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 41 of 94
Question #801
When goods costing Rs 10,000 are sold for Rs 15,000 in cash, the journal entry includes a credit to Sales Account by:
A. Rs 5,000
B. Rs 25,000
C. Rs 10,000
D. Rs 15,000
Discuss
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Correct Answer: Option D

Explanation:
Sales account is always credited with the selling price (invoice value), which is Rs 15,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #802
If a debtor becomes insolvent and only 60 paise in a rupee is recovered from his debt of Rs 5,000, the Bad Debts account is debited by:
A. Rs 2,000
B. Rs 5,000
C. Rs 8,000
D. Rs 3,000
Discuss
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Correct Answer: Option A

Explanation:
Amount recovered = 60% of 5,000 = Rs 3,000. The irrecoverable amount (Bad Debt) is 40% of 5,000 = Rs 2,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #803
Goods given away as charity should be credited to:
A. Charity Account
B. Cash Account
C. Purchases Account
D. Sales Account
Discuss
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Correct Answer: Option C

Explanation:
Donating goods reduces the stock of purchased goods. Thus, the Purchases account is credited at cost price.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #804
The journal entry for income tax paid by a sole proprietor from the business bank account is:
A. Debit P&L Account, Credit Bank
B. Debit Capital, Credit Income Tax
C. Debit Drawings, Credit Bank
D. Debit Income Tax, Credit Bank
Discuss
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Correct Answer: Option C

Explanation:
For a sole trader, income tax is a personal expense. Paying it from business funds is treated as Drawings.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #805
An opening journal entry is passed to:
A. Record the first transaction of the year
B. Bring forward the balances of assets, liabilities, and capital from the previous year
C. Close nominal accounts
D. Adjust closing stock
Discuss
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Correct Answer: Option B

Explanation:
The opening entry records the closing balances of real and personal accounts from the previous year into the new books.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #806
Which type of voucher is used to record a transaction that does not involve cash or bank at all?
A. Journal Voucher
B. Payment Voucher
C. Credit Voucher
D. Debit Voucher
Discuss
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Correct Answer: Option A

Explanation:
A Journal Voucher (or Non-Cash/Transfer Voucher) is used for credit purchases, credit sales, depreciation, and adjusting entries.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #807
A 'Pay-in-slip' is a source document used for:
A. Paying wages to employees
B. Recording petty cash expenses
C. Depositing cash or cheques into the bank
D. Withdrawing cash from the bank
Discuss
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Correct Answer: Option C

Explanation:
A pay-in-slip is filled out by a customer when depositing money or cheques into their bank account.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #808
Which of the following serves as the source document for a Sales Return journal?
A. Debit Note
B. Purchase Invoice
C. Cash Memo
D. Credit Note
Discuss
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Correct Answer: Option D

Explanation:
A Credit Note is sent to a customer when goods are returned, indicating that their account has been credited (reduced).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #809
In accounting, what does the term 'Vouching' fundamentally imply?
A. Substantiating entries with documentary evidence
B. Filing tax returns
C. Calculating totals
D. Creating financial forecasts
Discuss
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Correct Answer: Option A

Explanation:
Vouching is the process of examining documentary evidence to ascertain the accuracy and authenticity of accounting entries.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #810
A petty cash voucher is authorized by:
A. The petty cashier or an authorized manager
B. The payee
C. The external auditor
D. The bank manager
Discuss
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Correct Answer: Option A

Explanation:
For internal control, petty cash vouchers must be authorized by a responsible official before disbursement is made.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #811
When preparing a BRS starting with an overdraft as per the Pass Book, checks deposited but not yet cleared should be:
A. Divided
B. Added
C. Deducted
D. Ignored
Discuss
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Correct Answer: Option B

Explanation:
Deposited checks lower the Cash Book overdraft. To make the Pass Book overdraft match the lower Cash Book overdraft, the amount must be added (reducing the negative balance).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #812
In a BRS, bank charges recorded twice in the Cash Book will result in:
A. No difference
B. Cash Book balance being lower than Pass Book balance
C. Cash Book balance being higher than Pass Book balance
D. Pass Book balance being lower than Cash Book
Discuss
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Correct Answer: Option B

Explanation:
Recording an expense twice in the Cash Book excessively reduces its balance, making it lower than the actual Pass Book balance.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #813
A direct collection of a dividend by the bank on behalf of the customer, not recorded in the Cash Book, will require:
A. Deduction from Cash Book balance
B. Addition to Pass Book balance to reach Cash Book balance
C. Deduction from Pass Book balance to reach Cash Book balance
D. No adjustment in BRS
Discuss
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Correct Answer: Option C

Explanation:
The collection increases the Pass Book balance. To reach the un-updated Cash Book balance, this amount must be deducted from the Pass Book.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #814
If a cheque of Rs 1,000 is issued but recorded in the cash column of the Cash Book instead of the bank column, what is the effect on the bank balance?
A. Cash balance is overstated
B. No effect on any balance
C. Bank balance in Cash Book is understated by Rs 1,000
D. Bank balance in Cash Book is overstated by Rs 1,000
Discuss
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Correct Answer: Option D

Explanation:
Since the bank column was not reduced (credited), the bank balance as per the Cash Book remains artificially high (overstated).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #815
What is an 'amended cash book' in the context of BRS?
A. A cash book updated for bank errors
B. A cash book used only for petty expenses
C. A cash book prepared by the bank
D. A cash book updated with missing transactions and rectifications before preparing BRS
Discuss
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Correct Answer: Option D

Explanation:
An amended cash book adjusts for items like direct deposits, bank charges, and clerical errors in the cash book before reconciling timing differences.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #816
A favorable balance as per Pass Book means:
A. Overdraft
B. Debit balance
C. Credit balance
D. Nil balance
Discuss
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Correct Answer: Option C

Explanation:
From the bank's perspective, customer deposits are liabilities. A positive (favorable) balance is therefore a credit balance in the Pass Book.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #817
Which of the following errors will cause the Trial Balance to disagree?
A. Complete omission of a transaction
B. Posting Rs 500 to the debit of Machinary instead of Wages
C. Recording a transaction in the wrong subsidiary book
D. Casting the Sales Return book short by Rs 100
Discuss
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Correct Answer: Option D

Explanation:
Short casting (undercasting) a subsidiary book affects only one side of the ledger, resulting in a mismatch in the Trial Balance.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #818
If goods worth Rs 2,000 returned to a supplier are not recorded at all, this error is called:
A. Error of Omission
B. Error of Principle
C. Error of Commission
D. Compensating Error
Discuss
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Correct Answer: Option A

Explanation:
A complete failure to record a transaction in the books of original entry is an error of complete omission.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #819
A suspense account with a credit balance indicates that:
A. Total of credit column of Trial Balance was higher
B. Assets exceed liabilities
C. Total of debit column of Trial Balance was higher
D. Profit is overstated
Discuss
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Correct Answer: Option C

Explanation:
To force the Trial Balance to tally, a credit balance is placed in the suspense account to compensate for a heavier debit side.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #820
Rectifying an error of entering Rs 800 as Rs 80 in the Sales Book involves:
A. Debiting Suspense A/c by Rs 720
B. Debiting Sales A/c by Rs 720
C. Crediting Suspense A/c by Rs 720
D. Crediting Sales A/c by Rs 720 and Debiting Customer A/c by Rs 720
Discuss
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Correct Answer: Option D

Explanation:
Since it was undercast by Rs 720 in the original book, both the Customer (Debit) and Sales (Credit) accounts need to be increased by Rs 720.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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