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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Practice Questions

Page 58 of 94
Question #1141
The 'Cash Book' serves as:
A. Only a ledger
B. Both journal and ledger for cash transactions
C. A subsidiary book for all transactions
D. Only a journal
Discuss
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Correct Answer: Option B

Explanation:
Cash book records all cash and bank transactions, functioning as journal (original entry) and ledger.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1142
Which of the following is not recorded in the Cash Book?
A. Credit purchases
B. Cash purchases
C. Cash sales
D. Bank charges
Discuss
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Correct Answer: Option A

Explanation:
Credit purchases are recorded in purchase book, not cash book.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1143
A 'Contra Entry' in the cash book involves:
A. Only bank column
B. Cash and bank columns only
C. Bank and discount columns
D. Cash and discount columns
Discuss
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Correct Answer: Option B

Explanation:
Contra entries affect both cash and bank columns (e.g., cash deposited, cash withdrawn).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1144
The 'Discount Column' in the three-column cash book is:
A. Used only for bank reconciliation
B. Only totalled and then posted to ledger
C. Not used
D. Balanced
Discuss
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Correct Answer: Option B

Explanation:
Discount columns are not balanced; their totals are posted to discount allowed/received accounts.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1145
An audit that is conducted between two annual audits is called:
A. Statutory audit
B. Interim audit
C. Continuous audit
D. Final audit
Discuss
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Correct Answer: Option B

Explanation:
Interim audit is performed in between the year, often for dividend declaration or half-yearly results.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1146
The 'Audit Programme' is:
A. The final accounts
B. A list of audit procedures to be performed
C. The trial balance
D. The audit report
Discuss
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Correct Answer: Option B

Explanation:
Audit programme details the steps and procedures for conducting the audit.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1147
'Internal Control' is the responsibility of:
A. Shareholders
B. Auditor
C. Government
D. Management
Discuss
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Correct Answer: Option D

Explanation:
Management is responsible for establishing and maintaining internal controls.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1148
The 'Voucher' approach in accounting helps to:
A. Simplify journal entries
B. Ensure documentation and authorisation of transactions
C. Compute tax
D. Prepare trial balance
Discuss
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Correct Answer: Option B

Explanation:
Voucher system ensures that every transaction is supported by documentary evidence and approval.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1149
A 'Supporting Voucher' is also known as:
A. Transfer voucher
B. Cash voucher
C. Source document
D. Journal voucher
Discuss
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Correct Answer: Option C

Explanation:
Source documents like bills, receipts support the transaction.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1150
The 'Accounting Voucher' is prepared on the basis of:
A. Trial balance
B. Final accounts
C. Ledger accounts
D. Supporting vouchers
Discuss
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Correct Answer: Option D

Explanation:
Accounting vouchers (debit/credit/transfer) are prepared from source documents.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1151
In a computerised accounting system, the 'Voucher Entry' screen is used to:
A. Set passwords
B. Create backup
C. View reports
D. Record transactions
Discuss
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Correct Answer: Option D

Explanation:
Voucher entry is the primary data input interface.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1152
The 'Suspense Account' is opened when:
A. Final accounts are prepared
B. Trial balance does not agree
C. An asset is sold
D. A fraud is detected
Discuss
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Correct Answer: Option B

Explanation:
It holds the difference in trial balance until errors are located.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1153
The 'Trial Balance' includes:
A. Only real and nominal accounts
B. Only personal account balances
C. Only nominal accounts
D. Balances of all ledger accounts
Discuss
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Correct Answer: Option D

Explanation:
It lists all ledger balances irrespective of account type.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1154
If the total of debit side of trial balance is ₹1,50,000 and credit side is ₹1,45,000, the suspense account will be:
A. Debit ₹1,45,000
B. Credit ₹5,000
C. Credit ₹1,50,000
D. Debit ₹5,000
Discuss
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Correct Answer: Option B

Explanation:
Credit side is short by ₹5,000, so suspense account is credited to balance.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1155
A trader sells goods costing ₹20,000 for ₹25,000. The gross profit margin is:
A. 20%
B. 20% on sales? Actually profit 5,000 on sales 25,000 = 20%.
C. 25%
D. None
Discuss
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Correct Answer: Option A

Explanation:
Gross profit = 5,000. Gross profit ratio on sales = (5,000/25,000)*100 = 20%.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1156
In the Trading Account, 'Wages' paid for production are:
A. Debited
B. Credited
C. Not included
D. Shown as liability
Discuss
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Correct Answer: Option A

Explanation:
Wages are direct expenses, debited to Trading Account.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1157
The 'Net Profit' is transferred to:
A. Balance Sheet liability side
B. Drawings Account
C. Trading Account
D. Capital Account (or Retained Earnings)
Discuss
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Correct Answer: Option D

Explanation:
Net profit is added to owner's capital or retained earnings.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1158
In the Balance Sheet, 'Patents' are shown under:
A. Fixed assets – Intangible
B. Investments
C. Current liabilities
D. Current assets
Discuss
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Correct Answer: Option A

Explanation:
Patents are intangible fixed assets.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1159
'Capital Work-in-Progress' is shown in the Balance Sheet as:
A. Intangible asset
B. Investment
C. Fixed asset under construction
D. Current asset
Discuss
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Correct Answer: Option C

Explanation:
It represents assets not yet ready for use, part of fixed assets.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1160
The 'Cash Basis' of accounting is primarily used by:
A. Large companies
B. Only non-profits
C. Government and small professionals
D. All entities
Discuss
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Correct Answer: Option C

Explanation:
Government accounts are cash-based; some small professionals may use it.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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