Top 1000+ Solved Financial Accounting MCQ Questions Answer
Q. Which of the following is not correct?
a. Errors which affect one account can be errors of posting
b. Errors of omission arise when any transaction is left to be recorded
c. Errors of carry forward from one year to another year affect both Personal and Real A/c
d. Errors of commission arise when any transaction is recorded in a fundamentally incorrect manner
Q. Which of the following errors is an error of omission?
a. Purchase of ` 2,000 has been recorded in the Sales Return Book
b. Repairs to machinery has been debited to Machinery Accounts
c. The total of purchase journal has not been posted to the Purchase Account
d. Legal charges paid to Mr. Lawyer have been debited to his account
Q. If goods worth ` 1,750 returned to a supplier is wrongly entered in sales return book as ` 1,570 , then
a. Net Profit will decrease by ` 3,140 ;
b. Gross Profit will increase by ` 3,320
c. Gross Profit will decrease by ` 3,500 ;
d. Gross Profit will decrease by ` 3,320
Q. For the past 3 years, DK Ltd. has failed to accrue unpaid wages earned by workers during the last week of the year. The amounts omitted, which were considered material, were as follows: March 31,2010 - ` 56,000 March 31, 2011 - ` 51,000 March 31, 2012 - ` 64,000 The entry on March 31, 2012 to rectify these omissions would include a
a. Credit to wage expense for ` 64,000
b. Debit to wage expense for ` 64,000
c. Debit to wage expense for ` 51,000
d. Debit to wage expense for ` 13,000
Q. Purchase journal is kept to record
a. All purchases of goods ;
b. All credit purchases of goods ;
c. All credit purchases;
d. None of these
Q. The beginnings inventory of the current year is overstated by ` 5,000 and closing inventory isoverstated by ` 12,000. These errors will cause the net income for the current year by
a. 17,000 (overstated)
b. 12,000 (understated)
c. 7,000 (overstated)
d. 7,000 (understated)
Q. Which of the following errors affects the agreement of a Trial Balance?
a. Mistake in balancing an account
b. Omitting to record a transaction entirely in the subsidiary books
c. Recording of a wrong entry in the subsidiary books
d. Posting an entry on the correct side but in the wrong account
Q. Which of the following statements is/are true? (i) An error in casting the subsidiary books is an error of commission (ii) An error in wrong casting of the sales day book will not affect the personal accounts of debtors (iii) Mistake in transferring the balance of an account to the Trial Balance will not affect the agreement of the Trial Balance (iv) The mistake of treating a liability as an income or vice versa will not affect the agreement of a Trial Balance
a. Only (i) above
b. Only (ii) above
c. Both (i) and (ii) above
d. (i),(ii) and (iv) above
Q. Which of the following should not be treated as revenue expenditure?
a. Interest on loans and debentures
b. Annual fire insurance premiums on Plant and Equipment
c. Sales tax paid in connection with the purchase of office equipment
d. Small expenditures on long- lived assets, such as ` 20 for a paper weight.
Q. Capital expenditure is an expenditure which
a. Benefits the current accounting period
b. Will benefit the next accounting period
c. Results in the acquisition of a permanent asset
d. Results in the acquisition of a current asset
Q. Which of the following is not a deferred revenue expenditure?
a. Expenses in connection with issue of equity shares
b. Preoperative expenses
c. Heavy advertising expenses to introduce a new product
d. Legal expenses incurred in defending a suit for breach of contract to supply goods
Q. Any donation received for a specific purpose is a
a. Liability ;
b. Assets ;
c. Revenue receipts ;
d. Capital receipts
Q. Which of the following is an item of capital expenditure?
a. Research and development costs during the year
b. Interest on borrowed fund utilized for acquisition of Office Furniture
c. Installation charges paid in conjunction with the purchase of Office Equipment
d. Monthly rent of a machinery used in the business
Q. Which of the following statements is true?
a. Provision for doubtful debts represents the amount that cannot be collected
b. The distinction between capital and revenue items is important because it is of fundamental importance to the determination of profits
c. Goods lost by fire need not be accounted for since they are not sales
d. Free samples received are business gains
Q. The balance of which of the following accounts do not disappear, once they are debited/credited toTrading Account.
a. Sales
b. Purchases
c. Inward returns
d. Closing stock