Accounting MCQ Ques and Ans Advanced Accountancy (Commerce) Note: Options given in bold are answers (PC-15)

 Accounting MCQ Ques and Ans Advanced Accountancy (Commerce)

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 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

6.       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

7.       Any written evidence in support of a business transaction is called

a.       Journal

b.       Ledger

c.       Ledger posting

d.      Voucher

8.       The account that records expenses, gains and losses is

a.       Personal account

b.       Real account

c.       Nominal account

d.       None of the above

9.      Real account records

a.       Dealings with creditors or debtors

b.      Dealings in commodities

c.       Gains and losses

d.       All of the above

10.  In Journal, the business transaction is recorded

a.      Same day

b.       Next day

c.       Once in a week

d.       Once in a month

11.   The following is (are) the type(s) of Journal

a.       Purchase Journal

b.       Sales Journal

c.       Cash Journal

d.      All of the above  

12.   The process of entering all transactions from the Journal to Ledger is called

a.      Posting

b.       Entry

c.       Accounting

d.       None of the above

13.   The following is a statement showing the financial status of the company at any given time

a.       Trading account

b.       Profit & Loss statement

c.       Balance Sheet

d.       Cash Book

14.   The following is a statement of revenues and expenses for a specific period of time

a.       Trading account

b.       Trial Balance

c.       Profit & Loss statements

d.       Balance Sheet

15.   Balance sheet is a statement of

a.       Assets

b.       Liabilities

c.       Capital

d.      All of the above

16.   Balance sheets are prepared

a.       Daily

b.       Weekly

c.       Monthly

d.      Annually

17.  The ratios that refer to the ability of the firm to meet the short term obligations out of its short term resources

a.      Liquidity ratio

b.       Leverage ratio

c.       Activity ratio

d.       Profitability ratio

18.   The measure of how efficiently the assets resources are employed by the firm is called

a.       Liquidity ratio

b.       Leverage ratio

c.       Activity ratio

d.       Profitability ratio

19.   The following is (are) the current liability (ies)

a.       Bills payable

b.       Outstanding expenses

c.       Bank Overdraft

d.      All of the above

20.  Current ratio =

a.       Quick assets/Current liabilities

b.      Current assets/Current liabilities

c.       Debt/Equity

d.       Current assets/Equity

21.  Liquid or Quick assets =

a.      Current assets - (Stock + Work in progress)

b.       Current assets + Stock + Work in progress

c.       (Current assets + Stock) + Work in progress

d.       (Current assets + Work in progress) - Stock

22.   Lower the Debt Equity ratio

a.       Lower the protection to creditors

b.      Higher the protection to creditors

c.       It does not affect the creditors

d.       None of the above

23.   A higher inventory ratio indicates

a.       Better inventory management

b.       Quicker turnover

c.       Both A and B

d.       None of the above

24.   Return on Investment Ratio (ROI) =

a.       (Gross profit / Net sales) x 100

b.       (Gross profit x Sales / Fixed assets) x 100

c.       (Net profit / Sales) x 100

d.      (Net profit / Total assets) x 100

25.   A low Return on Investment Ratio (ROI) indicates

a.       Improper utilization of resources

b.       Over investment in assets

c.       Both A and B

d.       None of the above

26.   Sales expenditure budget is prepared by estimating the expense(s) of

a.       Advertisement

b.       Market analysis

c.       Salesman's salary

d.      All of the above

27.   Budgeting is difficult to apply in the following cases

a.       Products subjected to rapid changes

b.       Job order manufacturing

c.       Uncertain market condition

d.      All of the above

28.   A Master Budget consists of

a.       Sales budget

b.       Production budget

c.       Material budget

d.      All of the above

29.   The accounting process involves recording

a.      Quantifiable economic event

b.       Non Quantifiable economic event

c.       All of them

d.       None of them

30.   In accounting, an economic event is referred to as

a.       Cash

b.       Bank statement

c.       Transaction

d.       Exchange of money