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 76 of 94
Question #1501
A GST registered person purchased goods worth ₹1,18,000 (inclusive of GST @ 18%) and sold the same for ₹1,77,000 (inclusive of GST @ 18%). The net GST payable (output - input credit) is:
A. ₹10,800
B. ₹9,000
C. ₹18,000
D. ₹27,000
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Input GST = 1,18,000 * 18/118 = ₹18,000. Output GST = 1,77,000 * 18/118 = ₹27,000. Net payable = 27,000 - 18,000 = ₹9,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1502
The 'Threshold Limit' for mandatory e-invoicing under GST for B2B transactions is aggregate turnover exceeding:
A. ₹20 crore
B. ₹1 crore
C. ₹10 crore
D. ₹5 crore
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
As of recent updates, e-invoicing is mandatory for aggregate turnover above ₹5 crore.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1503
In budgetary control, a 'Flexible Budget' is:
A. A budget that is fixed for the period
B. Only prepared for variable costs
C. A master budget
D. A budget that changes with the level of activity
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Flexible budget adjusts for different levels of output.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1504
The 'Budgetary Control' system involves: 1. Establishment of budgets, 2. Continuous comparison of actuals with budgets, 3. Taking corrective action, 4. Performance evaluation. Which of these are essential elements?
A. 1 and 2 only
B. 1, 2 and 3 only
C. 1, 2, 3 and 4
D. 2 and 4 only
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
All four are integral parts of budgetary control.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1505
Which of the following is not a function of cost accounting?
A. Preparation of financial statements
B. Assisting in decision making
C. Cost control
D. Ascertaining cost
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Preparation of financial statements is the function of financial accounting, not cost accounting.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1506
A factory produces 10,000 units. Variable cost per unit is ₹50; fixed cost ₹2,00,000. The selling price per unit to achieve break-even at 8,000 units is:
A. ₹70
B. ₹80
C. ₹90
D. ₹75
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
BEP units = Fixed cost / (Selling price - Variable cost). 8,000 = 2,00,000 / (SP - 50) => SP - 50 = 2,00,000/8,000 = 25 => SP = ₹75.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1507
The 'Margin of Safety' is ₹2,00,000 and the P/V ratio is 25%. The profit is:
A. ₹2,00,000
B. ₹25,000
C. ₹50,000
D. ₹8,00,000
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
Profit = Margin of safety × P/V ratio = 2,00,000 × 25% = ₹50,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1508
In 'Process Costing', normal loss is:
A. Valued at cost per unit and debited to Profit & Loss Account
B. Not recorded separately; its cost is absorbed by good units
C. Shown as an asset
D. Valued at scrap value, and cost per unit is adjusted
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Normal loss is expected; its scrap value, if any, reduces the cost of good units. The loss quantity is deducted, and cost per unit is computed on input minus normal loss.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1509
Which of the following is a 'period cost'?
A. Royalty on production
B. Rent of office building
C. Direct labour
D. Direct material
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Period costs are not tied to production volume and are expensed in the period incurred. Office rent is a period cost.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1510
In 'Standard Costing', the formula for 'Material Usage Variance' is:
A. Actual Quantity × (Standard Price - Actual Price)
B. Standard Price × (Standard Quantity - Actual Quantity)
C. Actual Price × (Standard Quantity - Actual Quantity)
D. Standard Quantity × (Standard Price - Actual Price)
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Material usage variance = SP (SQ - AQ).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1511
The 'Labour Efficiency Variance' is computed as:
A. Standard Rate × (Standard Hours - Actual Hours)
B. Standard Hours × (Standard Rate - Actual Rate)
C. Actual Hours × (Standard Rate - Actual Rate)
D. Actual Rate × (Standard Hours - Actual Hours)
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Labour efficiency variance = SR (SH - AH).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1512
A company's 'Fixed Overhead Capacity Variance' is ₹10,000 (Adverse). This means:
A. Actual fixed overheads were higher
B. Efficiency was higher
C. Actual production was more than budgeted
D. Actual hours worked were less than budgeted hours
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Capacity variance indicates under/over utilisation of plant capacity; adverse means actual hours < budgeted hours.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1513
In 'Reconciliation of Cost and Financial Accounts', which item is added to financial profit to arrive at costing profit?
A. Depreciation overcharged in cost accounts
B. Under-absorption of overheads in cost accounts
C. Dividend received recorded in financial accounts
D. Notional interest credited in cost accounts
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Notional expenses (like interest on own capital) appear in cost accounts but not in financial accounts. So if costing profit is lower, we add it back to financial profit to reconcile.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1514
The 'Activity Based Costing' (ABC) is more suitable for:
A. Only service industries
B. Labour-intensive industries
C. Organisations with high product diversity and complex overhead structures
D. Only small businesses
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
ABC works best where overheads are high and diverse, and products consume resources differently.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1515
The 'Target Costing' approach begins with:
A. Calculating actual cost
B. Budgeting
C. Determining cost of production
D. Setting a desired selling price and then deducting desired profit margin to arrive at target cost
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Target costing is a market-driven approach: Target cost = Target selling price - Desired profit.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1516
The 'Kaizen Costing' focuses on:
A. Continuous improvement and cost reduction during the production phase
B. Discontinuing products
C. New product design
D. Capital budgeting
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Kaizen is a Japanese concept of continuous small improvements.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1517
The 'Life Cycle Costing' considers costs:
A. Only variable costs
B. Only fixed costs
C. Only during manufacturing
D. From product design to disposal
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option D

Explanation:
Life cycle costing tracks costs from research and development to after-sales service and disposal.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1518
The 'Throughput Accounting' emphasises:
A. Maximising production volume
B. Maximising throughput (sales minus material cost) while minimising operating expenses and inventory
C. Increasing fixed cost
D. Reducing labour cost
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option B

Explanation:
Throughput accounting is based on the Theory of Constraints.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1519
The 'Theory of Constraints' (TOC) in cost management focuses on:
A. Reducing all costs
B. Reducing quality
C. Identifying and managing the bottleneck operation
D. Increasing inventory
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option C

Explanation:
TOC aims to maximise throughput by managing constraints.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #1520
Which of the following is a key feature of 'Ind AS 115' (Revenue from Contracts with Customers)?
A. Revenue is recognised based on transfer of control
B. Revenue is recognised when invoice is raised
C. Revenue is recognised based on transfer of risks and rewards
D. Revenue is recognised only on completion
Discuss
Get Complete Subject PDF for Accountancy and Statistics

Correct Answer: Option A

Explanation:
Ind AS 115 uses the control-based model.
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?