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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Practice Questions

Page 17 of 94
Question #321
Ind AS 116 deals with:
A. Income Taxes
B. Financial Instruments
C. Leases
D. Revenue from Contracts
Discuss
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Correct Answer: Option C

Explanation:
Ind AS 116, corresponding to IFRS 16, sets out principles for recognition, measurement, presentation, and disclosure of leases.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #322
Which of the following is not a subfield of accounting?
A. Social Science Accounting
B. Management Accounting
C. Tax Accounting
D. Financial Accounting
Discuss
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Correct Answer: Option A

Explanation:
Common subfields include financial, cost, management, tax, social responsibility accounting. Social Science Accounting is not a recognized subfield.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #323
The accounting equation for a business on a particular date: Assets ₹5,00,000; Liabilities ₹2,00,000. Capital will be:
A. ₹3,00,000
B. ₹7,00,000
C. ₹2,00,000
D. ₹5,00,000
Discuss
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Correct Answer: Option A

Explanation:
Capital = Assets - Liabilities = ₹5,00,000 - ₹2,00,000 = ₹3,00,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #324
A trader paid carriage on purchase of goods. It will be debited to:
A. Trading A/c (Direct expense)
B. Carriage Inward A/c
C. Profit & Loss A/c
D. Carriage Outward A/c
Discuss
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Correct Answer: Option B

Explanation:
Carriage paid on purchases is a direct expense, debited to Carriage Inward A/c, and later transferred to Trading A/c.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #325
Which voucher is used for recording cash sales?
A. Journal voucher
B. Debit voucher
C. Credit voucher
D. Cash voucher
Discuss
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Correct Answer: Option D

Explanation:
Cash sales involve receipt of cash, so a cash voucher (receipt voucher) is prepared.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #326
A bank reconciliation statement is prepared to reconcile the difference between:
A. Cash book and petty cash book
B. Cash book (bank column) and pass book
C. Cash book and sales book
D. Pass book and purchase book
Discuss
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Correct Answer: Option B

Explanation:
BRS reconciles the bank balance as per cash book (bank column) with the balance as per bank statement (pass book).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #327
An unrecorded bank charge for ₹150 will be treated in BRS starting with Cash Book balance (Dr.):
A. No adjustment
B. Added twice
C. Deducted ₹150
D. Added ₹150
Discuss
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Correct Answer: Option C

Explanation:
Bank charges have been debited by bank in passbook, reducing the balance, but not recorded in cash book. To reconcile from cash book to passbook, we deduct the charges.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #328
In the financial statements of a sole trader, drawings are deducted from:
A. Sales
B. Capital
C. Net profit
D. Gross profit
Discuss
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Correct Answer: Option B

Explanation:
Drawings are not an expense; they reduce the owner's capital directly in the balance sheet.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #329
Which ratio measures the profitability of a business relative to shareholders' funds?
A. Net profit ratio
B. Gross profit ratio
C. Current ratio
D. Return on equity (ROE)
Discuss
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Correct Answer: Option D

Explanation:
ROE = Net Profit / Shareholders' Equity. It measures how effectively management is using equity to generate profit.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #330
When a new partner brings in capital for his share of goodwill in cash, the journal entry is:
A. Cash A/c Dr. To Partner's Capital A/c
B. Cash A/c Dr. To Goodwill A/c
C. Cash A/c Dr. To Premium for Goodwill A/c
D. Premium for Goodwill A/c Dr. To Cash A/c
Discuss
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Correct Answer: Option C

Explanation:
If the incoming partner pays for goodwill privately or through firm, if paid to firm, entry is Cash Dr. To Premium for Goodwill A/c.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #331
A ledger is primarily a book of:
A. Final entry only
B. Original entry
C. Secondary entry
D. Memorandum entry
Discuss
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Correct Answer: Option C

Explanation:
Ledger is a book of secondary entry where transactions are posted from journal or subsidiary books.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #332
Petty Cash Book is maintained under:
A. Imprest system
B. Mercantile system
C. Cash basis only
D. Single entry system
Discuss
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Correct Answer: Option A

Explanation:
Petty cash is often maintained on imprest system, where a fixed amount is kept for small expenses and replenished periodically.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #333
The term 'Audit' originates from the Latin word:
A. Audito
B. Auditas
C. Audire
D. Auditare
Discuss
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Correct Answer: Option C

Explanation:
The word 'audit' comes from the Latin 'audire' meaning 'to hear'.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #334
A Trial Balance will not disclose which error?
A. Error of casting
B. Wrong totaling of subsidiary book
C. Compensating errors
D. Omission to post one side of an entry
Discuss
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Correct Answer: Option C

Explanation:
Compensating errors cancel each other's effect on trial balance totals, so the trial balance still agrees. Errors of casting, posting one side, wrong totaling will cause disagreement.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #335
Which of the following is not a type of error?
A. Error of principle
B. Error of commission
C. Error of omission
D. Error of interpretation
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Correct Answer: Option D

Explanation:
Common errors in accounting are error of principle, omission, commission, and compensating error. Error of interpretation is not a standard classification.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #336
Closing stock appearing outside the trial balance is shown in:
A. Trading A/c debit side and Balance Sheet liability side
B. Profit & Loss A/c only
C. Only in Balance Sheet
D. Trading A/c credit side and Balance Sheet asset side
Discuss
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Correct Answer: Option D

Explanation:
Closing stock is shown in Trading A/c (credit side) by way of deduction from purchases and on asset side of Balance Sheet.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #337
Gross profit is transferred to:
A. Balance Sheet
B. Trading A/c
C. Capital A/c
D. Profit & Loss A/c (credit side)
Discuss
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Correct Answer: Option D

Explanation:
Gross profit from Trading A/c is transferred to the credit side of Profit & Loss A/c.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #338
Outstanding expenses in the balance sheet are shown under:
A. Current liabilities
B. Contingent liabilities
C. Fixed liabilities
D. Current assets
Discuss
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Correct Answer: Option A

Explanation:
Outstanding expenses represent amounts payable within a short period, classified as current liabilities.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #339
Which system of accounting recognizes income when it is earned irrespective of receipt?
A. Accrual system
B. Hybrid system
C. Cash system
D. Single entry system
Discuss
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Correct Answer: Option A

Explanation:
Accrual basis records revenues when earned and expenses when incurred, not when cash is received or paid.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #340
Social Accounting in India is mostly used by:
A. Small traders
B. Public sector enterprises
C. Manufacturing companies
D. Households
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Correct Answer: Option B

Explanation:
Public sector enterprises and large corporations often prepare social accounting statements to show their contribution to social objectives.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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