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 35 of 94
Question #681
The 'Investor Education and Protection Fund' (IEPF) is established under:
A. Income Tax Act
B. RBI Act
C. SEBI Act
D. Companies Act, 2013
Discuss
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Correct Answer: Option D

Explanation:
IEPF is constituted under Section 125 of Companies Act, 2013.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #682
The 'Corporate Social Responsibility' (CSR) spending is mandatory for companies meeting specified criteria under:
A. GST Act
B. SEBI guidelines
C. Income Tax Act
D. Section 135 of Companies Act, 2013
Discuss
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Correct Answer: Option D

Explanation:
Section 135 mandates CSR spending for eligible companies.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #683
Which of the following is an 'Accounting Estimate'?
A. Inventory valuation method
B. Depreciation method
C. Useful life of an asset
D. Revenue recognition policy
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Correct Answer: Option C

Explanation:
Useful life is an estimate; depreciation method is an accounting policy.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #684
A 'Change in Accounting Estimate' is applied:
A. Prospectively
B. Retrospectively
C. With restatement
D. Adjusting opening reserves
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Correct Answer: Option A

Explanation:
Changes in accounting estimates are recognized prospectively in current and future periods.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #685
The 'Prior Period Items' are shown in:
A. Reserves
B. Balance sheet
C. Separately in the current period's financial statements
D. Current period's profit and loss
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Correct Answer: Option C

Explanation:
Prior period items are disclosed separately in the statement of profit and loss.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #686
Which of the following is a 'Contingent Asset'?
A. A potential asset that arises from past events and whose existence will be confirmed by future events not wholly under the entity's control
B. A provision
C. An asset recognized in balance sheet
D. A current asset
Discuss
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Correct Answer: Option A

Explanation:
Contingent asset is not recognized but disclosed if probable.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #687
A 'Provision' is recognized when:
A. Management decides
B. For all future losses
C. It is certain
D. There is a present obligation, probable outflow, reliable estimate
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Correct Answer: Option D

Explanation:
As per AS 29, provision is recognized when these three conditions are met.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #688
The 'Deferred Revenue Expenditure' is an expenditure that:
A. Is capital expenditure
B. Provides benefit over several accounting periods
C. Is entirely charged to current year
D. Is never written off
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Correct Answer: Option B

Explanation:
Deferred revenue expenditure (e.g., heavy advertisement) is written off over a number of years.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #689
Under 'Operating Lease', the asset is shown in the books of:
A. Both
B. Lessee
C. Lessor
D. None
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Correct Answer: Option C

Explanation:
In operating lease, lessor retains ownership and asset is in his books.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #690
Under 'Finance Lease', the lessee records the leased asset in his books as per:
A. AS 10
B. AS 6
C. AS 2
D. AS 19
Discuss
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Correct Answer: Option D

Explanation:
AS 19 Leases requires lessee to capitalize finance lease.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #691
'AS 10' deals with:
A. Property, Plant and Equipment
B. Cash flows
C. Revenue
D. Inventories
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Correct Answer: Option A

Explanation:
AS 10 covers accounting for fixed assets (now Ind AS 16).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #692
'AS 9' pertains to:
A. Revenue Recognition
B. Depreciation
C. Taxes on income
D. Inventories
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Correct Answer: Option A

Explanation:
AS 9 Revenue Recognition provides guidance on when to recognize revenue.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #693
'AS 22' covers:
A. Accounting for Taxes on Income
B. Borrowing costs
C. Earnings per share
D. Impairment of assets
Discuss
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Correct Answer: Option A

Explanation:
AS 22 deals with deferred tax and current tax.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #694
The objective of 'Financial Statements' is to provide information about:
A. Financial position, performance, and cash flows
B. Only liabilities
C. Only profit
D. Only assets
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Correct Answer: Option A

Explanation:
Financial statements present the financial position, performance, and cash flows of an entity.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #695
The 'Statement of Changes in Equity' shows:
A. Changes in owners' equity during the period
B. Changes in liabilities
C. Cash flows
D. Changes in assets
Discuss
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Correct Answer: Option A

Explanation:
It reconciles opening and closing equity, showing profit/loss, other comprehensive income, transactions with owners.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #696
The 'Cash Flow Statement' is prepared as per:
A. AS 22
B. AS 10
C. AS 9
D. AS 3
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Correct Answer: Option D

Explanation:
AS 3 deals with preparation of cash flow statements.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #697
The 'Cost of Inventory' does not include:
A. Storage costs necessary in production process
B. Freight inwards
C. Customs duty
D. Selling and distribution costs
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Correct Answer: Option D

Explanation:
Selling costs are excluded from inventory cost as per AS 2.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #698
The term 'Net Realizable Value' means:
A. Market price
B. Estimated selling price less costs to complete and sell
C. Original cost
D. Replacement cost
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Correct Answer: Option B

Explanation:
NRV = estimated selling price in ordinary course less estimated costs of completion and estimated costs to make the sale.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #699
A 'Cash Generating Unit' is defined under:
A. AS 28 Impairment of Assets
B. AS 14 Amalgamation
C. AS 10 Fixed Assets
D. AS 2 Inventories
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Correct Answer: Option A

Explanation:
CGU is a concept used in impairment testing under AS 28.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #700
The 'Component Accounting' is required under:
A. AS 2
B. AS 13
C. Ind AS 16 / AS 10
D. AS 15
Discuss
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Correct Answer: Option C

Explanation:
Ind AS 16 requires significant parts of an asset to be depreciated separately.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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