Fundamentals of Accounting – Multiple Choice Questions (MCQ) with Answers
1- Accounting provides information on
(A) Cost and income for managers
(B) Company’s tax liability for a particular year
(C) Financial conditions of an institution
(D) All of the above
2- The long term assets that have no physical existence but are rights
that have value is known as
(A) Current assets
(B) Fixed assets
(C) Intangible assets
(D) Investments
3- The assets that can be converted into cash within a short period (i.e.
1 year or less) are known as
(A) Current assets
(B) Fixed assets
(C) Intangible assets
(D) Investments
4- Patents, Copyrights and Trademarks are
(A) Current assets
(B) Fixed assets
(C) Intangible assets
(D) Investments
5- The following is not a type of liability
(A) Short term
(B) Current
(C) Fixed
(D) Contingent
6- The liabilities that are payable in more than a year and are not
be liquidated from current assets
(A) Current liabilities
(B) Fixed liabilities
(C) Contingent liabilities
(D) All of the above
7- The debts, which are to be repaid within a short period (year or less)
are known as
(A) Current liabilities
(B) Fixed liabilities
(C) Contingent liabilities
(D) All of the above
8- The sales income (Credit and Cash) of a business during a given period
is called
(A) Transactions
(B) Sales returns
(C) Turnover
, (D) Purchase returns
9- Any written evidence in support of a business transaction is called
(A) Journal
(B) Ledger
(C) Ledger posting
(D) Voucher
10- The accounts that records expenses, gains and losses are
(A) Personal accounts
(B) Real accounts
(C) Nominal accounts
(D) None of the above
11- Real accounts records
(A) Dealings with creditors or debtors
(B) Dealings in commodities
(C) Gains and losses
(D) All of the above
MULTIPLE CHOICE QUESTIONS ON BASIC ACCOUNTING
Q1] Which accounting concept satisfy the valuation criteria:
a) Going concern, Realisation, Cost b) Going concern, Cost, Dual aspect
c) Cost, Dual aspect, Conservatism d) Realisation, Conservatism, Going concern.
Q2] A trader has made a sale of Rs.75, 500 out of which cash sales amounted to
Rs.25, 500. He showed trade receivables on 31-3-2014 at Rs.25,500. Which concept is
followed by him?
a) Going concern b) Cost c) Accrual d) Money measurement
Q3] In which of the following cases, accounting estimates are needed?
a) Employs benefit schemes b) Impairment of losses c) Inventory obsolescence d) All of
the above
Q4] Deewali advance given to an employee is
a) Revenue Expenditure b) Capital Expenditure c) Deferred Revenue Expenditure
d) Not an Expenditure
Q5] A firm has reported a profit of Rs.1,47,000 for the year ended 31-3-2014 after
taking into consideration the following items.
(i) The cost of an asset Rs.23,000 has been taken as an expense
(ii) The firm anticipated a profit of Rs.12,000 on the sale of an old furniture
(iii) Salary of Rs.7,000 outstanding for the year has not been taken into account.
(iv) An asset of Rs.85,000 was purchased for Rs.75,000 and was recorded in the books at
Rs.85,000.
1- Accounting provides information on
(A) Cost and income for managers
(B) Company’s tax liability for a particular year
(C) Financial conditions of an institution
(D) All of the above
2- The long term assets that have no physical existence but are rights
that have value is known as
(A) Current assets
(B) Fixed assets
(C) Intangible assets
(D) Investments
3- The assets that can be converted into cash within a short period (i.e.
1 year or less) are known as
(A) Current assets
(B) Fixed assets
(C) Intangible assets
(D) Investments
4- Patents, Copyrights and Trademarks are
(A) Current assets
(B) Fixed assets
(C) Intangible assets
(D) Investments
5- The following is not a type of liability
(A) Short term
(B) Current
(C) Fixed
(D) Contingent
6- The liabilities that are payable in more than a year and are not
be liquidated from current assets
(A) Current liabilities
(B) Fixed liabilities
(C) Contingent liabilities
(D) All of the above
7- The debts, which are to be repaid within a short period (year or less)
are known as
(A) Current liabilities
(B) Fixed liabilities
(C) Contingent liabilities
(D) All of the above
8- The sales income (Credit and Cash) of a business during a given period
is called
(A) Transactions
(B) Sales returns
(C) Turnover
, (D) Purchase returns
9- Any written evidence in support of a business transaction is called
(A) Journal
(B) Ledger
(C) Ledger posting
(D) Voucher
10- The accounts that records expenses, gains and losses are
(A) Personal accounts
(B) Real accounts
(C) Nominal accounts
(D) None of the above
11- Real accounts records
(A) Dealings with creditors or debtors
(B) Dealings in commodities
(C) Gains and losses
(D) All of the above
MULTIPLE CHOICE QUESTIONS ON BASIC ACCOUNTING
Q1] Which accounting concept satisfy the valuation criteria:
a) Going concern, Realisation, Cost b) Going concern, Cost, Dual aspect
c) Cost, Dual aspect, Conservatism d) Realisation, Conservatism, Going concern.
Q2] A trader has made a sale of Rs.75, 500 out of which cash sales amounted to
Rs.25, 500. He showed trade receivables on 31-3-2014 at Rs.25,500. Which concept is
followed by him?
a) Going concern b) Cost c) Accrual d) Money measurement
Q3] In which of the following cases, accounting estimates are needed?
a) Employs benefit schemes b) Impairment of losses c) Inventory obsolescence d) All of
the above
Q4] Deewali advance given to an employee is
a) Revenue Expenditure b) Capital Expenditure c) Deferred Revenue Expenditure
d) Not an Expenditure
Q5] A firm has reported a profit of Rs.1,47,000 for the year ended 31-3-2014 after
taking into consideration the following items.
(i) The cost of an asset Rs.23,000 has been taken as an expense
(ii) The firm anticipated a profit of Rs.12,000 on the sale of an old furniture
(iii) Salary of Rs.7,000 outstanding for the year has not been taken into account.
(iv) An asset of Rs.85,000 was purchased for Rs.75,000 and was recorded in the books at
Rs.85,000.
