Top 1000+ Solved Financial Accounting MCQ Questions Answer
Q. Trade discount allowed at the time of Sale of goods.
a. Is recorded in Sales Book
b. Is recorded in Cash Book
c. Is recorded in Journal
d. Is not recorded in Books of Accounts
Q. The Periodical total of the Sales Return Book is posted to the
a. Debit of Sales Account
b. Debit of Sales Return Account
c. Credit of Sales Return Account
d. Debit of Debtors Account
Q. If the Petty Cash fund is not reimbursed just prior to year end and an appropriate adjusting entry is not made, then
a. The petty cash account is to be returned to the company‘s cashier
b. Expenses are overstated and Cash is understated
c. Cash is overstated and expenses are understated
d. Cash is overstated and expenses are overstated
Q. XYZ Ltd. Paid wages of ` 8,000 for erection of machinery. The journal entry for the transaction is
a. Debit wages and credit cash
b. Debit machinery and credit cash
c. Debit wages and credit erection charges
d. Debit machinery and credit erection charges
Q. Purchase of goods on credit
a. Increases Liabilities
b. Increases Assets
c. Increases both Assets and Liabilities
d. Decreases Assets
Q. Purchase of Raw Material for Cash
a. Increases total Assets
b. Leaves total Assets unchanged
c. Increases total Fixed Assets
d. Increases total Current Assets
Q. Which of the following is not an Asset?
a. Stock of stationery
b. Goodwill
c. Profit and Loss Account (Credit Balance)
d. Accounts Receivable
Q. The process of balancing of an account involves equalization of both sides of the account. If the debit side of an account exceeds the credit side, the difference is put on the credit side. The said balance is(i) A Debit balance (ii) A Credit balance (iii) An expenditure or an Asset (iv) An Income or a Liability
a. Only (ii) above
b. Only (iv) above
c. Both (i) and (iii) above
d. Both (ii) and (iii) above
Q. Ledger is also called
a. Principal book of accounts ;
b. Cash books ;
c. Subsidiary book ;
d. None of these
Q. Which of the following transactions of a business is/ are recorded in Journal Proper?(i) Purchase of goods on credit (ii) Sale of Office Furniture for cash (iii) Discounting of Bill of Exchange with a bank (iv) Endorsement of a Bill of Exchange in settlement of debt of the business
a. Only (i) above
b. Only (iv) above
c. Both (ii) and (iv) above
d. (i),(iii) and (iv) above
Q. Which of the following statements is/are true?(i) Drawings Account is a Nominal Account (ii) Capital Account is a Real Account (iii) Sales Account is a Nominal Account (iv) Outstanding salaries account is a Nominal Account (v) Patents Account is a Personal Account
a. Only (i) above
b. Only (iii) above
c. Both (ii) and (iii) above
d. Both (ii) ,(iv) and (v)above
Q. The entry to record the collection of cash from Sundry Debtors would involve a(i) Debit to Sundry Debtors (ii) Debit to Cash Account (iii) Credit to Sundry Debtors (iv) Credit to Cash Account
a. Only (i) above
b. Only (iii) above
c. Both (ii) and (iii) above
d. Both (i) and (iv) above
Q. ABC Ltd. makes payments to its Sundry Creditors through cheques and the Cash Discount received on these payments is recorded in the Triple-columnar Cash Book. In the event of dishonour of any such cheques, the discount so received should be written back through (i) A debit to discount column of the Cash Book (ii) A credit to discount column of the Cash Book (iii) A credit to bank column of the Cash Book (iv) A debit to Discount Account through Journal Proper (v) A credit to Creditor‘s Account through Journal Proper
a. Only (i) above
b. Only (ii) above
c. Both (i) and (iii) above
d. Both (iv) and (v) above
Q. R Ltd. makes purchases on credit. If the purchases are not as per the specifications, the companyreturns them to the suppliers. The book, that is used to record such returns is
a. Returns Inward Book
b. Returns Outward Book
c. Cash Book
d. Journal Proper
Q. If Office Equipment is purchased for cash, what effect will this transaction have on the financialposition of the company?
a. There is no change in the Assets, Liabilities and Owners‘ Equity
b. There is a decrease in Assets, increase in Liabilities and no change in Owners‘ Equity
c. There is a decrease in Assets, no change in Liabilities and a decrease in Owners‘ Equity
d. There is an increase in Assets, decrease in Liabilities and no change in Owners‘ Equity