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 32 of 94
Question #621
The 'Machine Hour Rate' method of depreciation is suitable when:
A. Wear and tear is mainly due to usage
B. Asset is idle
C. Asset usage varies with time
D. Asset is small
Discuss
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Correct Answer: Option A

Explanation:
Machine hour rate ties depreciation to actual hours used, reflecting wear and tear.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #622
A change in depreciation method is treated as:
A. Extraordinary item
B. Prior period item
C. Error
D. Change in accounting policy
Discuss
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Correct Answer: Option D

Explanation:
Change in depreciation method is a change in accounting policy, requiring retrospective application as per AS 5.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #623
Which of the following is a 'Cash Equivalent'?
A. Short-term, highly liquid investments with maturity 3 months or less
B. Bank deposits with maturity more than 12 months
C. Inventory
D. Debtors
Discuss
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Correct Answer: Option A

Explanation:
Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #624
In a not-for-profit organization, 'Life Membership Fees' is usually treated as:
A. Capital receipt
B. Liability
C. Revenue
D. Expense
Discuss
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Correct Answer: Option A

Explanation:
Life membership fees are generally treated as capital receipt and transferred to a fund, not income.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #625
The 'Fund-based Accounting' is used by:
A. Sole traders
B. Companies
C. Non-profit organizations and government entities
D. Partnership firms
Discuss
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Correct Answer: Option C

Explanation:
Fund-based accounting tracks resources for specific purposes, common in NPOs and government.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #626
In government accounting, the 'Appropriation Audit' is conducted by:
A. Internal auditor
B. Tax auditor
C. CAG
D. Chartered accountant
Discuss
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Correct Answer: Option C

Explanation:
CAG audits appropriation accounts to ensure expenditure is within the grants authorized by Parliament.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #627
The 'Excess Grant' is:
A. Grant not utilized
B. Expenditure in excess of voted grant
C. Token grant
D. Supplementary grant
Discuss
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Correct Answer: Option B

Explanation:
Excess grant is the amount spent over the original grant, requiring regularization by Parliament.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #628
The term 'Cut Motion' in Parliament refers to:
A. Motion to reduce a demand for grant
B. Motion to dissolve government
C. Proposal to increase expenditure
D. Motion to increase tax
Discuss
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Correct Answer: Option A

Explanation:
Cut motion is moved to reduce the amount of a demand for grant.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #629
The 'Guillotine' in budget process refers to:
A. Putting all outstanding demands to vote without further discussion
B. Alloting extra time for discussion
C. Rejection of budget
D. Adjournment of house
Discuss
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Correct Answer: Option A

Explanation:
Guillotine is a parliamentary procedure to close discussion on demands for grants and put them to vote.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #630
The 'Charged Expenditure' on the Consolidated Fund includes:
A. Salary of President and CAG
B. Defense expenditure
C. Road construction
D. Education expenditure
Discuss
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Correct Answer: Option A

Explanation:
Charged expenditure includes emoluments of President, Judges, CAG, etc., which are non-votable.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #631
The 'Finance Bill' is presented in Parliament along with:
A. Annual Financial Statement (Budget)
B. Economic Survey
C. Monetary policy
D. Railway budget
Discuss
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Correct Answer: Option A

Explanation:
Finance Bill is presented to give effect to tax proposals of the budget.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #632
Which of the following is a 'Subsidiary Book'?
A. Sales Day Book
B. Balance Sheet
C. Profit & Loss Account
D. Trial Balance
Discuss
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Correct Answer: Option A

Explanation:
Sales Day Book is a subsidiary book for recording credit sales.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #633
The 'Return Inward Book' is also known as:
A. Sales Returns Book
B. Purchase Returns Book
C. Cash Book
D. Journal
Discuss
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Correct Answer: Option A

Explanation:
Returns inward means goods returned by customers, i.e., sales returns.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #634
A 'Bill Receivable Book' records:
A. Bills drawn by the business and accepted by debtors
B. Bills payable
C. Bills accepted by business
D. All bills
Discuss
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Correct Answer: Option A

Explanation:
Bills Receivable Book records all bills of exchange drawn on debtors and accepted by them.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #635
The 'Bills Payable Book' records:
A. Bills drawn on debtors
B. Acceptances given to creditors
C. All credit purchases
D. Cash purchases
Discuss
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Correct Answer: Option B

Explanation:
Bills Payable Book records bills of exchange accepted by the business payable to creditors.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #636
Which of the following is a 'Liability of a Partner' in a general partnership?
A. Limited to his capital
B. Only for his own acts
C. Unlimited
D. Limited to firm's assets
Discuss
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Correct Answer: Option C

Explanation:
In a general partnership, all partners have unlimited joint and several liability.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #637
A 'Sleeping Partner' is one who:
A. Invests capital but does not take part in day-to-day management
B. Manages the firm
C. Guarantees profits
D. Has unlimited liability only
Discuss
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Correct Answer: Option A

Explanation:
Sleeping or dormant partner contributes capital but does not participate in management.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #638
A 'Partner by Holding Out' is:
A. A deceased partner's legal heir
B. A person who represents himself as a partner but is not
C. A retired partner
D. A minor admitted to benefits
Discuss
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Correct Answer: Option B

Explanation:
A person who by his conduct or words allows others to believe he is a partner may be held liable as partner by estoppel or holding out.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #639
In case of a partnership firm, registration is:
A. Not compulsory but advisable
B. Not possible
C. Mandatory
D. Required only for banking
Discuss
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Correct Answer: Option A

Explanation:
Registration of partnership firm is optional, though unregistered firms face some disabilities.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #640
An unregistered partnership firm cannot sue third parties, but:
A. It can be sued
B. It has no legal existence
C. It cannot enter contracts
D. It cannot be sued
Discuss
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Correct Answer: Option A

Explanation:
An unregistered firm cannot sue, but third parties can sue the firm.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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