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Accounting Solved MCQs -Accounting Solved Quizzes - Accounting Solved Multiple Choice Questions

Accounting Solved MCQs -Accounting Solved Quizzes - Accounting Solved Multiple Choice Questions

The following basic accounting quiz are from accounting theory, basics of accounting, general accounting, financial accounting, and cost accounting.

1. The main source(s) of Generally Accepted Accounting Principles (GAAP) is/are:
(A) Company Law
(B) Accounting standards
(C) Both A and B
(D) None of these

2. What standards are used to prepare financial statements by most of the countries and companies
(A) International Financial Reporting Standards
(B) International Financial Accounting Standards
(C) International Accounting & Auditing Standards
(D) International Risk Reporting Standards

3. The correct form of Accounting equation is
(A) Assets + Liabilities = Equity
(B) Assets – Liabilities = Equity
(C) Assets – Receivable = Equity
(D) Assets + Receivable = Equity

4. A company sold goods worth $5,000 on 5 June and $10,000 on 28 June. The company received the first payment on 25 June and second on 7 July. The company prepared the financial statement on 30 June. What would be the total sale on the financial statement?
(A) $0
(B) $5,000
(C) $10,000
(D) $15,000

5. Advance payments are recognized as
(A) receivable
(B) payable
(C) bad debt
(D) none of these

1. (C) Both A and B
2. (A) International Financial Reporting Standards
3. (B) Assets – Liabilities = Equity
4. (D) $15,000
5. (A) receivable. 

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6. What from the following is NOT a current asset?
(A) Patent rights
(B) Inventory
(C) Cash
(D) Trade receivables

7. What from the following is NOT a non-current asset?
(A) Capital
(B) Property
(C) Patent rights
(D) Inventory

8. What from the following is/are NOT tangible asset(s)?
I. Patent rights
II. Goodwill
III. Land
(A) I only
(B) II only
(C) I and II only
(D) I, II and III

9. A machine price was $1,000 and was carried through a truck. The truck’s fares were $500. The engineers charged $500 for the installation. The cost of the machine is?
(A) $1,000
(B) $1,500
(C) $2,000
(D) $2,500

10. Depreciable amount =
(A) Cost of an asset + Residual value
(B) Cost of an asset – Residual value
(C) Residual value – Cost of an asset
(D) None of these

6. (A) Patent rights
7. (D) Inventory
8. (C) I and II only
9. (C) $2,000
10. (B) Cost of an asset – Residual value

11. The accounting process of allocation cost of intangible assets is called
(A) Amortization
(B) Depletion
(C) Going Concern
(D) Residual Value

12. The process of recording consumption of natural resources (or wasting assets) is called
(A) Amortization
(B) Depletion
(C) Going Concern
(D) Residual Value

13. The concept that the enterprise will continue in a foreseeable future is known as
(A) Amortization
(B) Depletion
(C) Going Concern
(D) Residual Value

14. What from the following is NOT a capital expense?
(A) Purchase of property
(B) Purchase of office equipment
(C) Replacement of a vehicle,
(D) Repair of a vehicle

15. An item of equipment cost $300,000 and has a residual value of $50,000 at the end of its expected useful life of four years. What is the depreciable amount?
(A) $50,000
(B) $250,000
(C) $300,000
(D) $350,000

11. (A) Amortization
12. (B) Depletion
13. (C) Going Concern
14. (D) Repair of a vehicle
15. (B) $250,000

16. The expected disposal value of the asset (after deducting disposal costs) at the end of its expected useful life is called
(A) residual value
(B) net book value
(C) depreciation
(D) substance over form

17. The figure that appears in the statement of financial position, after the depreciation, is known as
(A) depreciation
(B) substance over form
(C) residual value
(D) net book value

18. Which from the following asset is NOT depreciated?
I. Advances
II. Land
III. Machinery
(A) I only
(B) II only
(C) I and II
(D) II and III

19. Depreciation is normally charged as
(A) payable
(B) receivable
(C) expenses
(D) advances

20. A company purchases a non-current asset in Year 1 for $90,000. The depreciation charge is $15,000. What net book value would be recorded in financial position statement (or balance sheet) at the end of Year-2?
(A) $75,000
(B) $60,000
(C) $30,000
(D) $15,000

16. (A) residual value
17. (D) net book value
18. (C) I and II
19. (C) expenses
20. (B) $60,000

21. Raw materials that are remaining at the end of the reporting period are treated as
(A) liabilities
(B) expenses
(C) fixed assets
(D) current assets

22. The goods that have been sold to the customers are treated as _____ in the financial statements.
(A) inventories
(B) expenses
(C) income
(D) debt

23. The goods that have not been sold to the customers till the end of the reporting period are considered as
(A) inventories
(B) expenses
(C) sales
(D) purchases

24. The selling price of some goods is $1500 and cost to sell the goods is $200. What is the Net Realizable Value (NRV)?
(A) $1000
(B) $1200
(C) $1300
(D) $1500

25. The selling price of some under-process goods is $1500, cost to finally produce the goods is $300, and cost to sell the goods is $200. What is the Net Realizable Value (NRV)?
(A) $1000
(B) $1200
(C) $1300
(D) $1500

21. (D) current assets
22. (B) expenses
23. (A) inventories
24. (C) $1300
25. (A) $1000

26. A bank overdraft is shown as a/an _____ balance in the bank statement.
(A) debit
(B) credit
(C) credit – debit
(D) none of these

27. Which from the following is included in the cost of purchases?
(A) Abnormal loss
(B) Freight in
(C) Rent of store
(D) Administrative Salaries

28. Cheques issued but not presented, cause the bank statement balance to be ________  the cash book balance.
(A) greater than
(B) less than
(C) equal to
(D) the two statements are irrelevant

29. The capital of a business is $100,000 and the liabilities are $40,000. What are the total assets?
(A) $40,000
(B) $60,000
(C) $100,000
(D) $140,000

30. Any transaction which cannot be recorded in any book of prime entry is recorded in
(A) Cash book
(B) Petty cash book
(C) General journal
(D) Day books

26. (A) debit
27. (B) Freight in
28. (A) greater
29. (D) $140,000
30. (C) General journal

31. The withdrawal of inventory by the owner for personal use should appear in the trading account as a deduction from
(A) sales
(B) purchases
(C) overdrafts
(D) none of these

32. A company had opening inventory of $200,000. Sales and purchases during the period were of $400,000 and $80,000 respectively. What is the gross profit for the period if the closing inventory was worth $100,000?
(A) $20,000
(B) $120,000
(C) $220,000
(D) $320,000

33. Which from the following costs are included in conversion costs?
(A) Carriage in
(B) Carriage outwards
(C) Commission of selling staff
(D) Supervisor’s wages

34. Goods which originally cost $800 were sold for $1,000. In the accounting equation Net Assets will?
(A) Rise by $1,000
(B) Rise by $200
(C) Fall by $1,000
(D) Fall by $200

35. A debit entry usually represents
(A) Assets and Expenses
(B) Assets and Income
(C) Liabilities and Income
(D) Liabilities and Expenses

31. (B) purchases
32. (C) $220,000
33. (D) Supervisor’s wages
34. (B) Rise by $200
35. (A) Assets and Expenses


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