Accountancy and Book Keeping MCQs

Accountancy and Statistics

Accountancy and Book Keeping MCQs

Practice the latest Accountancy MCQs with answers and detailed explanations. Explore chapter-wise multiple-choice questions covering important accounting concepts, bookkeeping, financial statements, journal entries, ledger, trial balance, depreciation, ratio analysis, partnership accounts, company accounts, and more. Perfect for Class 11 & 12, B.Com, CA Foundation, CUET, Banking, SSC, JKSSB, JKPSC and competitive exams.

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Page 14 of 94
Question #261
A firm has an Operating Cycle of 15 months. A liability payable in 14 months will be classified as:
A. Non-Current Liability
B. Current Liability
C. Contingent Liability
D. Deferred Tax Liability
Discuss
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Correct Answer: Option B

Explanation:
According to Schedule III, a liability is current if it is due within 12 months OR within the entity's normal operating cycle (15 months here).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #262
The primary body that formulates Indian Accounting Standards (Ind AS) is the:
A. Reserve Bank of India (RBI)
B. Securities and Exchange Board of India (SEBI)
C. Institute of Chartered Accountants of India (ICAI)
D. Ministry of Finance
Discuss
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Correct Answer: Option C

Explanation:
The Accounting Standards Board (ASB) constituted by ICAI formulates the accounting standards, which are then notified by the Ministry of Corporate Affairs.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #263
Under GST, what does HSN stand for?
A. Harmonized Service Number
B. Home State Number
C. Highly Sensitive Network
D. Harmonized System of Nomenclature
Discuss
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Correct Answer: Option D

Explanation:
HSN is an internationally accepted system of naming, classifying, and coding goods, widely used for calculating GST and Customs duties.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #264
If a transaction involves payment of Rs 10,000 for purchasing a machine, what type of voucher is prepared?
A. Credit Voucher
B. Debit Voucher (Cash Payment Voucher)
C. Transfer Voucher
D. Journal Voucher
Discuss
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Correct Answer: Option B

Explanation:
A debit voucher is prepared for all cash payments, supporting the outflow of cash for expenses, assets, or creditors.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #265
Which branch of accounting focuses on historical data to present the financial position to external users?
A. Management Accounting
B. Responsibility Accounting
C. Financial Accounting
D. Cost Accounting
Discuss
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Correct Answer: Option C

Explanation:
Financial accounting records past events to prepare statements like P&L and Balance Sheet for external stakeholders (investors, creditors, government).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #266
The term 'Marshalling' in the context of a Balance Sheet means:
A. Arranging assets and liabilities in a specific order of liquidity or permanence
B. Writing off bad debts
C. Totaling the assets and liabilities
D. Transferring net profit to capital
Discuss
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Correct Answer: Option A

Explanation:
Marshalling refers to the logical sequencing of assets and liabilities to make the balance sheet easily readable and analytical.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #267
The time value of money concept is a core element in which financial management decision?
A. Capital Budgeting
B. Inventory Valuation
C. Ratio Analysis
D. Working Capital Management
Discuss
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Correct Answer: Option A

Explanation:
Capital budgeting techniques like Net Present Value (NPV) discount future cash flows, fundamentally relying on the time value of money.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #268
In the absence of an agreement, what is the profit-sharing ratio among partners?
A. Time devoted to business
B. As decided by the senior partner
C. Capital Ratio
D. Equal
Discuss
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Correct Answer: Option D

Explanation:
Under the Indian Partnership Act, 1932, if the deed is silent, all partners share profits and losses equally.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #269
Which of the following is an example of an 'Error of Commission'?
A. Failing to record a transaction entirely
B. Entering Rs 4,500 instead of Rs 5,400 in an account
C. Recording a machinery purchase in the Purchases Account
D. Two errors cancelling each other out
Discuss
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Correct Answer: Option B

Explanation:
An error of commission involves incorrect casting, posting, or carry-forward, such as writing the wrong numerical amount.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #270
A petty cashier is given Rs 2,000 as float. He spends Rs 1,750 during the month. Under the imprest system, how much will he receive at the start of the next month?
A. Rs 1,750
B. Rs 250
C. Rs 3,750
D. Rs 2,000
Discuss
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Correct Answer: Option A

Explanation:
Reimbursement equals the exact amount spent (Rs 1,750) so the float is restored back to the imprest limit of Rs 2,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #271
In a BRS, when a cheque is issued but not presented, the cash book balance is:
A. Higher than the pass book balance
B. Unaffected
C. Equal to the pass book balance
D. Lower than the pass book balance
Discuss
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Correct Answer: Option D

Explanation:
Issuing a cheque immediately reduces the cash book balance, but the bank balance (pass book) remains high until the cheque is cleared.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #272
The formula 'Fixed Cost / Contribution Margin per Unit' is used to find:
A. Break-Even Point in Sales Value
B. Margin of Safety
C. Target Profit
D. Break-Even Point in Units
Discuss
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Correct Answer: Option D

Explanation:
This formula yields the exact number of units a company needs to sell to cover all its fixed and variable costs.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #273
The Income Tax Act defines 'Assessment Year' as the period of 12 months commencing on:
A. Diwali every year
B. 1st April every year
C. Date of incorporation of the company
D. 1st January every year
Discuss
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Correct Answer: Option B

Explanation:
The Assessment Year in India is a uniform 12-month period beginning on the 1st of April and ending on the 31st of March.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #274
GST Council decisions are taken by a majority of not less than:
A. Three-fourths of the weighted votes
B. Unanimous vote
C. Simple majority
D. Two-thirds of the weighted votes
Discuss
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Correct Answer: Option A

Explanation:
Article 279A dictates that every decision of the GST Council must be supported by a minimum of 75% (three-fourths) weighted majority of the members present and voting.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #275
In Social Accounting, which of the following is considered an internal stakeholder?
A. Employees
B. Government
C. Local Community
D. Environmental Agencies
Discuss
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Correct Answer: Option A

Explanation:
Employees work within the organization and are directly involved in its operations, classifying them as internal stakeholders.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #276
The process of critically reviewing a company's budget to justify every cost as if the activity is being undertaken for the first time is called:
A. Zero-Based Budgeting
B. Performance Budgeting
C. Flexible Budgeting
D. Master Budgeting
Discuss
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Correct Answer: Option A

Explanation:
Zero-Based Budgeting mandates that no budget base is carried forward automatically; everything must be justified from ground zero.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #277
An amount of Rs 5,000 received from Mohan was incorrectly credited to Sohan's account. This is an example of:
A. Compensating Error
B. Error of Principle
C. Error of Commission
D. Error of Omission
Discuss
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Correct Answer: Option C

Explanation:
Posting to the correct side but the wrong personal account is a clerical mistake classified as an error of commission.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #278
Interest on capital allowed to a partner is debited to:
A. Partner's Capital Account
B. Profit & Loss Appropriation Account
C. Suspense Account
D. Interest Account
Discuss
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Correct Answer: Option B

Explanation:
Interest on capital is an appropriation of profit, thus debited to the P&L Appropriation Account and credited to the Partner's Capital Account.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #279
For calculating the Current Ratio, which of the following is excluded from Current Assets?
A. Cash at Bank
B. Loose Tools
C. Sundry Debtors
D. Prepaid Expenses
Discuss
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Correct Answer: Option B

Explanation:
Loose tools and spares are generally excluded from current assets while calculating liquidity ratios because they cannot be easily converted into cash to pay off liabilities.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #280
Under PFMS, the hierarchy of fund flow tracking ensures that funds meant for a village panchayat can be monitored by:
A. Only the state government
B. The central ministries, state departments, and executing agencies simultaneously
C. The World Bank
D. Only the village sarpanch
Discuss
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Correct Answer: Option B

Explanation:
PFMS is a web-based tracking system that provides end-to-end visibility of fund flow, accessible across all levels of government hierarchy.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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