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 6 of 94
Question #101
Accounting by Non-Profit Organizations (NPOs) usually revolves around which system?
A. Standard Costing
B. Responsibility Accounting
C. Social Accounting
D. Fund Based Accounting
Discuss
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Correct Answer: Option D

Explanation:
NPOs use fund-based accounting where resources are categorized into specific funds based on restrictions placed by donors.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #102
A hybrid system of accounting is a mixture of:
A. Cash basis and Accrual basis
B. Financial and Cost accounting
C. Double entry and Single entry
D. Indian GAAP and IFRS
Discuss
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Correct Answer: Option A

Explanation:
In a hybrid system, typically incomes are recorded on a cash basis while expenses are recorded on an accrual basis.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #103
Which accounting system violates the matching principle?
A. Cash System
B. Accrual System
C. Mercantile System
D. Fund-based System
Discuss
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Correct Answer: Option A

Explanation:
The cash system violates the matching principle because it does not match the revenues of a specific period with the expenses incurred to generate them.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #104
Government accounting in India primarily follows which system of accounting for its core budgets?
A. Target Costing
B. Accrual Basis
C. Mercantile Basis
D. Cash Basis
Discuss
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Correct Answer: Option D

Explanation:
Historically, Indian government accounting is primarily cash-based, tracking the actual flow of funds into and out of government treasuries.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #105
Social accounting is primarily concerned with:
A. Calculating national income and economic performance of the country
B. Minimizing corporate taxes
C. Recording petty cash expenses
D. Maximizing shareholder wealth
Discuss
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Correct Answer: Option A

Explanation:
At a macro level, social accounting (or national income accounting) measures the economic activity, income, and expenditure of a nation.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #106
Which concept attempts to measure the cost and benefits of a firm's activities to the society?
A. Inflation Accounting
B. Human Resource Accounting
C. Forensic Accounting
D. Corporate Social Responsibility (CSR) Accounting
Discuss
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Correct Answer: Option D

Explanation:
CSR/Social accounting at the micro level identifies and measures the net social contribution of a business organization.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #107
A Value Added Statement is an important component of:
A. Cost Sheet
B. Social Accounting
C. Cash Flow Statement
D. Bank Reconciliation
Discuss
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Correct Answer: Option B

Explanation:
A Value Added Statement shows how much wealth the company has created and how it is distributed among employees, government, providers of capital, and retained earnings.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #108
In Social Accounting, an 'externality' refers to:
A. Outsourced services
B. Uncompensated impact of a firm's actions on third parties
C. External auditors
D. Foreign exchange transactions
Discuss
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Correct Answer: Option B

Explanation:
Externalities (like pollution) are costs or benefits affecting society that are not reflected in traditional financial statements.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #109
Which metric evaluates the financial value of the social and environmental outcomes created by an organization?
A. Social Return on Investment (SROI)
B. Internal Rate of Return (IRR)
C. Earnings Per Share (EPS)
D. Return on Capital Employed (ROCE)
Discuss
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Correct Answer: Option A

Explanation:
SROI is a method for measuring values not traditionally reflected in financial statements, assessing social and environmental impact.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #110
Social audit differs from financial audit mainly because:
A. It focuses solely on tax evasion
B. It is done on a daily basis
C. It examines social impact and ethical behavior rather than just financial accuracy
D. It is always conducted by the CAG
Discuss
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Correct Answer: Option C

Explanation:
A social audit evaluates how well a company is achieving its social objectives and its impact on the community and environment.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #111
Which system of book-keeping is technically referred to as 'Accounting from Incomplete Records'?
A. Management Accounting
B. Double Entry System
C. Accrual System
D. Single Entry System
Discuss
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Correct Answer: Option D

Explanation:
Single entry system does not maintain a complete record of the dual aspect of every transaction, leading to incomplete records.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #112
To ascertain profit under the Single Entry System (Statement of Affairs method), closing capital is compared with:
A. Total Assets
B. Cash Balance
C. Opening Capital
D. Total Liabilities
Discuss
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Correct Answer: Option C

Explanation:
Profit or loss is determined by comparing the capital at the end of the year with the capital at the beginning, adjusted for drawings and fresh capital.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #113
Under the single entry system, if Closing Capital is Rs 50,000, Opening Capital is Rs 30,000, and Drawings are Rs 10,000, what is the profit?
A. Rs 40,000
B. Rs 10,000
C. Rs 30,000
D. Rs 20,000
Discuss
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Correct Answer: Option C

Explanation:
Profit = Closing Capital + Drawings - Opening Capital = 50,000 + 10,000 - 30,000 = Rs 30,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #114
In a single entry system, what account is prepared to find out the figure of credit sales?
A. Total Creditors Account
B. Cash Book
C. Total Debtors Account
D. Trading Account
Discuss
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Correct Answer: Option C

Explanation:
A Total Debtors Account is constructed. The balancing figure (usually on the debit side) reveals the credit sales during the period.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #115
Statement of Affairs resembles a:
A. Balance Sheet
B. Trial Balance
C. Profit & Loss Account
D. Cash Book
Discuss
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Correct Answer: Option A

Explanation:
A Statement of Affairs is a list of assets and liabilities, structured exactly like a Balance Sheet, used to estimate capital.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #116
Which of the following is a major limitation of the Single Entry System?
A. It is mandatory for multinational corporations
B. It requires highly qualified chartered accountants
C. It is too complex to maintain
D. Trial balance cannot be prepared to check arithmetical accuracy
Discuss
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Correct Answer: Option D

Explanation:
Since both aspects (debit and credit) are not recorded, a Trial Balance cannot be extracted, making it vulnerable to undetected errors.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #117
PFMS stands for:
A. Public Fund Monitoring System
B. Private Financial Management Scheme
C. Public Financial Management System
D. Public Finance and Monetary System
Discuss
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Correct Answer: Option C

Explanation:
PFMS is the Public Financial Management System administered by the Department of Expenditure, Ministry of Finance, Government of India.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #118
The primary objective of PFMS in India is to facilitate:
A. Printing of currency notes
B. Stock market regulation
C. Collection of corporate taxes
D. Just-in-time release of funds and end-to-end tracking of public funds
Discuss
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Correct Answer: Option D

Explanation:
PFMS ensures transparency, tracking of fund utilization down to the lowest level, and Direct Benefit Transfers directly into beneficiaries' accounts.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #119
Under PFMS, the transfer of subsidies directly to the bank accounts of beneficiaries is known as:
A. IMPS
B. NEFT
C. RTGS
D. Direct Benefit Transfer (DBT)
Discuss
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Correct Answer: Option D

Explanation:
DBT aims to transfer benefits and subsidies directly to the Aadhaar-seeded bank accounts of the beneficiaries, eliminating middlemen.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #120
PFMS is managed and implemented by:
A. NITI Aayog
B. Controller General of Accounts (CGA)
C. Reserve Bank of India (RBI)
D. Comptroller and Auditor General (CAG)
Discuss
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Correct Answer: Option B

Explanation:
The Controller General of Accounts (CGA) under the Ministry of Finance administers the PFMS portal.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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