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 18 of 94
Question #341
A social audit report is:
A. Voluntary or mandated by specific statutes like Mahatma Gandhi NREGA
B. Part of tax audit
C. Legally mandatory for all companies
D. Conducted by the Comptroller and Auditor General only
Discuss
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Correct Answer: Option A

Explanation:
Social audit is mandated for certain government schemes (e.g., MGNREGA) and may be voluntary for others. It is not universally mandatory for all companies.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #342
Under single entry system, opening capital is ascertained by preparing:
A. Income and expenditure account
B. Trading account
C. Profit and loss account
D. Statement of affairs
Discuss
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Correct Answer: Option D

Explanation:
In single entry, a statement of affairs (similar to balance sheet) is prepared to ascertain opening and closing capital.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #343
PFMS is implemented by which ministry?
A. Ministry of Home Affairs
B. Ministry of Finance
C. Ministry of Commerce
D. Ministry of Corporate Affairs
Discuss
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Correct Answer: Option B

Explanation:
PFMS (Public Financial Management System) is under the Office of the Controller General of Accounts, Ministry of Finance.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #344
The Indian Financial Management System for government accounting follows which method?
A. Accrual basis only
B. Hybrid basis
C. Mercantile basis
D. Cash basis
Discuss
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Correct Answer: Option D

Explanation:
Government accounting in India is primarily on cash basis, though there are moves towards accrual basis.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #345
GST is a comprehensive indirect tax levied on:
A. Manufacture of goods only
B. Sale of services only
C. Supply of goods and services
D. Import of capital goods only
Discuss
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Correct Answer: Option C

Explanation:
GST is a destination-based tax on supply of goods and services, replacing multiple indirect taxes.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #346
The maximum rate of income tax (excluding surcharge and cess) for individuals in India as per recent budget is:
A. 25%
B. 40%
C. 30%
D. 35%
Discuss
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Correct Answer: Option C

Explanation:
As per current income tax slabs, the highest marginal rate for individuals (old regime) is 30%. Under new regime, surcharge may increase effective rate but base rate is still 30% up to certain limit. The question asks maximum rate excluding surcharge, so 30%.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #347
Which of the following is not a direct tax?
A. Corporate tax
B. Securities Transaction Tax
C. Customs duty
D. Minimum Alternate Tax
Discuss
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Correct Answer: Option C

Explanation:
Customs duty is an indirect tax. Corporate tax, STT, MAT are direct taxes.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #348
Budgetary control system involves:
A. Comparing actual figures with budgeted figures
B. Only preparing cash budget
C. Fixing selling price
D. Setting long-term objectives
Discuss
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Correct Answer: Option A

Explanation:
Budgetary control is the establishment of budgets relating to responsibilities of executives to the requirements of a policy and the continuous comparison of actual with budgeted results.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #349
The break-even point is the point where:
A. Total cost equals total revenue
B. Profit is maximum
C. Loss is maximum
D. Total variable cost equals fixed cost
Discuss
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Correct Answer: Option A

Explanation:
At break-even point, there is no profit or loss; total revenue equals total costs.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #350
Which of the following is an example of a fixed cost?
A. Factory rent
B. Carriage outward
C. Direct labour (piece rate)
D. Direct material
Discuss
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Correct Answer: Option A

Explanation:
Factory rent remains constant irrespective of production volume, hence fixed cost.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #351
In cost accounting, prime cost is:
A. Direct material + Direct labour + Direct expenses
B. Direct material + Direct labour + Factory overheads
C. All manufacturing costs
D. Administration overheads
Discuss
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Correct Answer: Option A

Explanation:
Prime cost is the sum of all direct costs: direct material, direct labour, and direct expenses.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #352
Recent developments in accounting include the increased use of:
A. Manual voucher posting
B. Single entry only
C. Paper-based ledgers
D. Cloud accounting and AI
Discuss
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Correct Answer: Option D

Explanation:
Technological advancements like cloud accounting, artificial intelligence, and blockchain are recent trends.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #353
The maximum number of partners allowed in a partnership firm (as per Companies Act, 2013) is:
A. 50
B. 10
C. 20
D. 100
Discuss
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Correct Answer: Option A

Explanation:
As per Section 464 of Companies Act 2013, maximum number of partners can be 50, unless otherwise prescribed. The earlier limit of 20 for non-banking and 10 for banking has been raised to 50 for all firms.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #354
A partner who lends money to the firm is entitled to:
A. Bonus
B. Salary
C. Share of profit
D. Interest on loan at 6% p.a.
Discuss
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Correct Answer: Option D

Explanation:
In absence of agreement, a partner is entitled to interest on loan advanced to the firm at 6% per annum as per Partnership Act, 1932.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #355
The Profit and Loss Appropriation Account is prepared:
A. Before preparing Trading Account
B. Only in case of losses
C. Instead of Profit & Loss Account
D. After preparing Profit & Loss Account
Discuss
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Correct Answer: Option D

Explanation:
P&L Appropriation Account is prepared after the Profit & Loss Account to distribute the net profit among partners.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #356
Which of the following is not a feature of a partnership?
A. Separate legal entity
B. Unlimited liability
C. Sharing of profits
D. Agreement between partners
Discuss
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Correct Answer: Option A

Explanation:
A partnership firm does not have a separate legal entity distinct from its partners (except limited liability partnerships).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #357
In the absence of a partnership deed, interest on partners' capital is allowed at:
A. 5% p.a.
B. 12% p.a.
C. 6% p.a.
D. No interest
Discuss
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Correct Answer: Option D

Explanation:
According to the Indian Partnership Act, no interest on capital is allowed unless there is an agreement.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #358
A newly admitted partner acquires his share of profit from:
A. The firm directly
B. Profit and loss account
C. Old partners by way of sacrifice
D. Outside parties
Discuss
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Correct Answer: Option C

Explanation:
A new partner's share comes from the old partners who sacrifice a portion of their profit share.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #359
Goodwill brought in by a new partner in cash is distributed among old partners in:
A. Equal ratio
B. New profit-sharing ratio
C. Old profit-sharing ratio
D. Sacrificing ratio
Discuss
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Correct Answer: Option D

Explanation:
The premium for goodwill brought by incoming partner is distributed to old partners in their sacrificing ratio.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #360
A debit note is prepared for:
A. Credit purchases
B. Purchase returns
C. Credit sales
D. Sales returns
Discuss
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Correct Answer: Option B

Explanation:
A debit note is issued to a supplier when goods are returned, indicating that the supplier's account is debited.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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