Financial Accounting MCQ Questions and Answers Part – 2

Financial Accounting MCQ Questions and Answers Part – 1

Financial Accounting MCQ Questions and Answers Part – 2

Financial Accounting MCQ Questions and Answers Part – 3

51. Indirect expenses is also called____________.
A. prime cost.
B. common expenses.
C. direct expenses.
D. management expenses.
ANSWER: B
52. under branch account, debtors system cash sales is shown in the _____________.
A. debit
B. credit
C. asset
D. none
ANSWER: D
53. Expenses which cannot be apportioned to department must be shown in the _____.
A. balance sheet.
B. trading account.
C. P & L account.
D. P & L Appropriation account.
ANSWER: C
54. When goods are transferred from one department to other department, they are called __________.
A. inter-departmental transfers.
B. outer-departmental transfers.
C. not a transfer.
D. regular transfer.
ANSWER: A
55. When goods are transferred from one department to other, the department transferring the goods should be ___________.
A. debited.
B. credited.
C. added.
D. subtracted .
ANSWER: B
56. When goods are transferred from one department to other, the department transferring the goods should be credited and department receiving the goods should be _________.
A. debited.
B. credited.
C. added.
D. subtracted.
ANSWER: A
57. In departmental accounts expenses like director fees, interest is transferred to ______.
A. balance sheet.
B. trading account.
C. general P & L account .
D. P & L Appropriation account.
ANSWER: C
58. The departmental accounting enables a business firm to maximize _________.
A. profit.
B. losses.
C. cash.
D. assets .
ANSWER: A
59. Branch which does not maintain its own set of books is ______________.
A. dependent branch.
B. independent branch.
C. foreign branch.
D. local branch .
ANSWER: A
60. The business policies and the administration of a branch are wholly controlled by the head office the type of branch is __________.
A. independent branch.
B. dependent branch.
C. local branch .
D. foreign branch.
ANSWER: B
61. A branch set up merely for booking orders which are executed by head office is ____.
A. dependent branch.
B. independent branch.
C. foreign branch.
D. local branch.
ANSWER: A
62. Branches not keeping full system of accounting are ________.
A. independent branch.
B. dependent branch.
C. local branch .
D. foreign branch.
ANSWER: B
63. All branch expenses such as rent, salary, are paid by the head office in case of _____.
A. independent branch.
B. local branch.
C. local branch.
D. dependent branch.
ANSWER: D
64. Dependent branch make _______.
A. only cash sales.
B. only credit sales.
C. cash and credit sales.
D. installment sales.
ANSWER: C
65. Under stock and debtors system the head office opens _________.
A. branch adjustment account.
B. branch debtors account.
C. branch creditors account .
D. branch cash account.
ANSWER: A
66. Which of the following is to be recorded in an income and expenditure account?
A. Purchase of a fixed asset
B. Capital expenditure incurred on a fixed asset
C. Profit on the sale of a fixed asset
D. Sale of a fixed asset
ANSWER: C
67. Under branch accounts debtors system, the depreciation of an asset is _______.
A. show in debtors account.
B. shown in debit side of branch account.
C. not shown in branch account .
D. shown in credit side of branch account.
ANSWER: C
68. Under branch accounts debtors system, opening balance of assets are recorded in ____.
A. credit side.
B. debit side.
C. first credit and debit side.
D. first debit and credit side.
ANSWER: A
69. Under branch accounts debtors system, closing balance of assets are recorded in ________.
A. credit side.
B. debit side.
C. first credit and debit side.
D. first debit and credit side.
ANSWER: A
70. Under branch accounts debtors system, opening balance of liabilities are recorded in ___________.
A. first credit and debit side.
B. first debit and credit side.
C. credit side.
D. debit side.
ANSWER: C
71. Under branch accounts debtors system, closing balance of liabilities are recorded in _________.
A. first credit and debit side.
B. first debit and credit side.
C. credit side.
D. debit side.
ANSWER: D
72. Under branch accounts debtors system, goods sent to branch account is recorded in _________.
A. debit side.
B. credit side.
C. asset side .
D. liabilities side.
ANSWER: A
73. Under branch accounts debtors system, loading on goods sent to branch adjusted in ________.
A. debit side.
B. credit side.
C. asset side .
D. liabilities side.
ANSWER: B
74. Under branch accounts debtors system, bad debts, discount allowed to debtors is ________.
A. shown in debit side.
B. shown in credit side.
C. shown in asset side .
D. not shown.
ANSWER: B
75. Under branch accounts debtors system, credit sales is _______.
A. shown in debit side.
B. shown in credit side.
C. shown in asset side .
D. not shown.
ANSWER: A
76. The difference between goods sent by head office and received by the branch is known as
___________.
A. goods in transit.
B. goods in godown.
C. goods in production.
D. goods in warehouse.
ANSWER: A
77. Under stock and debtors system of branch account, branch adjustment account is opened when goods
sent to branch is at ________.
A. cost price.
B. invoice price.
C. market price.
D. normal price.
ANSWER: B
78. Under stock and debtors system of branch account, the account prepared to record all the transactions
relating to branch debtors is recorded in ________.
A. branch expenses account.
B. branch adjustment account.
C. branch debtors account.
D. branch creditors account.
ANSWER: C
79. In pure single entry which account is recorded?
A. Personal.
B. Real.
C. Nominal.
D. Asset.
ANSWER: A
80. All personal, real and nominal accounts are opened in ________.
A. single entry system.
B. double entry system.
C. accrual system.
D. mercantile system.
ANSWER: B
81. Only personal account and cash account are opened in ________.
A. single entry system.
B. double entry system.
C. accrual system.
D. mercantile system.
ANSWER: A
82. Trial balance can be prepared in _________.
A. single entry system.
B. double entry system.
C. accrual system.
D. mercantile system.
ANSWER: B
83. Honorarium is a kind of remuneration paid to a person who is not the employee of a non-profit
organization. Which of the following statements is true about the honorarium payment?
A. Its a revenue expenditure
B. Its a Capital expenditure
C. It is not recorded in the books of accounts
D. None of the above
ANSWER: A
84. Which of the following is the accounting equation for a non-profit organization?
A. Asset = Capital + Liabilities
B. Capital + Liabilities = Assets
C. Accumulated fund + Liabilities = Assets
D. Liabilities = Asset + Accumulated fund
ANSWER: C
85. Balance sheet cannot be prepared ________.
A. in single entry system.
B. in double entry system.
C. with the help of cash book.
D. with the help of bank account.
ANSWER: A
86. In single entry system, net worth method is also called ________.
A. double entry system .
B. mercantile system.
C. statement of affairs method.
D. accrual system.
ANSWER: C
87. Difference between net worth at the beginning of the year and at the end of the year represents
_________.
A. capital balance.
B. cash balance.
C. pass book balance.
D. profit or loss.
ANSWER: D
88. Opening capital can be found by preparing ________.
A. cash book.
B. bank account.
C. statement of affairs.
D. statement of bank pass book.
ANSWER: C
89. A statement of affairs is just like a _________.
A. balance sheet.
B. profit and loss account.
C. cash account.
D. trading account.
ANSWER: A
90. In statement of affairs assets are shown on the __________.
A. right hand side.
B. left hand side.
C. left hand side top.
D. left hand side bottom.
ANSWER: A
91. In statement of affairs liabilities are shown on the __________.
A. right hand side.
B. left hand side.
C. right hand side top.
D. right hand side bottom.
ANSWER: B
92. Under single entry system, closing capital can be found by preparing a statement of affairs ____________.
A. at the end of the year.
B. at the beginning of the year.
C. at the end of every month.
D. at the end of every quarter.
ANSWER: A
93. Under single entry system, opening capital can be found by preparing a statement of affairs ____________.
A. at the end of the year.
B. at the beginning of the year.
C. at the end of every month.
D. at the end of every quarter.
ANSWER: B
94. Under single entry system in net worth method, drawings is added with _______.
A. opening capital.
B. closing capital.
C. additional capital.
D. drawings.
ANSWER: B
95. Under single entry system in net worth method, additional capital is deducted with __________.
A. opening capital.
B. closing capital.
C. additional capital.
D. drawings.
ANSWER: B
96. Under single entry system in net worth method, opening capital is subtracted from _________.
A. opening capital.
B. closing capital.
C. additional capital.
D. drawings.
ANSWER: B
97. Under single entry system in conversion method, a total debtors account is prepared to find out ___________.
A. credit sales.
B. cash sales.
C. credit purchases.
D. cash purchases.
ANSWER: A
98. Under single entry system in conversion method, a total debtors account is prepared to find out __________.
A. credit purchases.
B. cash purchases.
C. purchase returns.
D. closing balance of debtors.
ANSWER: D
99. Subscription received but not yet earned is considered as an ____________.
A. Asset
B. Liability
C. Income
D. Expenditure
ANSWER: B
100. Total creditors account is prepared to find out ___________.
A. credit sales.
B. cash sales.
C. credit purchases.
D. cash purchases.
ANSWER: C