Accountancy MCQs | Chapter-wise Multiple Choice Questions with Answers

Question #201

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Under GST, IGST revenue is:

A. Kept entirely by the Central Government

B. Deposited into the RBI reserves

C. Kept entirely by the State Government

D. Apportioned between the Central and the Destination State Government

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Correct Answer: Option D

Explanation:
Being a destination-based tax, IGST is collected by the Centre and shared with the destination state where the goods are consumed.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #202

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What is the maximum penalty for late filing of an Income Tax Return (ITR) under section 234F for a person with income above Rs 5 lakhs?

A. Rs 1,000

B. Rs 5,000

C. Rs 50,000

D. Rs 10,000

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Correct Answer: Option B

Explanation:
Currently, the maximum penalty under section 234F for delayed filing is Rs 5,000 (Rs 1,000 if total income is under 5 lakhs).

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Question #203

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Tax Deducted at Source (TDS) on rent of land/building under section 194I (exceeding Rs 2.4 lakhs p.a.) is at the rate of:

A. 5%

B. 2%

C. 1%

D. 10%

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Correct Answer: Option D

Explanation:
Under Section 194I of the Income Tax Act, TDS on rent for land and buildings is deducted at 10%.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #204

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The concept of 'Social Audit' gained mandatory prominence in India under which scheme?

A. Digital India

B. MGNREGA

C. Make in India

D. Swachh Bharat Abhiyan

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Correct Answer: Option B

Explanation:
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) legally mandated regular social audits by Gram Sabhas to monitor works.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #205

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CSR (Corporate Social Responsibility) is mandatory under the Companies Act 2013 for companies with a net profit of at least:

A. Rs 10 Crores

B. Rs 1 Crore

C. Rs 50 Crores

D. Rs 5 Crores

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Correct Answer: Option D

Explanation:
Section 135 mandates CSR for companies with Net Worth ≥ 500 Cr, Turnover ≥ 1000 Cr, or Net Profit ≥ 5 Cr.

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Question #206

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Which of the following describes 'Value Added' in social accounting?

A. Fixed Assets + Working Capital

B. Sales - Cost of bought-in materials and services

C. Gross Profit - Net Profit

D. Sales + Closing Stock

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Correct Answer: Option B

Explanation:
Value added represents the wealth created by the firm, calculated as sales revenue minus the cost of materials/services bought from outside.

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Question #207

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In Social Cost Benefit Analysis (SCBA), 'Shadow Pricing' is used to:

A. Calculate depreciation of intangibles

B. Hide illicit profits

C. Price products below cost to gain market share

D. Assign a true economic value to goods when market prices are distorted or non-existent

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Correct Answer: Option D

Explanation:
Shadow prices reflect the true opportunity cost of resources to society, used when market prices fail to reflect this true cost.

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Question #208

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A key challenge of Human Resource Accounting is:

A. Excessive software cost

B. Lack of standardized models to objectively value human capital

C. It is banned by Ind AS

D. It reduces taxable income

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Correct Answer: Option B

Explanation:
Valuing human beings as assets involves subjective assumptions about tenure, capability, and future value, lacking a universally accepted model.

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Question #209

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Under the Single Entry system, if additional capital introduced is Rs 20,000, Closing Capital is Rs 80,000, Opening Capital is Rs 50,000, and Drawings are Rs 15,000, what is the profit/loss?

A. Profit Rs 25,000

B. Profit Rs 65,000

C. Profit Rs 15,000

D. Loss Rs 5,000

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Correct Answer: Option A

Explanation:
Profit = Closing Cap (80k) + Drawings (15k) - Opening Cap (50k) - Additional Cap (20k) = 95k - 70k = Rs 25,000 Profit.

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Question #210

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When converting Single Entry to Double Entry, the Bills Receivable dishonored will be:

A. Debited to Cash A/c

B. Debited to Total Debtors A/c

C. Credited to Total Debtors A/c

D. Ignored

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Correct Answer: Option B

Explanation:
Dishonor of a bill reinstates the debtor's liability, thus the Total Debtors Account is debited to increase the balance.

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Question #211

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A system where accounting data is stored on remote servers accessed via the internet is termed as:

A. Manual Accounting

B. Social Accounting

C. Cloud Accounting

D. Forensic Accounting

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Correct Answer: Option C

Explanation:
Cloud accounting allows real-time multi-user access to financial data hosted securely on external servers rather than local hard drives.

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Question #212

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The use of 'Smart Contracts' in accounting is a direct result of development in:

A. Blockchain Technology

B. Cost Control

C. Double Entry System

D. PFMS

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Correct Answer: Option A

Explanation:
Smart contracts are self-executing contracts with terms written into lines of code, running on blockchain networks.

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Question #213

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Which accounting principle justifies treating a calculator as an expense rather than a fixed asset?

A. Materiality

B. Going Concern

C. Dual Aspect

D. Consistency

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Correct Answer: Option A

Explanation:
The Materiality principle states that trivial costs (like a calculator) should be expensed immediately rather than capitalized and depreciated, due to their immaterial impact.

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Question #214

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In the Trial Balance, a bank overdraft is shown in the:

A. Debit column

B. Adjustment column

C. Suspense column

D. Credit column

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Correct Answer: Option D

Explanation:
Bank overdraft is a liability, and all liabilities have a credit balance, thus appearing in the credit column of the trial balance.

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Question #215

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A firm sells goods at cost + 25%. What is the ratio of gross profit on sales?

A. 33.33%

B. 20%

C. 25%

D. 15%

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Correct Answer: Option B

Explanation:
If Cost is 100, Profit is 25, Sales is 125. Profit on Sales = (25/125) * 100 = 20%.

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Question #216

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While passing an opening entry, if the total of liabilities exceeds the total of assets, the difference is debited to:

A. Goodwill Account

B. General Reserve

C. Capital Account

D. Suspense Account

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Correct Answer: Option A

Explanation:
If a business is acquired and liabilities exceed assets paid for, the difference is treated as the value paid for the firm's Goodwill.

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Question #217

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Which document is prepared to inform the supplier that his account has been debited due to purchase returns?

A. Cash Memo

B. Invoice

C. Debit Note

D. Credit Note

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Correct Answer: Option C

Explanation:
A debit note is sent to the supplier indicating that their account has been debited (reduced) in our books due to returned goods.

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Question #218

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When analyzing financial statements, the 'Window Dressing' practice refers to:

A. Displaying financial results transparently

B. Manipulating accounts to show a better financial position than reality

C. Writing off bad debts

D. Repairing the office building

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Correct Answer: Option B

Explanation:
Window dressing involves accounting tricks (like delaying expense recording) to make financial statements look stronger to investors.

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Question #219

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Which budget estimates the amount of cash receipts and cash payments during the budget period?

A. Capital Budget

B. Production Budget

C. Sales Budget

D. Cash Budget

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Correct Answer: Option D

Explanation:
A cash budget forecasts the cash inflows and outflows to ensure the firm has adequate liquidity to operate.

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Question #220

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Under PFMS, the centralized system module that facilitates direct payment to beneficiaries is called:

A. SWIFT

B. DBT module

C. GSTN

D. E-Kuber

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Correct Answer: Option B

Explanation:
The Direct Benefit Transfer (DBT) module in PFMS directly routes welfare funds into the authenticated bank accounts of citizens.

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