Top 1000+ Solved Financial Accounting MCQ Questions Answer
Q. Total depreciation of an asset cannot exceed its:
a. Scrap value ;
b. Residual value ;
c. Market value ;
d. Depreciable value
Q. Amount paid to Gagan posted to the credit side of his account would affect
a. Gagan's account ;
b. Cash account ;
c. Cash account and Gagan's account ;
d. None of these
Q. Which of the following statements is/are true ?
a. A sale of an asset is recorded in the Sales Book
b. Total of Return Outward Book is debited to Return Outward Account
c. The balance of Petty Cash Book is a liability
d. Cash Book is a subsidiary book as well as a ledger
Q. Which of the following is true regarding closing entries?
a. They must be followed by reversing entries
b. They transfer the balances in all of the Nominal Accounts to the Trading and Profit and Loss Account
c. They must be made after the reversing entries but before the adjusting entries
d. They must be made after the adjusting entries but before the reversing entries
Q. Closing stock is generally valued at
a. Cost Price
b. Market Price
c. Cost price or Market price whichever is higher
d. Cost price or Market price whichever is lower
Q. Which of the following assets is/are to be valued at the lower of cost and net realizable value?
a. Goodwill
b. Inventories
c. Investments
d. Both (b) and (c) above.
Q. Which of the following methods is not a practical way of realizing revenue?
a. Delivery method
b. Percentage-of-completion method
c. Production method
d. Moving average method
Q. The amount payable to a person as consideration for the use of rights vested in him is
a. Dividend
b. Royalty
c. Purchase consideration
d. Installment
Q. During the year 2011-2012, the value of closing inventory was overstated by ` 25,000. Which of the following is true?
a. The cost of goods sold was overstated during 2011-2012 and income will be understated during 2012-2013
b. The income was overstated during 2011-12 and closing inventory will be overstated during 2012- 2013
c. The retained earnings was overstated during 2011-2012 and retained earnings will be understated during 2012-2013
d. The cost of goods sold was understated during 2011-2012 but retained earnings will not be affected during 2012-2013
Q. Which of the following is true?
a. Error of casting affects personal accounts
b. Omission of a transaction from a subsidiary record affects only one account
c. Error of carry forward affects two accounts
d. Error of principle involves an incorrect allocation of expenditure or receipt between capital and revenue
Q. Journal proper is meant for recording
a. Credit purchase of fixed assets ;
b. Return of goods
c. All such transactions for which no special journal has been kept by the business
d. None of these
Q. The adjustment to be made for income received in advance is:
a. Add income received in advance to respective income and show it as a liability
b. Deduct income received in advance from respective income and show it as a liability
c. Add income received in advance to respective income and show it as asset
d. Deduct income received in advance from respective income and show it as an asset in the Balance Sheet
Q. Which of the following statements is correct?
a. The Trial Balance is prepared after preparing the Profit and Loss Account
b. The Trial Balance shows only balances of Assets and Liabilities
c. The Trial Balance shows only nominal account balances
d. The Trial Balance has no statutory importance from the point of view of law
Q. While finalizing the current year‘s accounts, the company realized that an error was made in the calculation of closing stock of the previous year. In the previous year, closing stock was valued more by ` 50,000. As a result
a. Previous year‘s profit is overstated and current year‘s profit is also overstated.
b. Previous year‘s profit is understated and current year‘s profit is overstated.
c. Previous year‘s profit is overstated and current year‘s profit is understated.
d. There will be no impact on the profit of either the previous year or the current year.