MCQs of Accounts

1.It is essential to standardize the accounting principles and policies in order to ensure

a) Transparency

b) Consistency

c) Comparability

d) All of the above

2.Financial statement only consider

a) Assets expressed in monetary terms

b) Liabilities expressed in monetary terms

c) Assets expressed in non monetary terms

d) Assets & liabilities expressed in monetary terms

3."Which financial statement represents the accounting equation, assets =Liabilities + Owner s equity"

a) Income Statement

b) Statement of Cash flows

c) Balance Sheet

d) None of the above

4.Economic life of an enterprise is split into the periodic interval as per which concept

a) Money Measurement

b) Going concern

c) Accrual.

d) Matching

5.Drawing account is in the nature of?

a) Personal account

b) Real account

c) Minimal account

d) None of the above

6.Profit leads to increase in

a) Assets

b) Capital

c) 1 & 2 both

d) All of the above

7."If an individual asset is increased, there will be a corresponding"

a) Increase of another asset or increase of capital

b) Decrease of another asset or increase of liability

c) Decrease of specific liability or decrease of capital

d) Increased of drawings and liability

8.Which of the following is not fundamental accounting assumption

a) Consistency

b) Going concern

c) Accrual.

d) None of the above

9."If you start with be cash book deposit balance in a bank reconciliation statement, Which item/items will you add "

a) Cheques issued but not yet presented for payment

b) Accounts directly deposited by a customer into hank

c) Interest allowed by the bank

d) All of the above

10.Which of the following is not a part of inventory?

a) Finished goods

b) "Raw material components, consumables and supplies"

c) Spare parts of Plant and Machinery

d) Work- in-Progress

11.Which of the cost is not considered as a cost of inventory?

a) Purchases Cost

b) Freight Inward

c) Interest cost

d) Production cost

12.Profit volume ratio can be calculated:

a) Sales/Profit X100

b) Profit/Sales X 100

c) contribution/Sales X100

d) Variable cost/Fixed cost X100

13.At break even point fixed cost equal to

a) Profit

b) variable cost

c) sales

d) Contribution

14.Margin of safety is

a) sales- cost

b) Sales - total cost

c) Fixed cost + variable cost

d) Sales - Break even sales

15.Break even point is point where

a) Fixed = to variable cost

b) variable cost = to sales

c) sales= total cost

d) All of the above

16.Where units are identified then which method of inventory valuation is better

a) FIFO

b) LIFO

c) Weighted average method

d) none of the above

17.In case of transport company which method of costing is better

a) Unit costing

b) Process costing

c) Operating costing

d) Job costing

18."If profit is 1,00,000 and Profit volume ratio is 40% then what will be margin of safety: "

a) 250000

b) 40000

c) 2500

d) 400

19."Direct material , Direct labour and direct expenses combinedly called "

a) Factory cost

b) Office cost

c) Total cost

d) Prime cost

20.In ABC analysis of inventory the value Category A is

a) Highest

b) Lowest

c) Medium

d) none of the above

21.Variable cost means?

a) The cost which remain fixed in total

b) The cost which remain fixed per unit

c) The cost which may fixed or vary

d) All of the above

22.If share are issued over and above the face value this excessive portion is called

a) Share capital

b) Discount

c) Security Premium

d) None of the above

23.Maximum period of issue of debenture in years

a) 10

b) 5

c) 20

d) 15

24.Purchase of building is which types of expenditure

a) Capital

b) Revenue

c) deferred Revenue

d) None of the above

25.Which of the following is method applied on toy factory

a) Process costing

b) Operating costing

c) Unit costing

d) None of the above

26.Budgets are prepared on the basis of

a) past experience

b) Further experience

c) None of the above

d) All of the above

27.Break even point is the point where

a) Sales is equal to fixed cost

b) Sales equal to total cost

c) Fixed cost + variable cost

d) None of the above

28.Debit are all

a) Assets

b) expenses

c) Losses

d) All of the above

29.Revenue Minus expenditure equal to

a) Total cost

b) Total sales

c) Total Turnover

d) None of the above

30.Cash equivalent includes

a) Marketable security

b) Inventory

c) Building

d) All of the above

31.Dividend Received is part of which activity of cash flow statement

a) Operating

b) Investing

c) Financing

d) None of the above

32.Share issue for purchase of building is

a) Inflow of cash

b) Out flow

c) in and out flow both

d) No flow cash

33.Payment of Income tax is which type of activity

a) Operating

b) Financing

c) Investing

d) None of the above

34.Which Accounting standard is apply on Cash flow statement

a) 2

b) 6

c) 3

d) 9

35.Which Accounting standard is apply on Fixed Assets

a) 9

b) 11

c) 15

d) 10

36.When the revenue should be recognised

a) Goods sold

b) Cash received

c) Risk and reward of goods has been transferred

d) None of the above

37.Which of the following method of depreciation provide lower amount

a) Straight line method

b) Written down method

c) None of the above

d) All of the above

38.On which of the following assets no depreciation is charged

a) Inventory

b) Land

c) Live stock

d) All of the above

39.Sales book is

a) Principal book

b) Subsidiary book

c) Journal proper

d) None of the above

40.Which of the following calculate the actual cost of product?

a) Cost estimation

b) Costing

c) Both a and b

d) None of these