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Financial Accounting MCQs | Financial Accounting Multiple Choice Questions and Answers

Questions
1 Deewali advance given to an employee is
A Revenue Expenditure
B Capital Expenditure
C Not an Expenditure
D Deferred Revenue Expenditure

Answer: Not an Expenditure
2 The process of recording financial data upto trial balance is
A Classifying
B Summarising
C Analyzing
D Book keeping

Answer: Book keeping
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3 Rohit carrying on real estate business sold a piece of land for Rs.4,00,00,000 (cost Rs.3,50,00,000) then the type of receipt is nature and profit on sale is
A Revenue & transferred to P & L a/c
B Capital & transferred to capital reserve
C Capital & transferred to P & L a/c
D Revenue & transferred to general reserve

Answer: Revenue & transferred to P & L a/c
4 Which of the following is wrong?
A Rent is a personal account, outstanding rent is nominal account
B All real and personal accounts are transferred to balance sheet
C Nominal accounts are transferred to P &L account
D Each account is opened separately in ledger

Answer: Rent is a personal account, outstanding rent is nominal account
5 Is root cause for financial accounting
A Social accounting
B Management accounting
C Human resource accounting
D Stewardship accounting

Answer: Stewardship accounting
6 Fixed assets are held by business for
A Generating revenue
B Converting into cash
C Resale
D None of the above

Answer: Generating revenue
7 Which accounting concept specifies thepractice of crediting closing stock to the trading account?
A Matching
B Cost
C Realisation
D Going concern

Answer: Matching
8 Amount spent to increasing the earning capacity is a ...... expenditure
A Capital
B Deferred revenue
C Capital Loss
D Revenue

Answer: Capital
9 Change in the capital A/c of proprietor may occur due to
A Capital Introduced
B Loss incurred
C Profit earned
D All of theabove

Answer: All of theabove
10 Provision for discount on debtors is calculated on the amount of debtors.
A After deducting provision for doubtful debts
B Before deducting provision for doubtful debts
C Before deducting actual debts and provision for doubtful debts
D After adding actual bad and doubtful debts

Answer: After deducting provision for doubtful debts
11 Which of the following is incorrect?
A Outstanding expenses -current asset
B Good will intangible asset
C Sundry debtors -current asset
D Loose tools tangible fixed asset

Answer: Outstanding expenses -current asset
12 The nature of financial accounting is:
A Historical
B Analytical
C Social
D Forward looking

Answer: Historical
13 Which of the following factor is not considered while selecting accounting policies?
A Accountancy
B Prudence
C Substance over form
D Materiality

Answer: Accountancy
14 As per accrual concept, which of the followings is not true
A sales + gross profit = revenue
B revenue –profit = expenditure
C revenue –expenditure = profit
D revenue = profit + expenditure

Answer: sales + gross profit = revenue
15 If nothing is written about the accounting assumption to be followed it is presumed that
A They have not been followed
B They are followed to some extent
C They are followed to some extent
D None

Answer: They have not been followed
16 Valuation of stock in accounting follows the principle of cost price or which ever is lower.
A Net realizable Value
B Market Price
C Average Price
D None of these

Answer: Net realizable Value
17 Which of the following is not a nominal Account?
A Salaries account
B Interest paid
C Commission received
D Outstanding salaries Account

Answer: Outstanding salaries Account
18 Mr. X is a dealer in electronic goods (refrigerator, washing machine, air conditioners, televisions, etc.) He purchased two air conditioners and installed in his showroom. In the books of X the cost two air conditioners will be debited to
A Fixedassets
B Drawing account
C Capital Account
D None of the above

Answer: Fixedassets
19 For every debit there will be an equal creditaccording to
A Dual aspect concept
B Matching concept
C Money measurement concept
D cost concept

Answer: Dual aspect concept
20 Historical cost concept requires the valuation of an asset at
A Replacement value
B Net realizable value
C Market value
D Original cost

Answer: Original cost

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