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

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Question #21
Which document serves as the basis for recording transactions in the books of accounts?
A. Trial Balance
B. Ledger Account
C. Source Document
D. Financial Statement
Discuss
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Correct Answer: Option C

Explanation:
Source documents (like invoices, receipts) provide the objective evidence and basic data for preparing accounting vouchers.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #22
A Cash Voucher is prepared for:
A. Credit transactions
B. Both cash receipts and cash payments
C. Only cash payments
D. Only cash receipts
Discuss
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Correct Answer: Option B

Explanation:
Cash vouchers are used to record all transactions involving the physical inflow or outflow of cash.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #23
Non-cash vouchers are also known as:
A. Payment Vouchers
B. Transfer Vouchers
C. Credit Vouchers
D. Debit Vouchers
Discuss
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Correct Answer: Option B

Explanation:
Transfer vouchers (or non-cash vouchers) are used to record non-cash transactions like credit sales, credit purchases, and depreciation.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #24
A Debit Voucher is specifically prepared for:
A. Purchase returns on credit
B. Cash receipts
C. Cash payments
D. Credit sales
Discuss
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Correct Answer: Option C

Explanation:
Debit vouchers are documentary evidence for cash payments made to suppliers, for expenses, or for asset purchases.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #25
Who typically authorizes an accounting voucher before it is recorded?
A. The Junior Accountant
B. The Cashier
C. An Authorized Signatory or Manager
D. The Auditor
Discuss
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Correct Answer: Option C

Explanation:
For internal control, vouchers must be signed and authorized by a designated manager or official before posting.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #26
Which of the following is an example of an internal source document?
A. Purchase Invoice from supplier
B. Material Requisition Slip
C. Bank Statement
D. Electricity Bill
Discuss
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Correct Answer: Option B

Explanation:
A material requisition slip is generated internally within the organization to authorize the transfer of materials.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #27
The primary purpose of preparing a Bank Reconciliation Statement (BRS) is to:
A. Calculate bank interest
B. Correct errors in the ledger
C. Identify causes of difference between cash book and pass book balances
D. Determine the net profit
Discuss
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Correct Answer: Option C

Explanation:
BRS is prepared to reconcile the bank balance as per the cash book with the balance as per the bank statement (pass book).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #28
When starting a BRS with a debit balance as per the Cash Book, cheques issued but not yet presented for payment should be:
A. Ignored
B. Divided
C. Deducted
D. Added
Discuss
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Correct Answer: Option D

Explanation:
These cheques decreased the cash book balance but not the pass book. To match the pass book, they must be added back.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #29
Direct deposit by a customer into the bank account, not recorded in the Cash Book, will cause:
A. Pass Book balance to be higher than Cash Book balance
B. Pass Book balance to be lower than Cash Book balance
C. No difference in balances
D. Cash Book balance to be higher than Pass Book balance
Discuss
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Correct Answer: Option A

Explanation:
The bank records the deposit immediately (increasing Pass Book balance), but the cash book is un-updated until the statement is received.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #30
Bank charges debited by the bank will be ________ when starting with an overdraft balance as per Pass Book.
A. Ignored
B. Added
C. Multiplied
D. Deducted
Discuss
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Correct Answer: Option D

Explanation:
Bank charges increase the overdraft in the pass book. To arrive at the cash book overdraft (which is lower since it missed the charge), it must be deducted.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #31
A cheque of Rs 5,000 was deposited but dishonored. No entry was passed in the Cash Book. To reconcile from a favorable Cash Book balance, you should:
A. Deduct Rs 5,000
B. Deduct Rs 10,000
C. Add Rs 5,000
D. Add Rs 10,000
Discuss
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Correct Answer: Option A

Explanation:
The dishonor reduces the pass book balance. To match it, you must deduct the amount from the cash book balance.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #32
An amended Cash Book is prepared to correct:
A. Timing differences like unpresented cheques
B. Only bank overdrafts
C. Errors and omissions made in the Cash Book
D. Errors made by the bank
Discuss
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Correct Answer: Option C

Explanation:
An amended cash book is prepared to adjust omissions (like bank charges) and errors in the cash book before preparing the final BRS.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #33
If BRS is prepared starting with a credit balance as per Cash Book (overdraft), interest allowed by the bank will be:
A. Deducted
B. Not treated in BRS
C. Treated as an error
D. Added
Discuss
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Correct Answer: Option A

Explanation:
Interest allowed reduces the actual bank overdraft (Pass book). To make the Cash book overdraft match this lower figure, it must be deducted.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #34
Which of the following is NOT a component of financial statements for a sole proprietorship?
A. Statement of Changes in Equity
B. Profit & Loss Account
C. Balance Sheet
D. Trading Account
Discuss
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Correct Answer: Option A

Explanation:
Statement of Changes in Equity is typically a required component for corporate entities under Ind AS, not for standard sole proprietorships.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #35
In the Balance Sheet, assets are typically arranged in the order of:
A. Profitability or Loss
B. Liquidity or Permanence
C. Date of purchase
D. Alphabetical order
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Correct Answer: Option B

Explanation:
Marshalling of balance sheet assets is done either in the order of liquidity (most liquid first) or permanence (most fixed first).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #36
As per Schedule III of the Companies Act 2013, a liability is classified as current if it is expected to be settled within:
A. 5 years
B. 6 months
C. 24 months
D. 12 months or the company's operating cycle
Discuss
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Correct Answer: Option D

Explanation:
A liability is current if it is due to be settled within 12 months after the reporting date or within the normal operating cycle.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #37
Preliminary expenses are generally classified in the balance sheet under:
A. Current Assets
B. Intangible Assets
C. Fictitious Assets / Unamortized expenditure
D. Fixed Assets
Discuss
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Correct Answer: Option C

Explanation:
Preliminary expenses are fictitious assets representing past expenditures that haven't been completely written off to the P&L account.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #38
Which concept dictates that Financial Statements should disclose all significant information affecting the judgment of a user?
A. Matching
B. Consistency
C. Materiality
D. Full Disclosure
Discuss
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Correct Answer: Option D

Explanation:
The Full Disclosure principle ensures that investors and creditors have all the material information needed to make informed decisions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #39
Notes to Accounts are provided to:
A. Provide detailed disclosures and accounting policies
B. Make the balance sheet look longer
C. Replace the Trial Balance
D. Calculate daily cash flow
Discuss
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Correct Answer: Option A

Explanation:
Notes to Accounts offer detailed breakdowns, accounting policies, and explanatory information supporting the numbers in the financial statements.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #40
The primary objective of Financial Management is:
A. Wealth maximization of shareholders
B. Minimizing taxes
C. Profit maximization
D. Maximizing market share
Discuss
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Correct Answer: Option A

Explanation:
Wealth maximization is considered the superior objective as it accounts for long-term value creation, risk, and the time value of money.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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