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 47 of 94
Question #921
Goods withdrawn by the owner for personal use should be credited to:
A. Sales Account
B. Drawings Account
C. Capital Account
D. Purchases Account
Discuss
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Correct Answer: Option D

Explanation:
When goods are withdrawn for personal use, the Purchases Account is credited to reduce the cost of goods available for sale, and Drawings is debited.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #922
The account which is never closed is called:
A. Nominal Account
B. Personal Account
C. Outstanding Account
D. Real Account
Discuss
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Correct Answer: Option D

Explanation:
Real accounts represent assets and properties. They are permanent accounts and their balances are carried forward to the next year, never closed.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #923
In the Indian Financial Management System, the Consolidated Fund of India is operated by:
A. The Prime Minister
B. The President of India
C. The Finance Minister
D. The RBI Governor
Discuss
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Correct Answer: Option B

Explanation:
All revenues received by the Government of India and all loans raised are credited to the Consolidated Fund, which is operated by the President.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #924
Which concept assumes that the business will continue to exist indefinitely?
A. Going Concern Concept
B. Accrual Concept
C. Consistency Concept
D. Materiality Concept
Discuss
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Correct Answer: Option A

Explanation:
The Going Concern concept assumes that the enterprise will continue its operations for the foreseeable future with no intention to liquidate.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #925
If opening stock is ₹20,000, purchases are ₹80,000, and closing stock is ₹15,000, what is the cost of goods sold?
A. ₹1,00,000
B. ₹85,000
C. ₹1,15,000
D. ₹95,000
Discuss
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Correct Answer: Option B

Explanation:
COGS = Opening Stock + Purchases - Closing Stock = 20,000 + 80,000 - 15,000 = ₹85,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #926
Which of the following is an intangible asset?
A. Furniture
B. Goodwill
C. Machinery
D. Building
Discuss
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Correct Answer: Option B

Explanation:
Goodwill is an intangible asset because it lacks physical substance but adds value to the business.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #927
In a bank reconciliation statement, if we start with the overdraft balance as per the pass book, cheques deposited but not credited will be:
A. Added
B. Deducted
C. Ignored
D. Doubled
Discuss
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Correct Answer: Option B

Explanation:
Cheques deposited but not credited increase the cash book balance but not the pass book balance. To reconcile from pass book overdraft, they must be deducted to increase the overdraft amount.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #928
The gross profit ratio is 25%. If sales are ₹4,00,000, what is the cost of goods sold?
A. ₹5,00,000
B. ₹3,00,000
C. ₹4,00,000
D. ₹1,00,000
Discuss
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Correct Answer: Option B

Explanation:
Gross Profit = 25% of 4,00,000 = ₹1,00,000. COGS = Sales - Gross Profit = 4,00,000 - 1,00,000 = ₹3,00,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #929
In the context of PFMS, what does 'Aadhaar Payment Bridge System' (APBS) facilitate?
A. Stock market trading
B. Direct Benefit Transfer using Aadhaar
C. Bank auditing
D. Tax collection
Discuss
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Correct Answer: Option B

Explanation:
APBS facilitates Direct Benefit Transfers (DBT) by using the Aadhaar number as the central key for routing government subsidies to beneficiaries.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #930
Which accounting standard deals with the presentation of financial statements?
A. AS 10
B. AS 9
C. AS 2
D. AS 1
Discuss
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Correct Answer: Option D

Explanation:
AS 1 'Disclosure of Accounting Policies' deals with the classification and presentation of financial statements and the disclosure of accounting policies.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #931
Under the partnership act, in the absence of a deed, the profit sharing ratio is:
A. Based on service rendered
B. Equal
C. Based on capital contribution
D. Determined by the court
Discuss
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Correct Answer: Option B

Explanation:
The Indian Partnership Act, 1932, states that if there is no partnership deed, profits and losses must be shared equally among all partners.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #932
Which of the following is NOT a limitation of financial accounting?
A. Provides data for tax assessment
B. Ignores price level changes
C. Subject to estimation and judgment
D. Ignores qualitative aspects
Discuss
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Correct Answer: Option A

Explanation:
Providing data for tax assessment is a utility of financial accounting, not a limitation. The others are recognized limitations.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #933
The term 'Amalgamation' in partnership refers to:
A. Combination of two or more partnership firms
B. Dissolution of the firm
C. Retirement of a partner
D. Insolvency of a partner
Discuss
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Correct Answer: Option A

Explanation:
Amalgamation occurs when two or more existing partnership firms decide to merge their businesses into a new partnership firm.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #934
Which book of original entry is used for recording the purchase of assets on credit?
A. Cash Book
B. Sales Book
C. Journal Proper
D. Purchases Book
Discuss
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Correct Answer: Option C

Explanation:
The Purchases Book only records credit purchases of trading goods. Credit purchases of assets are recorded in the Journal Proper.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #935
In a cash flow statement, interest paid on debentures is classified under:
A. Investing Activities
B. Extraordinary Activities
C. Financing Activities
D. Operating Activities
Discuss
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Correct Answer: Option C

Explanation:
Interest paid on debentures represents a return on capital provided by debentureholders, hence it is classified under Financing Activities.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #936
Which of the following is an example of a deferred revenue expenditure?
A. Heavy advertising campaign for a new product launch
B. Payment of rent
C. Purchase of machinery
D. Payment of salary
Discuss
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Correct Answer: Option A

Explanation:
A heavy advertising campaign for a new product provides benefits over multiple years, making it a deferred revenue expenditure.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #937
The objective of social audit is to:
A. Maximize profits
B. Detect financial frauds
C. Assess the social impact of an organization's activities
D. Ensure compliance with tax laws
Discuss
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Correct Answer: Option C

Explanation:
Social audit evaluates how well an organization achieves its social and environmental goals, assessing its broader impact on society.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #938
In the Indian financial system, SEBI regulates:
A. Banking sector
B. Foreign exchange
C. Capital markets
D. Insurance sector
Discuss
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Correct Answer: Option C

Explanation:
The Securities and Exchange Board of India (SEBI) is the regulatory body for the securities and capital markets in India.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #939
Which of the following is NOT a step in the accounting cycle?
A. Preparing a trial balance
B. Preparing a budget
C. Journalizing
D. Posting
Discuss
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Correct Answer: Option B

Explanation:
Budgeting is a management accounting tool for planning, not a step in the standard financial accounting cycle which ends with financial statements.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #940
If the current ratio is 2:1, which of the following transactions will increase the ratio?
A. Paid cash to creditors
B. Purchased goods on credit
C. Sold goods on credit
D. Issued debentures
Discuss
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Correct Answer: Option C

Explanation:
Selling goods on credit increases current assets (debtors) without affecting current liabilities, thereby increasing a current ratio that is already greater than 1.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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