Financial Accounting MCQ Questions and Answers Part – 3

Financial Accounting MCQ Questions and Answers Part – 1

Financial Accounting MCQ Questions and Answers Part – 2

Financial Accounting MCQ Questions and Answers Part – 3

101. Total creditors account is prepared to find out _______.
A. opening balance of debtors .
B. closing balance of debtors.
C. opening balance of creditors.
D. closing balance of creditors.
ANSWER: D
102. A bills receivable account is prepared to ascertain bills _______.
A. accepted.
B. received.
C. drawn.
D. endorsed.
ANSWER: B
103. A bills payable account is prepared to ascertain bills __________.
A. accepted.
B. received.
C. drawn.
D. endorsed.
ANSWER: A
104. Bills receivable dishonored will be posted to _______ side of debtors account.
A. debit.
B. credit.
C. outside.
D. inside.
ANSWER: A
105. Bills receivable dishonored will be posted in ___________.
A. debit.
B. credit.
C. outside .
D. inside.
ANSWER: B
106. Bills payable dishonoured will be posted in which side of bills payable account?
A. Debit.
B. Credit.
C. Outside.
D. Inside.
ANSWER: C
107. Opening balance of debtors will be posted in which side of debtors account?
A. Debit.
B. Credit.
C. Outside.
D. Inside.
ANSWER: C
108. Closing balance of creditors will be posted in which side of creditors account?
A. Credit.
B. Debit.
C. Outside.
D. Inside.
ANSWER: B
109. Opening balance of creditors will be posted in which side of creditors account?
A. Debit.
B. Credit.
C. Outside.
D. Inside.
ANSWER: D
110. Cash account opening balance will appear in _______.
A. debit .
B. credit.
C. outside.
D. inside.
ANSWER: A
111. Cash account closing balance will appear in __________.
A. debit .
B. credit.
C. outside.
D. inside.
ANSWER: B
112. Bills payable account opening balance will appear in ____________.
A. debit .
B. credit.
C. outside.
D. inside.
ANSWER: D
113. Bills payable account closing balance will appear in ____________.
A. debit .
B. credit.
C. outside.
D. inside.
ANSWER: C
114. Bills receivable account opening balance will appear in _________.
A. debit .
B. credit.
C. outside.
D. inside.
ANSWER: A
115. An agreement of hiring with option to buy is ____________.
A. installment system.
B. credit system.
C. hire purchase system.
D. cash system.
ANSWER: C
116. Under which system, ownership is transferred on payment of final installment?
A. Installment system.
B. Credit system.
C. Hire purchase system.
D. Cash system.
ANSWER: C
117. Under which system ownership is transferred on signing of the agreement?
A. Installment system.
B. Credit system.
C. Hire purchase system.
D. Cash system.
ANSWER: A
118. Under hire purchase system the buyer is called _________.
A. buyer.
B. hirer.
C. hire vendor.
D. debtor.
ANSWER: B
119. Under hire purchase system the seller is called _________.
A. buyer.
B. hirer.
C. hire vendor.
D. debtor.
ANSWER: C
120. Under hire purchase system the relationship of hirer and hire vendor is ______.
A. buyer and seller.
B. bailor and bailee.
C. pawner and pawnee.
D. debtor and creditor.
ANSWER: B
121. Under installment system the relationship between the buyer and seller is that of a _________.
A. buyer and seller.
B. bailor and bailee.
C. pawner and pawnee.
D. debtor and creditor.
ANSWER: D
122. Under hire purchase system, the risk of loss is borne by ____________.
A. buyer.
B. hirer.
C. debtor.
D. hire vendor.
ANSWER: D
123. Under installment system the risk of loss is borne by ________.
A. buyer.
B. hirer.
C. hire vendor.
D. debtor.
ANSWER: A
124. Under hire purchase system who has the right of sell __________.
A. buyer.
B. hirer.
C. hire vendor.
D. debtor.
ANSWER: C
125. Under hire purchase system, if installment is not paid the hire vendor has right to ___________.
A. sell the goods.
B. repossession of goods.
C. repair the goods.
D. purchase the goods.
ANSWER: B
126. Under hire purchase system, the agreement can be _________.
A. renewed.
B. registered.
C. terminated.
D. endorsed.
ANSWER: C
127. Hire purchase system is governed by ___________.
A. Hire Purchase Act 1972.
B. Hire Purchase Act 1973.
C. Hire Purchase Act 1974.
D. Hire Purchase Act 1975.
ANSWER: A
128. Installment system is governed by __________.
A. Hire Purchase Act.
B. Sale of Goods Act.
C. Installment Act.
D. Properties Registration Act.
ANSWER: B
129. Under hire purchase system, the retail price of the articles is called ________.
A. MRP.
B. wholesale price.
C. retail price.
D. cash price.
ANSWER: C
130. Cash price plus interest is _________.
A. installment price.
B. hire purchase price.
C. maximum retail price.
D. retail price.
ANSWER: B
131. The advance amount under hire purchase system is called __________.
A. cash price.
B. retail price.
C. interest.
D. down payment.
ANSWER: D
132. Under hire purchase system, each installment is treated as __________.
A. interest.
B. cash price.
C. hire charges.
D. advance.
ANSWER: C
133. Under hire purchase system, interest is calculated on _______.
A. cash price.
B. hire purchase price.
C. MRP.
D. outstanding balance.
ANSWER: D
134. If the hire purchaser fails to make payment of any installment, it is called _______.
A. default.
B. repossession.
C. sale.
D. purchase.
ANSWER: A
135. If the hire vendor may take away all the goods on which there is default of installment it is called
____________.
A. repossession .
B. partial repossession.
C. complete repossession.
D. purchase.
ANSWER: C
136. The hire vendor takes away only a portion of the goods on which there is default of Installments it is
called _________.
A. repossession .
B. partial repossession.
C. complete repossession.
D. purchase.
ANSWER: B
137. In the books of hirer, for payment of down payment, hire vendor account will be _______.
A. debited .
B. credited.
C. rectified.
D. reversed.
ANSWER: A
138. In the books of hirer, for payment of installment hire vendor account will be ___________.
A. rectified.
B. credited.
C. debited.
D. reversed.
ANSWER: A
139. In the books of hirer, for interest due at the end of the year hire vendor account will be _______.
A. debited.
B. credited.
C. rectified.
D. reversed.
ANSWER: B
140. In the books of Hirer, the interest and depreciation account will be transferred to ______.
A. Trading account.
B. P & L account.
C. P & L appropriation account.
D. Balance sheet.
ANSWER: B
141. In the books of hirer, when the asset is repossessed hire vendor account will be ______.
A. debited.
B. credited.
C. rectified.
D. reversed.
ANSWER: A
142. In the books of hirer, when the asset is repossessed, asset account will be ______.
A. debited.
B. credited.
C. rectified.
D. reversed.
ANSWER: B
143. In the books of hire vendor, which account will be debited for hire sales _______.
A. buyer.
B. hirer.
C. hire vendor.
D. debtor.
ANSWER: B
144. What is depreciation?
A. Cost of a fixed asset
B. Cost of a fixed assets repair
C. The residual value of fixed asset
D. Portion of a fixed assets cost consumed during the current accounting period
ANSWER: D
145. A company purchased a vehicle for $6000. I will be used for 5 years and its residual value is expected to be Rs.1000. What is the annual amount of deprecation using straight line method of depreciation?
A. Rs.3000
B. Rs.2000
C. Rs.1000
D. Rs.3300
ANSWER: C
146. What is the accumulated deprecation?
A. Sum of all depreciation expenses of a fixed asset
B. Depreciation expenses
C. Cost of depletion of assets
D. Future value of fixed asset
ANSWER: A
147. A fixed asset was bought for Rs.5000. Its accumulated depreciation is Rs.3000 and rate of depreciation is 20%. Calculate its depreciation expenses for the current accounting period using reducing balance method?
A. Rs.600
B. Rs.500
C. Rs.750
D. Rs.400
ANSWER: D
148. Revenue Reserve does not include __________.
A. Profit & Loss Account
B. Secret Reserve
C. General Reserve
D. Securities Premium
ANSWER: D
149. In single entry system of accounting ___________.
A. Dual aspects of a transaction is recorded
B. Single aspect of a transaction is recorded
C. Important transactions are recorded
D. All of them
ANSWER: B
150. Statement of financial position produced from incomplete accounting record is commonly known as
____________.
A. Balance sheet
B. Cash flow statement
C. Statement of affairs
D. Statement of financial operations
ANSWER: C