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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51.	The public hospitals do not carry the activities with an intention of earning profits. Sol:
A.	True
B.	False
C.	none
D.	all
Answer» A. True

52.	The Income and Expenditure Account is a summary of cash transactions. Sol:
A.	True
B.	False
C.	none
D.	all
Answer» B. False

53.	The Income and Expenditure Account includes all revenue expenses and income irrespective of its cash flow Sol:
A.	True
B.	False
C.	none
D.	all
Answer» A. True

54.	The Income and Expenditure Account is always accompanied with a cash flow statement Sol:
A.	True
B.	False
C.	none
D.	all
Answer» B. False

55.	The fees are collected only once at the time of admission of a member, hence Entrance Fees should be treated as 'Revenue Receipt'.
A.	True
B.	False
C.	none
D.	all
Answer» B. False

56.	The fees received from life members is not a periodic subscription, hence are to be capitalized
A.	True
B.	False
C.	none
D.	all
Answer» A. True

57.	) A Receipts and Payments Account is nothing but a summary of all capital receipts and payments.
A.	True
B.	False
C.	none
D.	all
Answer» B. False

58.	Charitable Organizations promote welfare of the common man, in general Sol:
A.	True
B.	False
C.	none
D.	all
Answer» A. True

59.	A Receipts and Payments Account record only non-cash items. Sol:
A.	True
B.	False
C.	none
D.	all
Answer» B. False

60.	Receipts and Payments A/c is a summary of: Sol:
A.	All Capital Receipts and Payments
B.	All Revenue Receipts and Payments
C.	All Revenue and Capital Receipts and Payments
D.	None of the above
Answer» C. All Revenue and Capital Receipts and Payments

61.	Out of the following items, which one is shown in the Receipts and Payments Account? Sol:
A.	Outstanding Salary
B.	Depreciation
C.	Life Membership Fees
D.	Accrued Subscription
Answer» C. Life Membership Fees

62.	In case specific fund is maintained, the expenses exceeding the amount of the fluids, should be recorded on:
A.	Liabilities side of the Balance Sheet
B.	Debit side the Income and Expenditure Account
C.	Credit side of the Income and Expenditure Account
D.	Assets side of the Balance Sheet
Answer» B. Debit side the Income and Expenditure Account

64.	Capital fund is calculated: Sol:
A.	Income-Expenditure
B.	Assets Liabilities
C.	Capital + Liabilities
D.	None of these
Answer» B. Assets Liabilities

65.	Subscription received in advance during the current year is: Sol:
A.	An income
B.	An Asset
C.	A liability
D.	None of these
Answer» C. A liability

66.	Balance of Income and Expenditure Account shows: Sol:
A.	Cash in hand
B.	Capital fund
C.	Net Profit
D.	Excess of Income over expenditure or vice versa
Answer» D. Excess of Income over expenditure or vice versa

63.	All receipts from sale of consumable items are treated as: Sol:
A.	Capital Receipts
B.	Revenue Receipts
C.	Both (a) and (b)
D.	None of these
Answer» B. Revenue Receipts

67.	Property received as a result of the will of the deceased person is called: Sol:
A.	Lagacy
B.	Honorarium
C.	Donation
D.	Subscription
Answer» A. Lagacy

68.	Receipts and Payments Account usually indicates: Sol:
A.	Surplus
B.	Capital fund
C.	Debit Balance
D.	Credit Balance
Answer» C. Debit Balance

69.	Income and Expenditure Account generally indicates: Sol:
A.	Surplus/ deficit
B.	Cash balance
C.	Capital fund
D.	Net profit/Loss
Answer» A. Surplus/ deficit

70.	Donation received for a special purpose: Sol:
A.	Should be credited to Income and Expenditure A/c
B.	Should be credited to a separate account and shown in the Balance Sheet
C.	Should be shown on the Assets side of the Balance Sheet
D.	None of these
Answer» B. Should be credited to a separate account and shown in the Balance Sheet

71.	In not-for-profit organisation, excess of expenditure over income is called : Sol:
A.	Loss
B.	Profit
C.	Deficit
D.	Surplus
Answer» C. Deficit

72.	Which of the following is a non-profitable organisation ? Sol:
A.	Jharkhand Academic Council
B.	Tata Steel
C.	Air India
D.	Reliance
Answer» A. Jharkhand Academic Council

73.	Income and Expenditure Account is preparedly : Sol:
A.	Trending Organisation
B.	Non-trading Organisation
C.	Both (a) and (b)
D.	None of these
Answer» B. Non-trading Organisation

74.	Sale of old newspapers is: Sol:
A.	Capital Receipt
B.	Revenue Receipt
C.	Asset
D.	Profit
Answer» B. Revenue Receipt

75.	Income and expenses related to the prize fund is shown in: Sol:
A.	Income and Expenditure Account
B.	Assets side of the Balance Sheet
C.	Liabilities side of the Balance Sheet
D.	Cash Account
Answer» A. Income and Expenditure Account

1870+ Financial Accounting Solved MCQs

The public hospitals do not carry the activities with an intention of earning profits. Sol:

The Income and Expenditure Account is a summary of cash transactions. Sol:

The Income and Expenditure Account includes all revenue expenses and income irrespective of its cash flow Sol:

The Income and Expenditure Account is always accompanied with a cash flow statement Sol:

The fees are collected only once at the time of admission of a member, hence Entrance Fees should be treated as 'Revenue Receipt'.

The fees received from life members is not a periodic subscription, hence are to be capitalized

) A Receipts and Payments Account is nothing but a summary of all capital receipts and payments.

Charitable Organizations promote welfare of the common man, in general Sol:

A Receipts and Payments Account record only non-cash items. Sol:

Receipts and Payments A/c is a summary of: Sol:

Out of the following items, which one is shown in the Receipts and Payments Account? Sol:

In case specific fund is maintained, the expenses exceeding the amount of the fluids, should be recorded on:

All receipts from sale of consumable items are treated as: Sol:

Capital fund is calculated: Sol:

Subscription received in advance during the current year is: Sol:

Balance of Income and Expenditure Account shows: Sol:

Property received as a result of the will of the deceased person is called: Sol:

Receipts and Payments Account usually indicates: Sol:

Income and Expenditure Account generally indicates: Sol:

Donation received for a special purpose: Sol:

In not-for-profit organisation, excess of expenditure over income is called : Sol:

Which of the following is a non-profitable organisation ? Sol:

Income and Expenditure Account is preparedly : Sol:

Sale of old newspapers is: Sol:

Income and expenses related to the prize fund is shown in: Sol:

Which of the following is not a not-for-profit organisation: Sol:

Subscription received during the year 50,000 Rs. Subscriptions outstanding at the end of the year 8,000 Rs. Subscription outstanding at the beginning of the year 6,000 Rs. Net Income from subscription will be :

In case specific fund is maintained, the expenses exceeding the amount of the funds, should be recorded on:

Income and Expenditure Account is: Sol:

Life Membership Fees received by a club is shown in : Sol:

Receipts and Payments Account is a : Sol:

Income and Expenditure Account is prepared : Sol:

Payment of honorarium to secretary is treated as : Sol:

Outstanding subscription is a: Sol:

Legacies should be treated as Sol:

The excess of assets over liabilities in non-trading concerns is termed as: Sol:

For a non-trading concern, honorarium paid is: Sol:

Entrance fees, unless otherwise stated, is treated as: Sol:

Specific donation is: Sol:

Income and Expenditure Account records transactions of: Sol:

Life membership fee received by a club is: Sol:

All receipts of capital nature are shown in : Sol:

All items of revenue in nature are shown in: Sol:

Which of the following is not a not-for-profit organisation ? Sol:

Subscriptions received in advance by a club are shown on……………..of the Balance Sheet Sol:

Which of the following is not an income ? Sol:

Subscription received by an organisation is: Sol:

Not-for-profit organisations are based on…………………………theory. Sol:

The not for profit concerns prohibit the payment of any ………………………to their members Sol:

The primary motive of Charitable Trust organizations is to provide……………………. Sol:

The Income and Expenditure Account includes all revenue expenses and income
irrespective of its cash flow
Sol:

Subscription received during the year 50,000 Rs. Subscriptions outstanding at the end of
the year 8,000 Rs. Subscription outstanding at the beginning of the year 6,000 Rs. Net Income
from subscription will be :

Subscriptions received in advance by a club are shown on……………..of the Balance
Sheet
Sol:

The not for profit concerns prohibit the payment of any ………………………to their
members
Sol:

76.	Which of the following is not a not-for-profit organisation: Sol:
A.	School
B.	Hospital
C.	Club
D.	Partnership Firm
Answer» D. Partnership Firm

77.	Subscription received during the year 50,000 Rs. Subscriptions outstanding at the end of the year 8,000 Rs. Subscription outstanding at the beginning of the year 6,000 Rs. Net Income from subscription will be :
A.	Rs 48000
B.	RS 64000
C.	RS 52000
D.	RS 36000
Answer» C. RS 52000

78.	In case specific fund is maintained, the expenses exceeding the amount of the funds, should be recorded on:
A.	Liabilities side of the Balance Sheet
B.	Debit side of the Income and Expenditure Account
C.	Credit side of the Income and Expenditure Account
D.	Assets side of the Balance Sheet
Answer» B. Debit side of the Income and Expenditure Account

79.	Income and Expenditure Account is: Sol:
A.	Personal Account
B.	Real Account
C.	Nominal Account
D.	None of these
Answer» C. Nominal Account

80.	Life Membership Fees received by a club is shown in : Sol:
A.	Income and Expenditure A/c
B.	Balance Sheet
C.	Receipts and Payments A/c
D.	None of these
Answer» B. Balance Sheet

82.	Income and Expenditure Account is prepared : Sol:
A.	By Business Organisation
B.	By Industrial Organisation
C.	By Not-for-Profit Organisation
D.	By All Organisations
Answer» C. By Not-for-Profit Organisation

83.	Payment of honorarium to secretary is treated as : Sol:
A.	Capital expenditure
B.	Revenue expenditure
C.	An income
D.	None of these
Answer» B. Revenue expenditure

84.	Outstanding subscription is a: Sol:
A.	Income
B.	Assets
C.	(a) and (b) Both
D.	None of these
Answer» C. (a) and (b) Both

85.	Legacies should be treated as Sol:
A.	A Liability
B.	A Revenue Receipt
C.	An Income
D.	None of these
Answer» A. A Liability

86.	The excess of assets over liabilities in non-trading concerns is termed as: Sol:
A.	Capital Fund
B.	Capital
C.	Profit
D.	Net profit
Answer» A. Capital Fund