Accountancy MCQs | Chapter-wise Multiple Choice Questions with Answers

Question #481

A company's profit after tax is ₹2,00,000. Preference dividend ₹20,000. Transfer to general reserve ₹30,000. Profit available for equity dividend is:

A. ₹2,20,000

B. ₹1,80,000

C. ₹2,00,000

D. ₹1,50,000

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Correct Answer: Option D

Explanation:
Profit after preference dividend and transfer to reserve = 2,00,000 - 20,000 - 30,000 = ₹1,50,000.

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

Question #482

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Which of the following statements is correct?

A. A minor can be a full-fledged partner

B. Partners share profits equally always

C. Partners are entitled to salary if deed provides

D. Partners get interest on capital in all circumstances

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Correct Answer: Option C

Explanation:
Salary to partners is allowed only if partnership deed provides. Interest on capital is not automatic. Profits sharing can be unequal. Minor cannot be a partner, only admitted to benefits.

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

Question #483

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In a partnership, if a partner is guaranteed a minimum profit share, deficiency is borne by:

A. From reserves

B. All partners equally

C. The partner giving guarantee

D. The firm

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Correct Answer: Option C

Explanation:
If a partner guarantees a minimum profit to another, any shortfall is made good by the guaranteeing partner.

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

Question #484

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X and Y share profits in ratio 3:2. Z is admitted with 1/5th share. Sacrificing ratio of X and Y is:

A. 3:2

B. 1:1

C. 2:3

D. Equal to new ratio

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Correct Answer: Option A

Explanation:
If new partner's share is given without specifying sacrifice, old partners sacrifice in their old ratio. So 3:2.

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

Question #485

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At the time of retirement of a partner, goodwill appearing in the balance sheet is:

A. Transferred to revaluation account

B. Written off among all partners in old ratio

C. Retained as is

D. Credited to retiring partner only

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Correct Answer: Option B

Explanation:
Existing goodwill in books is written off by debiting all partners' capital accounts in old ratio.

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

Question #486

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On dissolution of a firm, the balance in the partners' capital accounts after all adjustments is transferred to:

A. Cash/Bank account

B. Profit & Loss account

C. Revaluation account

D. Realisation account

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Correct Answer: Option A

Explanation:
Finally, the capital account balances are paid off in cash or bank, and accounts are closed.

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

Question #487

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A Realisation Account is opened at the time of:

A. Change in profit-sharing ratio

B. Dissolution of partnership firm

C. Retirement of a partner

D. Admission of a partner

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Correct Answer: Option B

Explanation:
Realisation Account is prepared to close books on dissolution of the firm, not just reconstitution.

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Question #488

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Contingent liability is shown in the balance sheet:

A. Under provisions

B. As a footnote

C. As an asset

D. Under current liabilities

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Correct Answer: Option B

Explanation:
Contingent liabilities are disclosed by way of notes to accounts, not as a liability in the balance sheet.

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

Question #489

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An increase in the value of a fixed asset is credited to:

A. Profit & Loss Account

B. Revaluation Reserve

C. General Reserve

D. Capital Reserve

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Correct Answer: Option B

Explanation:
Increase in value on revaluation is credited to Revaluation Reserve, as per AS 10.

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Question #490

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Which of the following is NOT a function of an auditor?

A. Reporting on true and fair view

B. Verification of assets

C. Checking compliance with accounting standards

D. Preparing financial statements

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Correct Answer: Option D

Explanation:
Preparation of financial statements is the responsibility of management, not the auditor.

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Question #491

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The audit of a company's accounts is conducted by:

A. Cost auditor

B. Internal auditor

C. Statutory auditor appointed by shareholders

D. Government auditor

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Correct Answer: Option C

Explanation:
Statutory audit is carried out by an independent auditor appointed by the shareholders.

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Question #492

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A voucher that supports a transaction is called:

A. Transfer voucher

B. Source voucher

C. Journal voucher

D. Cash voucher

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Correct Answer: Option B

Explanation:
Source vouchers are original documents like invoices, receipts that prove a transaction occurred.

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Question #493

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In a computerized accounting system, a voucher is:

A. A physical paper document

B. A type of software

C. A printed report

D. A screen to input transaction data

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Correct Answer: Option D

Explanation:
In accounting software, voucher refers to the data entry form for recording transactions.

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Question #494

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The system of recording transactions where each transaction is recorded once only is called:

A. Mercantile

B. Double entry

C. Cash basis

D. Single entry

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Correct Answer: Option D

Explanation:
Single entry system does not record both aspects; often only personal accounts are maintained.

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Question #495

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Which of the following statements is true about the Trial Balance?

A. It is a subsidiary book

B. It is a statement

C. It is a part of ledger

D. It is an account

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Correct Answer: Option B

Explanation:
Trial balance is a statement, not an account.

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Question #496

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Purchase of furniture on credit is recorded in:

A. Cash book

B. Journal proper

C. Purchase book

D. Sales book

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Correct Answer: Option B

Explanation:
Credit purchase of assets is recorded in journal proper, not purchase book (which is for goods).

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Question #497

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The closing entry for transferring purchases account is:

A. Capital A/c Dr. To Purchases A/c

B. Trading A/c Dr. To Purchases A/c

C. Purchases A/c Dr. To Trading A/c

D. Profit & Loss A/c Dr. To Purchases A/c

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Correct Answer: Option B

Explanation:
At year-end, purchases account balance is transferred to Trading Account by debiting Trading A/c and crediting Purchases A/c.

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Question #498

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A debit balance in a personal account of a creditor indicates:

A. He has become debtor

B. Both B and C

C. Amount payable to him

D. Amount receivable from him

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Correct Answer: Option B

Explanation:
A creditor account with debit balance means the firm has paid excess or he owes money, so he is a debtor.

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Question #499

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The 'Impersonal Accounts' are:

A. Only nominal accounts

B. Real and nominal accounts

C. Only real accounts

D. Personal accounts only

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Correct Answer: Option B

Explanation:
Impersonal accounts include real accounts (assets) and nominal accounts (expenses, losses, incomes, gains).

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Question #500

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According to the accounting equation, if a business borrows ₹50,000 from bank, then:

A. Assets increase, liabilities increase

B. Assets decrease, liabilities increase

C. Assets increase, capital increase

D. Assets decrease, capital decrease

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Correct Answer: Option A

Explanation:
Cash (asset) increases, and bank loan (liability) increases.

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