed liability |
| C. | Current liability |
| D. | None of the above |
| Answer» B. Fixed liability | |
| 436. |
Which reserve is not shown in the Balance sheet? |
| A. | Secret reserve |
| B. | General reserve |
| C. | Capital reserve |
| D. | All of the above |
| Answer» B. General reserve | |
| 437. |
Which of the following is a long term liability? |
| A. | Outstanding expenses |
| B. | Share capital |
| C. | Debentures |
| D. | All of the above |
| Answer» D. All of the above | |
| 438. |
The assumption underlying the fixed installment method of depreciation is that of ____ of the asset over its useful life |
| A. | Equal usage |
| B. | Usage |
| C. | Charge |
| D. | None of the above |
| Answer» B. Usage | |
| 439. |
Noting charges are paid at the time of |
| A. | Renewal of the bill |
| B. | Retirement of the bill |
| C. | Dishonor of the bill |
| D. | None of the above |
| Answer» D. None of the above | |
| 440. |
Capital expenditures are recorded in the |
| A. | Trading account |
| B. | Profit & Loss account |
| C. | Balance sheet |
| D. | All of the above |
| Answer» D. All of the above | |
| 441. |
No journal entry is required to be passed when there is |
| A. | Loss by theft |
| B. | Normal loss |
| C. | Loss of bad debts |
| D. | Abnormal loss of business |
| Answer» C. Loss of bad debts | |
| 442. |
Which of the following sets of expense are the direct expense of business? |
| A. | Wages, Carriage Inward, Octroi |
| B. | Postage, Wages, Carriage Inward |
| C. | Purchases, Wages, Coal Expenses |
| D. | Both 'a' and 'c' |
| Answer» E. | |
| 443. |
Opening and closing inventories are recorded in |
| A. | Journal proper |
| B. | Purchase book |
| C. | Sales book |
| D. | Bill receivable book |
| Answer» B. Purchase book | |
| 444. |
Contra-entries are passed only when |
| A. | Double column cash book is prepared |
| B. | Three column cash book is prepared |
| C. | Simple cash book is prepared |
| D. | None of the above |
| Answer» B. Three column cash book is prepared | |
| 445. |
Memorandum Joint Venture account is a |
| A. | Personal account |
| B. | Real account |
| C. | Nominal account |
| D. | None of the above |
| Answer» D. None of the above | |
| 446. |
Amortization of unidentified intangible assets is in terms of |
| A. | Conservatism concept |
| B. | Materiality concept |
| C. | Matching concept |
| D. | Cost concept |
| Answer» D. Cost concept | |
| 447. |
Purchase of fixed assets on credit is originally recorded in |
| A. | Purchases book |
| B. | Ledger |
| C. | Cash book |
| D. | Journal Proper |
| Answer» E. | |
| 448. |
The concept that "an accountant shouldn't anticipate profit, but must provide for all losses" |
| A. | Conservation concept |
| B. | Consistency concept |
| C. | Materiality concept |
| D. | Reduction concept |
| Answer» B. Consistency concept | |
| 449. |
When the goods are returned to a supplier |
| A. | A Debit note is sent to him |
| B. | An Account sale is sent to him |
| C. | A receipt is sent to him |
| D. | Either 'b' or 'c' |
| Answer» B. An Account sale is sent to him | |
| 450. |
Error which affect only one account can be |
| A. | Error of complete omission |
| B. | Error of posting |
| C. | Compensatory errors |
| D. | None of the above |
| Answer» C. Compensatory errors | |