1870+ Financial Accounting Solved MCQs

These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration in Computer Applications (BBA [CA]) , Bachelor of Business Administration (BBA) , Bachelor of Accounting and Finance (BAF) , Bachelor of Commerce (B Com) , Cost Accounting .

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701.	Selling expenses should be divided among the different departments on the basis of ______
A.	Sales
B.	Purchase
C.	Gross profit
D.	Net profit
Answer» A. Sales

702.	Building expenses should be divided among the different departments according to the ______ by each departments
A.	Area occupied
B.	No of employees
C.	Direct wages
D.	Direct material
Answer» A. Area occupied

703.	Balance of trading account is a transfer to
A.	Balance sheet
B.	Trial balance
C.	Profit and loss account
D.	Income statement
Answer» C. Profit and loss account

704.	Depreciation on machinery this transaction initially shown on
A.	Trading account
B.	Profit and loss account
C.	Balance sheet
D.	All of these
Answer» B. Profit and loss account

705.	The expenses which have been incurred to bring the goods or making the goods ready for sales is called
A.	Administrative expenses
B.	Direct expenses
C.	Indirect expenses
D.	Revenue expenses
Answer» B. Direct expenses

706.	Packing of goods for protecting the goods is debited in the
A.	Balance sheet
B.	Profit and loss account
C.	Trading account
D.	Trial balance
Answer» C. Trading account

707.	The balance of profit and loss account is called
A.	Net profit /loss
B.	Gross profit/ loss
C.	Working profit / loss
D.	Petty profit / loss
Answer» A. Net profit /loss

708.	Carriage out expenses are come under
A.	Administrative expenses
B.	Financial expenses
C.	Manufacturing expenses
D.	Distribution expenses
Answer» D. Distribution expenses

709.	Mines, quarries etc are
A.	Fixed asset
B.	Fictitious asset
C.	Current asset
D.	Wasting asset
Answer» D. Wasting asset

710.	The final accounts , when adjustment entry is passed ,it affects the minimum ________
A.	One account
B.	Two account
C.	Three account
D.	Entire account
Answer» B. Two account

711.	The closing stock will appear in trial balance at the
A.	Debit side
B.	Asset side
C.	Credit side
D.	None of these
Answer» D. None of these

713.	If closing stock appear on the trial balance it must have been ____
A.	Added to the purchase
B.	Added to the opening stock
C.	Deducted from the purchases
D.	Deducted from opening stock
Answer» C. Deducted from the purchases

715.	Resources which are invested in permanent asset are called
A.	Investment
B.	Working capital
C.	Block capital
D.	Intangible capital
Answer» C. Block capital

718.	Expenses which have become due during the accounting period for which the final accounts have been prepared but have not yet been paid is called
A.	Accrued
B.	Outstanding
C.	Arrears
D.	Non over dues
Answer» B. Outstanding

719.	Balance sheet is a _______
A.	Ledger
B.	Account
C.	Statement
D.	Subsidiary book
Answer» C. Statement

712.	Outstanding salary is shown on
A.	Balance sheet
B.	Trading account
C.	Suspense account
D.	Outstanding account
Answer» A. Balance sheet

714.	Discount on purchase will be
A.	Debited to profit and loss account
B.	Credited to profit and loss account
C.	Deducted from purchases
D.	Added to purchases
Answer» B. Credited to profit and loss account

716.	Sales is equal to
A.	Net income + expenses + cost of goods sold
B.	Gross profit + net income + expenses
C.	Gross profit + cost of goods sold + direct expenses
D.	Net income + direct expenses
Answer» C. Gross profit + cost of goods sold + direct expenses

717.	The premium paid on the life policy of the proprietor is debited to
A.	Profit and loss account
B.	Trading account
C.	Premium account
D.	Drawing account
Answer» D. Drawing account

720.	Income tax paid for the proprietor from the business is
A.	Debited in the income account
B.	Debited in the trading account
C.	Deducted from capital
D.	Deducted from profit
Answer» C. Deducted from capital

721.	In the balance sheet of sole trader business , assets are managed in the order of
A.	Permanency
B.	Liquidity
C.	Priority
D.	Flexibility
Answer» B. Liquidity

722.	Under ______ system the buyer does not get ownership of goods immediately
A.	Installment
B.	HP
C.	Installment and HP
D.	None of these
Answer» B. HP

723.	________ means the price at which the goods can be purchased by the hirer for ready cash
A.	HP price
B.	Installment price
C.	Cash price
D.	Down payment
Answer» C. Cash price

724.	_______ is the initial payment made at the time of signing the hire purchase agreement
A.	HP price
B.	Installment price
C.	Cash price
D.	Down payment
Answer» D. Down payment

725.	The difference between hire purchase price and the cash price is called ______
A.	Hire charges
B.	Cost of the asset
C.	Installment price
D.	Cash price
Answer» A. Hire charges

1870+ Financial Accounting Solved MCQs

Selling expenses should be divided among the different departments on the basis of ______

Building expenses should be divided among the different departments according to the ______ by each departments

Balance of trading account is a transfer to

Depreciation on machinery this transaction initially shown on

The expenses which have been incurred to bring the goods or making the goods ready for sales is called

Packing of goods for protecting the goods is debited in the

The balance of profit and loss account is called

Carriage out expenses are come under

Mines, quarries etc are

The final accounts , when adjustment entry is passed ,it affects the minimum ________

The closing stock will appear in trial balance at the

Outstanding salary is shown on

If closing stock appear on the trial balance it must have been ____

Discount on purchase will be

Resources which are invested in permanent asset are called

Sales is equal to

The premium paid on the life policy of the proprietor is debited to

Expenses which have become due during the accounting period for which the final accounts have been prepared but have not yet been paid is called

Balance sheet is a _______

Income tax paid for the proprietor from the business is

In the balance sheet of sole trader business , assets are managed in the order of

Under ______ system the buyer does not get ownership of goods immediately

________ means the price at which the goods can be purchased by the hirer for ready cash

_______ is the initial payment made at the time of signing the hire purchase agreement

The difference between hire purchase price and the cash price is called ______

Under ______ system , the buyer gets ownership of goods immediately

When an asset is acquired on hire purchase system, the asset account is debited with _______ of the assets in the books of the hire purchaser.

In order to deal with the re possession the hire vendor operates an account called _______

Under _____ system , the hire vendor has a right to take back the goods

Single entry system of accounts is maintained by ______

The statement of profit or loss is prepared according to _______ method to calculate profit or loss under single entry system

Under single entry system , drawings is _____ to know gross profit

Receipts and payment account is a summary of ______

Excess of income over expenditure of non trading concern is called _______

Income and expenditure account is a type of ______

The amount of money owed by a business to outsider is called _____

The properties and possession of a business are termed as ________

Prepaid expenses appearing in trial balance will appear in _____

Net profit / loss is transferred to the ______ account

All ________ expenses are recorded in the trading account

________ expenses are shown in the profit and loss account

Which English alphabet is similar to the shape of an account?

Gross Profit is the difference between

Process of spreading cost 3. Profit and Loss A/c 4. Check arithmetic accuracy 4. Accounting for Fixed Asset

The basic concepts related to Balance Sheet are

The basic concepts related to P & L Account are

Which of the following is (are) characteristic(s) of Bad Debt?

Only the significant events which affect the business must be recorded as per the principle of

P & L Account is prepared for a period of one year by following [Hints: (c) P&L A/C is prepared for a period of one year by following the concept of Accounting Period.]

If the Going Concern concept is no longer valid, which of the following is true?

726.	Under ______ system , the buyer gets ownership of goods immediately
A.	Installment
B.	HP
C.	Installment and HP
D.	None of these
Answer» A. Installment

727.	When an asset is acquired on hire purchase system, the asset account is debited with _______ of the assets in the books of the hire purchaser.
A.	Hp price
B.	Cash price
C.	Installment price
D.	None of these
Answer» B. Cash price

728.	In order to deal with the re possession the hire vendor operates an account called _______
A.	Asset account
B.	Goods account
C.	Goods repossessed account
D.	None of these
Answer» C. Goods repossessed account

729.	Under _____ system , the hire vendor has a right to take back the goods
A.	Installment
B.	HP
C.	Installment and HP
D.	None of these
Answer» B. HP

730.	Single entry system of accounts is maintained by ______
A.	Partnership
B.	Company
C.	Sole trader
D.	None of these
Answer» C. Sole trader

731.	The statement of profit or loss is prepared according to _______ method to calculate profit or loss under single entry system
A.	Conversion method
B.	Statement of affairs method
C.	Conversion and statement of affairs method
D.	None of these
Answer» B. Statement of affairs method

732.	Under single entry system , drawings is _____ to know gross profit
A.	Added
B.	Deducted
C.	Added and deducted
D.	None of these
Answer» A. Added

733.	Receipts and payment account is a summary of ______
A.	Income and expenditure
B.	Profit and loss
C.	Cashbook
D.	Balance sheet
Answer» C. Cashbook

734.	Excess of income over expenditure of non trading concern is called _______
A.	Profit
B.	deficit
C.	Surplus
D.	Loss
Answer» C. Surplus

735.	Income and expenditure account is a type of ______
A.	Balance sheet
B.	Receipts and payment
C.	Profit and loss account
D.	None of these
Answer» C. Profit and loss account