Accountancy MCQs | Chapter-wise Multiple Choice Questions with Answers

Question #381

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Bank column of cash book always shows a debit balance if there is:

A. Overdraft

B. Fixed deposit

C. No transactions

D. Favourable balance

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Correct Answer: Option D

Explanation:
A debit balance in bank column means money in bank (favourable balance). Overdraft is credit balance.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #382

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A cheque received from a customer and deposited but dishonoured is recorded in cash book by:

A. Debiting bank account and crediting customer account

B. Only a note

C. No entry

D. Crediting bank account and debiting customer account

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Correct Answer: Option D

Explanation:
On dishonour, the bank balance decreases, so credit bank; customer again becomes debtor, so debit customer.

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Question #383

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In BRS, if overdraft as per pass book is the starting point, bank charges not recorded in cash book will:

A. Decrease overdraft

B. No change

C. Increase overdraft

D. Not considered

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Correct Answer: Option C

Explanation:
Bank charges reduce passbook balance, so overdraft increases. So add to overdraft as per passbook.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #384

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In a partnership firm, a partner's current account is maintained to record:

A. Drawings, interest on capital, salary, share of profit, etc.

B. Only loans to partners

C. Only profits

D. Only capital contributions

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Correct Answer: Option A

Explanation:
Fixed capital method keeps capital account for initial capital and current account for all other adjustments.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #385

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X and Y are partners sharing profits 3:2. Z is admitted for 1/4th share. New profit-sharing ratio will be:

A. 9:3:4

B. 9:6:5

C. 3:2:1

D. 6:4:5

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Correct Answer: Option B

Explanation:
Remaining share = 1 - 1/4 = 3/4 distributed in 3:2, so X = 3/4 * 3/5 = 9/20, Y = 3/4 * 2/5 = 6/20, Z = 5/20. Ratio = 9:6:5.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #386

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The term 'IFRS' stands for:

A. Indian Financial Reporting Standards

B. Indian Fiscal Reporting System

C. International Fiscal Reporting Standards

D. International Financial Reporting Standards

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Correct Answer: Option D

Explanation:
IFRS stands for International Financial Reporting Standards, issued by IASB.

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Question #387

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Ind AS in India are converged with:

A. UK GAAP

B. ASB standards only

C. IFRS

D. US GAAP

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Correct Answer: Option C

Explanation:
Indian Accounting Standards (Ind AS) are converged with International Financial Reporting Standards (IFRS).

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Question #388

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The full form of GAAP is:

A. Generally Accepted Accounting Principles

B. Generally Accepted Accounting Procedures

C. Global Accounting and Auditing Practices

D. Generally Accepted Auditing Principles

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Correct Answer: Option A

Explanation:
GAAP stands for Generally Accepted Accounting Principles.

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Question #389

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Which of the following is not a type of voucher?

A. Supporting voucher

B. Accounting voucher

C. Audit voucher

D. Source voucher

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Correct Answer: Option C

Explanation:
Vouchers are classified as source vouchers (e.g., invoices) and accounting vouchers (e.g., cash, debit, credit, journal). Audit voucher is not a standard type.

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Question #390

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In which book, credit purchase of machinery is recorded?

A. Sales book

B. Journal Proper

C. Purchase book

D. Cash book

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Correct Answer: Option B

Explanation:
Purchase book is for credit purchases of goods. Machinery is an asset, so credit purchase is recorded in Journal Proper.

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Question #391

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A sales book is meant to record:

A. All sales of goods

B. Credit sales of goods

C. Sales of assets

D. Cash sales of goods

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Correct Answer: Option B

Explanation:
Sales book records only credit sales of goods in which the trader deals.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #392

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Goods worth ₹1,000 taken by proprietor for personal use should be recorded by:

A. Debiting purchases account

B. Debiting drawings account

C. Crediting sales account

D. No entry

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Correct Answer: Option B

Explanation:
Entry: Drawings A/c Dr. To Purchases A/c. So drawings debited.

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Question #393

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The cost of a machine is ₹1,00,000, scrap value ₹10,000, useful life 10 years. Annual depreciation under straight-line method:

A. ₹11,000

B. ₹10,000

C. ₹1,000

D. ₹9,000

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Correct Answer: Option D

Explanation:
Depreciation = (Cost - Scrap) / Life = (1,00,000 - 10,000) / 10 = ₹9,000.

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Question #394

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Working capital is calculated as:

A. Current assets - Current liabilities

B. Fixed assets - Long-term liabilities

C. Total assets - Total liabilities

D. Quick assets - Current liabilities

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Correct Answer: Option A

Explanation:
Working capital = Current assets - Current liabilities.

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Question #395

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A company's quick ratio is 1:1, current assets ₹2,00,000, inventory ₹40,000. Current liabilities are:

A. ₹1,00,000

B. ₹40,000

C. ₹2,00,000

D. ₹1,60,000

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Correct Answer: Option D

Explanation:
Quick assets = Current assets - Inventory = 2,00,000 - 40,000 = 1,60,000. Quick ratio = QA / CL = 1:1, so CL = ₹1,60,000.

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Question #396

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Direct taxes are progressive in nature because:

A. Rate increases with income level

B. Rate is same for all

C. They are only on goods

D. They are collected indirectly

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Correct Answer: Option A

Explanation:
Direct taxes like income tax have higher rates for higher income slabs, making them progressive.

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Question #397

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Input Tax Credit under GST can be claimed on:

A. Food and beverages for employees

B. Goods used for business furtherance

C. Membership of club

D. Motor vehicles for personal use

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Correct Answer: Option B

Explanation:
ITC is available only for inputs used in the course of business, subject to conditions in CGST Act.

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Question #398

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The Income Tax Act, 1961 classifies income under how many heads?

A. Four

B. Five

C. Six

D. Seven

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Correct Answer: Option B

Explanation:
Heads of income: Salary, House property, Business/profession, Capital gains, Other sources. Total five heads.

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Question #399

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Which of the following is a direct tax levied by local bodies?

A. Customs duty

B. GST

C. Excise duty

D. Property tax

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Correct Answer: Option D

Explanation:
Property tax is a direct tax levied by municipal bodies on property owners.

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Question #400

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The primary purpose of a cost sheet is to:

A. Ascertain profit for the year

B. Ascertain cost per unit of a product

C. Calculate tax liability

D. Prepare financial statements

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Correct Answer: Option B

Explanation:
Cost sheet shows the various elements of cost and total cost per unit of output.

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