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Quiz 1
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Q.1
What is nature of Capital account?
Debit
Credit
Expenses
Loss
Q.2
The assets which have a limited useful life are termed as
Limited assets
Depreciable assets
Unlimited assets
None of the above
Q.3
Which one of the following is INCORRECT about closing stock?
It is added into current assets
It is deducted from Material available for use
It becomes opening stock of next year
It reduces the resources of business
Q.4
What is the next step to Journalizing in accounting cycle?
Recording
Posting
Balancing
Analyzing
Q.5
Contra-entries are passed only when
Double column cash book is prepared
Three column cash book is prepared
Simple cash book is prepared
None of the above
Q.6
Petty cash balance is
Liability
Income
Expense
Asset
Q.7
A decrease in value of a fixed asset due to age, wear and tear is known as
Depreciation
Accumulated depreciation
Appreciation
Written Down Value (WDV)
Q.8
In balance sheet, fixed assets are shown at
Cost price
Market value
Fair value
Written Down Value (WDV)
Q.9
Outsider's claim against the assets of the business is called
Liability
Expense
Income
Capital
Q.10
An expenditure whose benefit is finished or enjoyed immediately is called
Expense
Liability
Cost
Income
Q.11
Dividends are usually paid as a percentage of
Net profit
Authorized share capital
Called up capital
Paid up capital
Q.12
A proforma invoice is sent by
Consignee to consignor
Consignee to debtors
Debtors to consignee
Consignor to consignee
Q.13
The accrual basis of accounting records revenues when they are
Collected
Earned
Contracted
Readily available for use
Q.14
A company's merchandise, raw materials, finished and unfinished products which have not yet been sold is known as
Sales
Purchases
Inventory
Work in progress
Q.15
Which of the following is used to record financial transactions in chronological (day-to-day) order?
Voucher
General Journal
General Ledger
Trial Balance
Q.16
Net Profit = Gross Profit minus
Operating expenses
Product cost
Deferred expenses
Direct cost
Q.17
Commission to promote credit sale by consignee is known as
Del credere commission
Over riding commission
Ordinary commission
Special commission
Q.18
Which one of the following methods of inventory costing yields highest taxable income?
FIFO
LIFO
AVCO or averrage cost
Standard cost method
Q.19
Which one of the following methods of inventory costing produces ending stock cost close to the market value of the inventory?
FIFO
LIFO
AVCO or averrage cost
Q.20
NRV or net realizable value of inventory is the expected selling price or market value less
Carry value of the inventory
Expenses necessary to complete sale
Cost of the stock
Replacement cost
Q.21
Under which method of inventory costing, a pre-determined cost is assigned to all items of inventory?
Replacement cost method
Standard cost method
AVCO or average cost
FIFO method
Q.22
Money spent to acquire or upgrade physical assets is known as
Revenue expense
Capital expense
Administrative expense
Operating expense
Q.23
Salaries paid in advance should be shown on
Asset side of the Balance sheet
Liability side of the Balance sheet
Credit side of the Trading account
All of the above
Q.24
Which of the following assets are shown at written down value in Balance sheet?
Current assets
Liquid asset
Floating assets
Fixed asset
Q.25
Which of the following accounting equation is correct?
Cash + Other assets = Capital - Liabilities
Capital + Liabilities = Assets + Income
Assets - Liabilities = Capital
Assets + Capital = Liabilities
Q.26
Fresh capital introduction will increase
Assets and Liabilities
Assets and Equity
Liabilities and equity and bank balance
Capital and Liabilities
Q.27
Current Assets - Current Liabilities = ?
Capital + Liabilities = assets
Absorbed capital
Net assets
Working capital
Q.28
Which one of the following inventory costing methods is supposed to issue the most recently purchased goods?
FIFO
LIFO
AVCO or averrage cost
Moving average
Q.29
Opening inventory + Net purchases = ?
Ending inventory
Closing stock
Cost of goods manufactured
Cost of goods available for sale
Q.30
Cost of goods available for sale - closing inventory = ?
Opening inventiry
Cost of opening finished goods inventory
Work in progress ending inventory
Cost of goods sold
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