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 23 of 94
Question #441
The financial ratio that measures short-term solvency is:
A. Debt-equity ratio
B. Return on investment
C. Gross profit ratio
D. Current ratio
Discuss
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Correct Answer: Option D

Explanation:
Current ratio assesses the ability to meet short-term obligations.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #442
A company's current ratio is 2:1. If current liabilities are ₹1,00,000, current assets are:
A. ₹1,00,000
B. ₹3,00,000
C. ₹50,000
D. ₹2,00,000
Discuss
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Correct Answer: Option D

Explanation:
Current ratio = Current assets / Current liabilities; 2 = CA / 1,00,000 => CA = ₹2,00,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #443
In the context of single entry system, 'Net Worth' means:
A. Excess of assets over liabilities
B. Total liabilities
C. Cash in hand
D. Total assets
Discuss
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Correct Answer: Option A

Explanation:
Net worth = Total assets - Total liabilities, representing owner's equity.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #444
PFMS portal is used for:
A. Direct Benefit Transfer (DBT)
B. e-procurement
C. Company registration
D. Tax filing
Discuss
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Correct Answer: Option A

Explanation:
PFMS facilitates direct benefit transfers and real-time tracking of government funds.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #445
The Indian Financial Management System (IFMS) integrates:
A. Only pension payments
B. Only state government accounts
C. Expenditure, receipts, and debt management
D. Only receipts
Discuss
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Correct Answer: Option C

Explanation:
IFMS is a comprehensive system covering all aspects of government financial management including budget, expenditure, receipts, and debt.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #446
Under GST, the term 'mixed supply' refers to:
A. Supply of exempt and taxable items together
B. Supply of goods and services for a single price
C. Supply of capital goods only
D. Two or more individual supplies made together for a single price
Discuss
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Correct Answer: Option D

Explanation:
Mixed supply means two or more individual supplies of goods or services made in conjunction for a single price, where each item can be supplied separately.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #447
The basic exemption limit for an individual below 60 years under the new tax regime (AY 2024-25) is:
A. ₹3,00,000
B. ₹5,00,000
C. ₹2,00,000
D. ₹2,50,000
Discuss
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Correct Answer: Option A

Explanation:
Under the new regime, basic exemption limit is ₹3,00,000 for individuals below 60 years.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #448
Which of the following is an indirect tax in India?
A. Income tax
B. Wealth tax
C. Corporation tax
D. GST
Discuss
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Correct Answer: Option D

Explanation:
GST is an indirect tax on supply of goods and services.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #449
Tax Audit under Income Tax Act is mandatory for businesses with turnover exceeding:
A. ₹1 crore
B. ₹10 crore
C. ₹2 crore
D. ₹50 lakh
Discuss
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Correct Answer: Option A

Explanation:
Tax audit is required if turnover exceeds ₹1 crore in case of business (subject to digital transaction threshold of ₹10 crore in certain cases). Standard limit ₹1 crore.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #450
The primary objective of cost accounting is:
A. To ascertain selling price
B. To ascertain cost and control cost
C. To prepare financial accounts
D. To calculate tax
Discuss
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Correct Answer: Option B

Explanation:
Cost accounting focuses on recording, classifying, and controlling costs to aid management decisions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #451
Marginal cost is the cost of:
A. Total cost divided by units
B. Producing one unit
C. Fixed costs
D. Producing one additional unit
Discuss
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Correct Answer: Option D

Explanation:
Marginal cost is the change in total cost due to producing one additional unit.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #452
In budgetary control, a 'master budget' is:
A. Capital expenditure budget
B. Cash budget only
C. A summary of all functional budgets
D. Only sales budget
Discuss
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Correct Answer: Option C

Explanation:
Master budget consolidates all subsidiary budgets (sales, production, cash, etc.) into a comprehensive overall budget.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #453
Which of the following is a technique of cost management?
A. Standard costing
B. Fund flow analysis
C. Ratio analysis
D. Tax planning
Discuss
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Correct Answer: Option A

Explanation:
Standard costing is a cost management technique for controlling costs through variance analysis.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #454
The difference between standard cost and actual cost is called:
A. Waste
B. Variance
C. Margin
D. Profit
Discuss
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Correct Answer: Option B

Explanation:
Variance is the difference between standard (expected) cost and actual cost.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #455
In recent years, which technology has significantly impacted accounting?
A. All of these
B. Artificial intelligence
C. Blockchain
D. Cloud computing
Discuss
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Correct Answer: Option A

Explanation:
All these technologies (cloud, AI, blockchain) are transforming accounting by automating tasks, improving accuracy, and enabling real-time reporting.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #456
Social Accounting is also known as:
A. Social responsibility accounting
B. Environmental accounting
C. All of these
D. Green accounting
Discuss
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Correct Answer: Option C

Explanation:
Social accounting encompasses reporting on social, environmental, and ethical impacts, often termed social responsibility accounting, environmental accounting, or green accounting.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #457
A social audit is typically conducted by:
A. Only management
B. Only chartered accountants
C. Stakeholders, including community representatives
D. Only government officials
Discuss
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Correct Answer: Option C

Explanation:
Social audit involves participation of various stakeholders, including the local community, to evaluate social performance.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #458
Which of the following is NOT a feature of cash basis accounting?
A. Used by small professionals
B. Simple to maintain
C. Complies with matching principle
D. Records only cash transactions
Discuss
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Correct Answer: Option C

Explanation:
Cash basis does not follow the matching principle, as revenues and expenses are recorded only when cash is exchanged.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #459
Under single entry system, profit = closing capital - opening capital + drawings - additional capital introduced. This statement is:
A. Correct
B. Only for companies
C. Incorrect
D. Partially correct, needs other adjustments
Discuss
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Correct Answer: Option A

Explanation:
In single entry, adjusted profit is derived from capital comparison: Profit = Closing capital + Drawings - Opening capital - Additional capital.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #460
Public Financial Management System (PFMS) helps in:
A. All of the above
B. Ensuring last-mile connectivity in fund transfer
C. Monitoring government subsidies
D. Preventing leakages
Discuss
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Correct Answer: Option A

Explanation:
PFMS aims to track funds, monitor subsidies, ensure DBT, and reduce leakages in public expenditure.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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