Accountancy MCQs | Chapter-wise Multiple Choice Questions with Answers

Question #1101

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The 'Integrated Accounting' system means:

A. Maintaining a single set of books for both cost and financial accounting

B. Integrating tax and accounts

C. Keeping cost and financial accounts separately

D. Using manual and computer together

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Correct Answer: Option A

Explanation:
Integrated system avoids separate ledgers, using common accounts for both purposes.

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Question #1102

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In India, the new 'Income Tax Bill' 2025 aims to:

A. Abolish all exemptions

B. Increase tax rates

C. Simplify and consolidate the income tax law

D. Replace GST

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Correct Answer: Option C

Explanation:
The proposed bill seeks to simplify the language and structure of the Income Tax Act.

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Question #1103

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The 'One Person Company' (OPC) concept was introduced in India by:

A. GST Act

B. Income Tax Act

C. Companies Act, 1956

D. Companies Act, 2013

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Correct Answer: Option D

Explanation:
OPC was introduced by Companies Act, 2013 to allow single entrepreneurs to have corporate status.

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Question #1104

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The 'Limited Liability Partnership' (LLP) is governed by:

A. Partnership Act, 1932

B. Limited Liability Partnership Act, 2008

C. Indian Contract Act

D. Companies Act, 2013

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Correct Answer: Option B

Explanation:
LLP is a separate legal entity governed by LLP Act, 2008.

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Question #1105

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Which of the following is a 'Revenue Reserve'?

A. Capital redemption reserve

B. General reserve

C. Investment allowance reserve

D. Debenture redemption reserve

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Correct Answer: Option B

Explanation:
General reserve is created out of revenue profits; others are specific reserves.

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Question #1106

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The journal entry for transferring 'Net Profit' to capital account is:

A. Capital A/c Dr. To Profit & Loss A/c

B. Profit & Loss A/c Dr. To Capital A/c

C. Profit & Loss Appropriation A/c Dr. To Capital A/c

D. Drawings A/c Dr. To Capital A/c

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Correct Answer: Option B

Explanation:
Net profit is closed by debiting Profit & Loss A/c and crediting Capital A/c (or Retained Earnings for companies).

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Question #1107

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In the journal, 'L.F.' stands for:

A. Liability Factor

B. Long Form

C. Liquidity Fund

D. Ledger Folio

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Correct Answer: Option D

Explanation:
L.F. column indicates the page number of the ledger where the account is posted.

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Question #1108

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The 'Purchase Returns Book' records:

A. Credit purchases

B. Goods returned to suppliers

C. Cash purchases

D. Goods returned by customers

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Correct Answer: Option B

Explanation:
Purchase returns (returns outward) are recorded in this subsidiary book.

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Question #1109

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A 'Debit Note' is sent by the buyer when returning goods to the supplier. It is used to:

A. Inform the supplier that his account has been debited

B. Inform the supplier that his account has been credited

C. Record sales return

D. Record cash receipt

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Correct Answer: Option A

Explanation:
The debit note informs the supplier that the buyer has debited the supplier's account.

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Question #1110

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The 'Sales Book' total is posted to:

A. Credit side of Debtors Account

B. Credit side of Sales Account

C. Debit side of Creditors Account

D. Debit side of Sales Account

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Correct Answer: Option B

Explanation:
Sales book total is credited to Sales Account (revenue) and individual debtors are debited.

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Question #1111

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The 'Impersonal Accounts' are further classified into:

A. Natural and Artificial

B. Representative and Personal

C. Real and Nominal

D. Current and Non-current

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Correct Answer: Option C

Explanation:
Impersonal accounts include real (assets) and nominal (expenses/losses, incomes/gains).

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Question #1112

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A 'Voucher' that records a transaction involving both cash and bank is called:

A. Payment voucher

B. Contra voucher

C. Receipt voucher

D. Journal voucher

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Correct Answer: Option B

Explanation:
Contra vouchers record transactions like cash deposited into bank or withdrawn from bank.

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Question #1113

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In BRS, if the cash book shows a bank balance of ₹10,000 (Dr.) and there is an unpresented cheque of ₹2,000, the passbook balance will be:

A. ₹12,000

B. ₹10,000

C. ₹8,000

D. ₹2,000

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Correct Answer: Option A

Explanation:
Unpresented cheque has been deducted in cash book but not in passbook. So passbook balance = Cash book balance + Unpresented cheque = 10,000 + 2,000 = ₹12,000.

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Question #1114

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A bank directly credits interest ₹500 and debits charges ₹100. The net effect to be adjusted in cash book while reconciling from cash book to passbook is:

A. Add ₹500 and deduct ₹100

B. Add ₹500 only

C. Add ₹400

D. Deduct ₹400

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Correct Answer: Option C

Explanation:
Net effect = 500 credit - 100 debit = +400. So add ₹400 to cash book balance.

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Question #1115

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In the financial statements of a non-profit organisation, 'Capital Fund' is equivalent to:

A. Current liabilities

B. Owner's equity (net worth)

C. Share capital

D. Partners' capital

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Correct Answer: Option B

Explanation:
Capital fund represents the accumulated surplus and contributions, i.e., the net worth.

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Question #1116

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Subscription received in advance for a non-profit organisation is shown in the Balance Sheet as:

A. Income

B. Asset

C. Liability

D. Expenditure

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Correct Answer: Option C

Explanation:
It is a liability because it pertains to the future period.

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Question #1117

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A 'Endowment Fund' received by a non-profit organisation is treated as:

A. Expense

B. Income

C. Revenue receipt

D. Capital receipt

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Correct Answer: Option D

Explanation:
Endowment fund is a capital receipt, usually invested, and only the income is used.

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Question #1118

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In the preparation of Income and Expenditure Account, outstanding expenses at the end are:

A. Added to the respective expense

B. Ignored

C. Shown as income

D. Deducted from the respective expense

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Correct Answer: Option A

Explanation:
Outstanding expenses increase the total expense for the period.

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Question #1119

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A firm's working capital is ₹50,000, current ratio 2.5:1. Its quick ratio is 1.5:1. Inventory value is:

A. ₹25,000

B. ₹40,000

C. ₹30,000

D. ₹20,000

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Correct Answer: Option B

Explanation:
WC = CA - CL = 60,000. CA/CL = 3 => CA = 3CL. So 3CL - CL = 60,000 => 2CL = 60,000 => CL = 30,000, CA = 90,000. QA/CL = 1 => QA = 30,000. Inventory = CA - QA = 90,000 - 30,000 = ₹60,000.

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Question #1120

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Which of the following is not a financial statement?

A. Trial Balance

B. Balance Sheet

C. Cash Flow Statement

D. Profit & Loss Account

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Correct Answer: Option A

Explanation:
Trial balance is a working paper, not a financial statement.

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