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 50 of 94
Question #981
Which of the following is NOT a type of budget?
A. Rolling Budget
B. Infinite Budget
C. Flexible Budget
D. Zero-Based Budget
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Flexible, Zero-Based, and Rolling are recognized budgeting techniques. There is no such concept as an 'Infinite Budget'.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #982
In cost accounting, the term 'Opportunity Cost' means:
A. The actual cost incurred
B. The benefit foregone by choosing one alternative over another
C. The depreciation cost
D. The cost of raw materials
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Opportunity cost is the potential benefit that is given up when one alternative is selected over another.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #983
Which of the following is a direct method of collecting audit evidence?
A. Inspection
B. All of the above
C. Observation
D. Inquiry
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Inquiry, observation, and inspection are all direct methods used by auditors to gather sufficient and appropriate audit evidence.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #984
The term 'Liquidity Ratio' includes:
A. Debt-Equity Ratio and Proprietary Ratio
B. Gross Profit Ratio and Net Profit Ratio
C. Stock Turnover Ratio and Debtors Turnover Ratio
D. Current Ratio and Quick Ratio
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Liquidity ratios measure the short-term solvency of a firm and include the Current Ratio and the Quick (or Acid-Test) Ratio.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #985
Which of the following is a feature of cash-based accounting?
A. Records credit transactions
B. Provides a true and fair view of financial position
C. Recognizes revenue when earned
D. Simple to maintain
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Cash-based accounting is very simple to maintain as it only records actual cash inflows and outflows, ignoring credit transactions and accruals.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #986
In the context of recent developments, what is the full form of 'Ind-AS'?
A. International Accounting Standards
B. Indian Audit Standards
C. Indian Accounting Standards
D. Internal Accounting System
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Ind-AS stands for Indian Accounting Standards, which are the standards converged with IFRS (International Financial Reporting Standards) and notified under the Companies Act.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #987
Which of the following is an example of a personal account?
A. Ramesh's Account
B. Building Account
C. Capital Account
D. Salary Account
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Ramesh's Account represents a specific person, making it a personal account. The rule is 'Debit the receiver, credit the giver'.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #988
If a partner is guaranteed a minimum profit of ₹50,000 and his share of profit is ₹40,000, the deficiency of ₹10,000 will be borne by:
A. The firm
B. The auditor
C. All partners equally
D. The guarantor partner(s)
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
The deficiency in the guaranteed profit is borne by the partner(s) who gave the guarantee, in their profit-sharing ratio for the guarantee.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #989
The primary objective of management accounting is to:
A. Calculate tax liability
B. Assist management in planning and decision-making
C. Provide information to external stakeholders
D. Ensure compliance with accounting standards
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Management accounting focuses on providing internal management with the financial and non-financial information needed for planning, controlling, and decision-making.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #990
Which of the following is a current asset?
A. Machinery
B. Goodwill
C. Prepaid Insurance
D. Building
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Prepaid insurance is a current asset because it represents an expense paid in advance that will provide a benefit within the next 12 months.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #991
In the context of taxation, the term 'Input Tax Credit' (ITC) is associated with:
A. Customs Duty
B. Corporate Tax
C. GST
D. Income Tax
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Input Tax Credit (ITC) is a mechanism under GST that allows businesses to claim credit for the tax paid on inputs against the tax payable on output.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #992
Which of the following is a fixed cost?
A. Direct labor
B. Direct material
C. Depreciation on plant
D. Power consumed
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Depreciation on plant (usually calculated on a straight-line basis) is a fixed cost as it does not vary with the level of production in the short term.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #993
The term 'Variance' in budgetary control refers to:
A. The total budget
B. The profit margin
C. The cost of production
D. The difference between budgeted and actual performance
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Variance is the difference between the budgeted (standard) cost or revenue and the actual cost or revenue, used for performance evaluation.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #994
Which of the following is a type of audit opinion?
A. All of the above
B. Qualified Opinion
C. Clean Opinion
D. Adverse Opinion
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Auditors can issue unqualified (clean), qualified, adverse, or disclaimer of opinion reports based on their findings.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #995
In financial management, the 'Cost of Capital' is:
A. The interest paid on loans
B. The minimum return required by investors
C. The total cost of setting up a business
D. The depreciation cost
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
The cost of capital is the minimum rate of return that a company must earn on its investments to satisfy its investors and creditors.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #996
Which of the following is a feature of a joint stock company?
A. Managed by partners
B. Separate legal entity
C. Unlimited liability
D. No perpetual succession
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
A joint stock company is a separate legal entity distinct from its shareholders, with perpetual succession and limited liability.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #997
The term 'Secret Reserves' are created by:
A. Showing higher profits
B. Undervaluing assets or overvaluing liabilities
C. Undervaluing liabilities
D. Overvaluing assets
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Secret reserves are created by undervaluing assets or overvaluing liabilities, which reduces reported profits and hides the true financial position.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #998
The term 'Prepaid Expense' is treated as:
A. An expense
B. An asset
C. A liability
D. A loss
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Prepaid expenses are treated as current assets because they represent future economic benefits for which payment has already been made.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #999
In partnership, the 'Sacrificing Ratio' is calculated during:
A. Admission of a partner
B. Dissolution of the firm
C. Retirement of a partner
D. Death of a partner
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
The sacrificing ratio is the ratio in which existing partners give up their share of profit in favor of the new partner upon admission.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1000
Which of the following is a feature of marginal costing?
A. It values inventory at full cost
B. It is used for external reporting
C. It includes fixed overheads in product cost
D. It distinguishes between fixed and variable costs
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Marginal costing strictly separates costs into fixed and variable components, charging only variable costs to the product.
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
Geography GK 6121 Static General Knowledge 6362 Maths 5575 Economy GK 2220 English 15164
Practice Mix
Select the most appropriate meaning of the idiom: 'A queer fish'.
x86-64 is also known as:
My eyes are tired because I ___ on the computer for hours.
He stands ___ the door.
Which railway system is designed exclusively for urban mass rapid transport?