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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Total Questions

Practice Questions

Page 54 of 94
Question #1061
A partner who does not actively participate in the business but is liable to third parties is called:
A. Secret partner
B. Partner by estoppel
C. Sleeping partner
D. Nominal partner
Discuss
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Correct Answer: Option C

Explanation:
Sleeping or dormant partner contributes capital but does not take part in management; still has unlimited liability.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1062
The Indian Partnership Act that governs general partnerships is of the year:
A. 1956
B. 2013
C. 1930
D. 1932
Discuss
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Correct Answer: Option D

Explanation:
The Indian Partnership Act was enacted in 1932.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1063
A 'Partnership Deed' contains:
A. Only the name of the firm
B. Only profit sharing ratio
C. Only capital contributions
D. Terms and conditions of partnership
Discuss
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Correct Answer: Option D

Explanation:
It is a written agreement that includes all terms like profit sharing, interest on capital, salary, etc.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1064
If a partner's capital account shows a debit balance at the end, it means:
A. Partner has withdrawn less
B. The partner owes money to the firm
C. The firm owes money to the partner
D. Partner has made profit
Discuss
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Correct Answer: Option B

Explanation:
A debit balance in a partner's capital (current) account indicates a net debit, i.e., the partner is indebted to the firm.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1065
In the absence of a partnership deed, interest on drawings is:
A. Charged at 6% p.a.
B. Not charged
C. Charged at bank rate
D. Charged at 10% p.a.
Discuss
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Correct Answer: Option B

Explanation:
According to Partnership Act, no interest is charged on drawings unless agreed upon.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1066
The 'Contingent Liability' for a pending lawsuit is shown in the balance sheet as:
A. A provision
B. A note to accounts
C. Capital reserve
D. Current liability
Discuss
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Correct Answer: Option B

Explanation:
It is not recognised as a liability but disclosed by way of a note.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1067
The 'Prudence Concept' is also known as:
A. Materiality
B. Conservatism
C. Accrual
D. Consistency
Discuss
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Correct Answer: Option B

Explanation:
Prudence (conservatism) means anticipating no profits but providing for all possible losses.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1068
An amount paid for 'Goodwill' on purchase of a business is classified as:
A. Current asset
B. Fictitious asset
C. Deferred revenue expenditure
D. Intangible asset
Discuss
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Correct Answer: Option D

Explanation:
Purchased goodwill is an intangible asset.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1069
A 'Journal Voucher' is prepared for:
A. Cash received from debtors
B. Credit sales
C. Cash purchases
D. Payment of wages
Discuss
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Correct Answer: Option B

Explanation:
Credit sales do not involve immediate cash; hence recorded by a journal voucher (non-cash transfer voucher).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1070
In a computerised accounting system, the 'Voucher Type' defines:
A. The user
B. The printer to be used
C. The password
D. The nature of transaction (e.g., receipt, payment, contra)
Discuss
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Correct Answer: Option D

Explanation:
Voucher type categorises transactions for processing and posting.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1071
The petty cash book is balanced:
A. At the end of the year
B. At the end of the month
C. Daily
D. When it is replenished
Discuss
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Correct Answer: Option D

Explanation:
Under imprest system, petty cash book is closed when cash is replenished, not periodically.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1072
Which of the following is an advantage of the double entry system?
A. Complete and reliable records
B. Low cost
C. Simplicity
D. No errors
Discuss
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Correct Answer: Option A

Explanation:
Double entry provides a complete record and facilitates detection of errors through trial balance.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1073
A 'Ledger Account' is balanced at the end of the accounting period to find:
A. Total purchases
B. Net profit
C. Gross profit
D. Net balance (debit or credit)
Discuss
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Correct Answer: Option D

Explanation:
Balancing an account means finding the difference between debit and credit totals.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1074
When a trial balance does not tally, the difference is transferred to:
A. Profit and Loss account
B. Capital account
C. Suspense account
D. Drawings account
Discuss
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Correct Answer: Option C

Explanation:
A suspense account is opened to temporarily park the difference.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1075
The 'Trial Balance' is a:
A. Statement
B. Subsidiary book
C. Memorandum book
D. Principal book
Discuss
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Correct Answer: Option A

Explanation:
It is a statement, not a book of accounts.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1076
Which error will cause a mismatch in trial balance?
A. Error of omission of a transaction completely
B. Posting a correct amount on the wrong side of an account
C. Compensating errors
D. Error of principle
Discuss
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Correct Answer: Option B

Explanation:
Posting on the wrong side causes one side to be more/less, making totals unequal.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1077
In the Trading Account, 'Consumable Stores' used in production are:
A. Debited to P&L Account
B. Debited to Trading Account
C. Shown as asset
D. Ignored
Discuss
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Correct Answer: Option B

Explanation:
Consumable stores are direct materials, so they are debited to Trading Account.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1078
The 'Profit & Loss Account' begins with:
A. Capital
B. Opening stock
C. Net sales
D. Gross profit or gross loss brought down from Trading Account
Discuss
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Correct Answer: Option D

Explanation:
Gross profit is transferred to the credit side of P&L Account; gross loss to debit side.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1079
A company's preliminary expenses written off is shown in:
A. Balance Sheet
B. Not shown
C. Trading Account
D. Profit & Loss Account
Discuss
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Correct Answer: Option D

Explanation:
Written off portion is charged to P&L Account as an expense.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1080
In Balance Sheet, 'Bills Receivable' is a:
A. Intangible asset
B. Fixed asset
C. Current asset
D. Current liability
Discuss
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Correct Answer: Option C

Explanation:
Bills receivable are amounts due from debtors within a short period, hence current assets.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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