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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Page 33 of 94
Question #641
The 'Minor' in a partnership can be admitted:
A. As a managing partner
B. As a sleeping partner with liability
C. As a full partner
D. Only to the benefits of the partnership
Discuss
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Correct Answer: Option D

Explanation:
A minor cannot be a partner but can be admitted to benefits of the firm, with limited liability.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #642
On attaining majority, a minor admitted to benefits has the option to become a partner within:
A. 6 months
B. 3 months
C. 1 year
D. 2 years
Discuss
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Correct Answer: Option A

Explanation:
Within 6 months of attaining majority, he must decide whether to become a partner or not.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #643
A firm has an average profit of ₹50,000, normal rate of return 10%, capital employed ₹4,00,000. Goodwill by capitalization of super profit method (if capitalized at 10%) will be:
A. ₹1,00,000
B. ₹50,000
C. ₹2,00,000
D. ₹10,000
Discuss
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Correct Answer: Option A

Explanation:
Normal profit = 10% of 4,00,000 = 40,000. Super profit = 50,000 - 40,000 = 10,000. Goodwill by capitalization of super profit = 10,000 / 10% = ₹1,00,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #644
A firm's assets ₹6,00,000, liabilities ₹1,00,000, normal rate 10%, average profit ₹75,000. Value of goodwill by capitalization of average profit method (total value less net assets) is:
A. ₹75,000
B. ₹1,00,000
C. ₹2,50,000
D. ₹1,50,000
Discuss
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Correct Answer: Option C

Explanation:
Capitalized value of average profit = 75,000 / 10% = ₹7,50,000. Net assets = 6,00,000 - 1,00,000 = ₹5,00,000. Goodwill = 7,50,000 - 5,00,000 = ₹2,50,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #645
Which of the following is a 'Voucher' in a manual accounting system?
A. A documentary evidence of a transaction
B. A printed receipt
C. Both B and C
D. A cash memo
Discuss
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Correct Answer: Option C

Explanation:
Voucher includes any documentary evidence like cash memo, invoice, receipt.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #646
In voucher system, a 'Debit Voucher' is prepared for:
A. Credit purchases
B. Cash receipts
C. Cash payments
D. Credit sales
Discuss
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Correct Answer: Option C

Explanation:
Debit voucher records cash/bank payment transactions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #647
A 'Credit Voucher' is used to record:
A. Cash sales
B. Cash receipts
C. Credit purchases
D. Journal entries
Discuss
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Correct Answer: Option B

Explanation:
Credit voucher is prepared for all cash/bank receipts.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #648
The 'Voucher Number' should be:
A. Same for all
B. Date-based
C. Random
D. Sequential and unique
Discuss
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Correct Answer: Option D

Explanation:
Vouchers should be numbered serially for control and easy reference.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #649
Which of the following is a 'Non-Voucher' transaction?
A. Cash sale with cash memo
B. Depreciation entry
C. Cash purchase with receipt
D. Bank deposit with pay-in slip
Discuss
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Correct Answer: Option B

Explanation:
Depreciation is a non-cash transaction and does not involve a source document like invoice; it's recorded via journal voucher but is not an external voucher. But the term 'non-voucher' might refer to transactions without a supporting document. Depreciation entry has no source document, so it's often a journal entry. The question is ambiguous but likely pointing to depreciation as a non-cash transaction without physical voucher. Answer A.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #650
The 'Trial Balance' is prepared to:
A. Determine financial position
B. Check accuracy of posting
C. Ascertain profit
D. Prepare cash flow
Discuss
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Correct Answer: Option B

Explanation:
Primary purpose is to verify arithmetical accuracy of ledger postings.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #651
If a Trial Balance tallies, it indicates:
A. No errors exist
B. Only arithmetical accuracy, errors may still exist
C. All transactions are recorded correctly
D. Books are complete
Discuss
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Correct Answer: Option B

Explanation:
Agreed trial balance is not conclusive proof of accuracy; errors of principle, omission, commission may still be present.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #652
A 'Rectifying Entry' is passed to:
A. Record opening entries
B. Correct errors in accounts
C. Close the books
D. Adjust depreciation
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Correct Answer: Option B

Explanation:
Rectifying entries correct errors found after posting.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #653
The 'Closing Stock' is valued on the basis of:
A. Cost or market price whichever is higher
B. Market price only
C. Cost or net realizable value whichever is lower
D. Net realizable value only
Discuss
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Correct Answer: Option C

Explanation:
Prudence convention and AS 2 require lower of cost and NRV.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #654
An item of 'Outstanding Income' is shown in Balance Sheet as:
A. Liability
B. Asset
C. Income
D. Expense
Discuss
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Correct Answer: Option B

Explanation:
Outstanding income is receivable, hence a current asset.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #655
'Prepaid Expenses' are shown as:
A. Expense in P&L
B. Income
C. Asset
D. Liability
Discuss
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Correct Answer: Option C

Explanation:
Prepaid expenses represent future benefit, classified as current assets.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #656
The 'Gross Profit' is transferred to:
A. Profit and Loss Account credit
B. Balance Sheet liability
C. Capital Account
D. Trading Account debit
Discuss
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Correct Answer: Option A

Explanation:
Gross profit is credited to Profit & Loss Account.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #657
Net loss for a period is ultimately adjusted against:
A. Assets
B. Capital
C. Sales
D. Liabilities
Discuss
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Correct Answer: Option B

Explanation:
Net loss reduces owner's equity/capital.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #658
The 'Drawings' of the proprietor are deducted from:
A. Gross profit
B. Net profit
C. Capital
D. Sales
Discuss
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Correct Answer: Option C

Explanation:
Drawings are withdrawal of capital, shown as deduction from capital in balance sheet.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #659
In the absence of any agreement, partners share profits:
A. Equally
B. Based on age
C. In capital ratio
D. Based on experience
Discuss
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Correct Answer: Option A

Explanation:
Indian Partnership Act mandates equal sharing.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #660
Interest on partners' capital is:
A. Always 6%
B. An appropriation of profit
C. Not allowed
D. A charge against profit
Discuss
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Correct Answer: Option B

Explanation:
Interest on capital, when deed provides, is an appropriation of profit, not a charge.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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