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.

1861
Total Questions

Practice Questions

Page 40 of 94
Question #781
The 'Transfer Pricing' regulations in India are contained in:
A. SEBI Act
B. Sections 92 to 92F of Income Tax Act
C. Companies Act
D. GST Act
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Transfer pricing provisions apply to international transactions and specified domestic transactions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #782
The 'Arm's Length Price' is:
A. Government fixed price
B. Price that would be charged between unrelated parties
C. Market price
D. Price charged between related parties
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Arm's length price is the price applied in a transaction between independent parties under similar conditions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #783
The 'Country-by-Country Reporting' (CbCR) is required for:
A. Multinational enterprises meeting specified threshold
B. All taxpayers
C. Small companies
D. Individuals
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
CbCR is part of BEPS Action Plan, requiring MNE groups to report key financial data for each jurisdiction.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #784
The 'Base Erosion and Profit Shifting' (BEPS) project is an initiative of:
A. OECD
B. UN
C. IMF
D. World Bank
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
OECD's BEPS project aims to tackle tax avoidance by multinationals.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #785
The 'Equalisation Levy' was expanded in 2020 to cover:
A. All services
B. All digital transactions
C. E-commerce supply of goods and services by non-resident e-commerce operators
D. Physical goods
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Finance Act 2020 expanded scope to include e-commerce operators, even if they don't have a permanent establishment.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #786
The 'Significant Economic Presence' (SEP) concept was introduced in India to:
A. Simplify tax
B. Tax non-resident digital companies based on economic engagement
C. Encourage FDI
D. Reduce tax on foreigners
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
SEP deems a business connection if a non-resident has significant economic presence, even without physical presence.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #787
Which accounting principle states that revenue should be recognized only when it is actually earned, not necessarily when cash is received?
A. Revenue Recognition Principle
B. Matching Principle
C. Conservatism Principle
D. Historical Cost Principle
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
The Revenue Recognition (Realization) principle dictates that revenue is recognized when the earning process is virtually complete and an exchange has taken place.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #788
If a business purchases land for Rs 10 lakhs and its market value increases to Rs 15 lakhs, it is still recorded at Rs 10 lakhs due to:
A. Dual Aspect Concept
B. Money Measurement Concept
C. Going Concern Concept
D. Cost Concept
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
The Cost Concept (Historical Cost) requires assets to be recorded at their original purchase price, ignoring subsequent market value fluctuations.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #789
The accounting standard AS-9 primarily deals with:
A. Revenue Recognition
B. Inventory Valuation
C. Accounting for Fixed Assets
D. Depreciation Accounting
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
AS-9 issued by ICAI lays down the conditions and guidelines for recognizing revenue arising from ordinary business activities.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #790
Which concept dictates that personal expenses of the owner paid from the business account should be treated as drawings?
A. Materiality
B. Periodicity
C. Business Entity Concept
D. Conservatism
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
The Business Entity Concept treats the owner and the business as two distinct legal entities, separating personal and business transactions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #791
Creating a provision for doubtful debts is an application of which accounting convention?
A. Materiality
B. Conservatism
C. Consistency
D. Full Disclosure
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Conservatism (Prudence) requires anticipating potential future losses (like bad debts) and providing for them immediately.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #792
Accounting data is considered 'Relevant' if it:
A. Influences the economic decisions of users
B. Is completely free from errors
C. Is presented in a standardized format
D. Can be verified by an auditor
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Relevance is a qualitative characteristic implying the information has predictive or confirmatory value for decision-makers.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #793
Which of the following is a fundamental accounting assumption as per AS-1?
A. Conservatism
B. Materiality
C. Matching
D. Accrual
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
AS-1 lists Going Concern, Consistency, and Accrual as the three fundamental accounting assumptions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #794
If total assets increase by Rs 40,000 and total liabilities increase by Rs 10,000, what is the effect on the owner's equity?
A. Increases by Rs 50,000
B. Decreases by Rs 30,000
C. Decreases by Rs 40,000
D. Increases by Rs 30,000
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Since Assets = Liabilities + Equity, 40,000 (Increase) = 10,000 (Increase) + Equity (Increase). Equity must increase by Rs 30,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #795
Which transaction will increase an asset and decrease another asset, keeping the accounting equation unchanged?
A. Payment to a creditor
B. Introduction of capital
C. Purchase of machinery for cash
D. Goods purchased on credit
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Purchasing machinery for cash increases the Machinery asset and decreases the Cash asset by the same amount.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #796
Total liabilities are Rs 2,50,000 and the debt-to-equity ratio is 1:2. What is the value of Total Assets?
A. Rs 7,50,000
B. Rs 10,00,000
C. Rs 5,00,000
D. Rs 2,50,000
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Equity = 2 * Liabilities = Rs 5,00,000. Total Assets = Liabilities + Equity = 2,50,000 + 5,00,000 = Rs 7,50,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #797
A business has opening capital of Rs 2,00,000. During the year, it earned a profit of Rs 50,000, owner withdrew Rs 30,000, and fresh capital of Rs 40,000 was introduced. What is the closing capital?
A. Rs 2,90,000
B. Rs 2,40,000
C. Rs 2,60,000
D. Rs 2,20,000
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Closing Capital = Opening (2,00,000) + Profit (50,000) + Fresh (40,000) - Drawings (30,000) = Rs 2,60,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #798
When a firm borrows money from a bank, what is the impact on the accounting equation?
A. Assets increase, Equity increases
B. Liabilities increase, Equity decreases
C. Assets increase, Liabilities increase
D. No change in total assets
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Cash/Bank (Asset) increases, and Bank Loan (Liability) increases simultaneously.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #799
Rent paid in advance is considered a(n):
A. Expense
B. Income
C. Asset
D. Liability
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Prepaid expenses are considered assets because they provide future economic benefits to the business.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #800
What is the correct journal entry for interest on capital provided to the owner?
A. Debit Interest on Capital, Credit Capital
B. Debit Capital, Credit Interest on Capital
C. Debit Interest on Capital, Credit Cash
D. Debit P&L Account, Credit Cash
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Interest on capital is an expense (Debit), and it increases the owner's capital account (Credit).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

More Accountancy and Statistics Topics

Statistics MCQs
Today's Top Topics
Accountancy and Book Keeping 1861 Statistics 1318
Explore Subjects
Static General Knowledge 6362 Science 4430 History GK 3374 Computer 5279 Geography GK 6121
Practice Mix
Which of the following is an example of a static web page?
Select the antonym of 'ABLE'.
Select the most appropriate meaning of the idiom: 'Let off steam'.
___ you like to go out for dinner tonight?
In MS Access, a 'query' object is used to: