Accountancy MCQs | Chapter-wise Multiple Choice Questions with Answers

Question #21

Share Report

Which document serves as the basis for recording transactions in the books of accounts?

A. Source Document

B. Ledger Account

C. Trial Balance

D. Financial Statement

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

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

Share Report

A Cash Voucher is prepared for:

A. Only cash payments

B. Both cash receipts and cash payments

C. Credit transactions

D. Only cash receipts

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

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

Share Report

Non-cash vouchers are also known as:

A. Credit Vouchers

B. Debit Vouchers

C. Transfer Vouchers

D. Payment Vouchers

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

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

Share Report

A Debit Voucher is specifically prepared for:

A. Purchase returns on credit

B. Cash payments

C. Cash receipts

D. Credit sales

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

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

Share Report

Who typically authorizes an accounting voucher before it is recorded?

A. The Cashier

B. The Auditor

C. The Junior Accountant

D. An Authorized Signatory or Manager

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

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

Share Report

Which of the following is an example of an internal source document?

A. Bank Statement

B. Material Requisition Slip

C. Electricity Bill

D. Purchase Invoice from supplier

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

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

Share Report

The primary purpose of preparing a Bank Reconciliation Statement (BRS) is to:

A. Identify causes of difference between cash book and pass book balances

B. Correct errors in the ledger

C. Calculate bank interest

D. Determine the net profit

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

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

Share Report

When starting a BRS with a debit balance as per the Cash Book, cheques issued but not yet presented for payment should be:

A. Divided

B. Ignored

C. Added

D. Deducted

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

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

Share Report

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. No difference in balances

C. Pass Book balance to be lower than Cash Book balance

D. Cash Book balance to be higher than Pass Book balance

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

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

Share Report

Bank charges debited by the bank will be ________ when starting with an overdraft balance as per Pass Book.

A. Multiplied

B. Ignored

C. Added

D. Deducted

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

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

Share Report

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 10,000

B. Deduct Rs 5,000

C. Add Rs 10,000

D. Add Rs 5,000

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

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

Share Report

An amended Cash Book is prepared to correct:

A. Only bank overdrafts

B. Timing differences like unpresented cheques

C. Errors made by the bank

D. Errors and omissions made in the Cash Book

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

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

Share Report

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

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

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

Share Report

Which of the following is NOT a component of financial statements for a sole proprietorship?

A. Balance Sheet

B. Profit & Loss Account

C. Trading Account

D. Statement of Changes in Equity

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

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

Share Report

In the Balance Sheet, assets are typically arranged in the order of:

A. Date of purchase

B. Liquidity or Permanence

C. Profitability or Loss

D. Alphabetical order

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

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

Share Report

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

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

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

Share Report

Preliminary expenses are generally classified in the balance sheet under:

A. Fictitious Assets / Unamortized expenditure

B. Current Assets

C. Fixed Assets

D. Intangible Assets

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

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

Share Report

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

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

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

Share Report

Notes to Accounts are provided to:

A. Calculate daily cash flow

B. Make the balance sheet look longer

C. Provide detailed disclosures and accounting policies

D. Replace the Trial Balance

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

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

Share Report

The primary objective of Financial Management is:

A. Maximizing market share

B. Minimizing taxes

C. Wealth maximization of shareholders

D. Profit maximization

View Answer & Solution Discuss

Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

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

Accountancy and Book Keeping MCQs

Practice Questions

More Accountancy and Statistics Topics