Accounting MCQs with answers PDF | Advanced MCQs

In this post, we are covering — accounting MCQs with answers. The MCQs are taken from three different topics of Accounting: SUBSIDIARY BOOKS, CASH BOOK, Capital and revenue expenditure and incomes

Accounting MCQs with answers

TopicsNumber of MCQs
SUBSIDIARY BOOKS3
CASH BOOK13
Capital and revenue expenditure and incomes29
Total MCQs45

SUBSIDIARY BOOKS

[1] A note sent by the buyer on return of goods is:

(a) Debit Note

(b) Credit Note

(c) Return Note

(d) None

ANSWER-(b)

[2] Which of the following’ is not a subsidiary book?

(a) Sales Book

(b) Purchases Book

(c) Cash Book

(d) BIR Book.

ANSWER-(d)

[3] Purchase of furniture on credit should be recorded in __

(a) purchase book

(b) sales book

(c) cash book

(d) journal

ANSWER-(d)

CASH BOOK

[1] Double entry in Cash Book is completed when:

 (a) Salaries are paid by cheque

(b) Withdrawal of money from bank for personal use

(c) Deposited cash into bank

(d) None of these

ANSWER-(c)

[2] Imprest amount – ~ 500. What will be the amount of reimbursement if following expenses were incurred by the petty cashier during the month-Telephone = ~ 150, Tiffin = ~ 50, small Repairs = ~ 30 general expenses = ~ 100.

(a) 300

(b) 170

(c) 330

(d) 270

ANSWER-(c)

[3] Interest received of ~ 100 was recorded as interest paid. What will be the effect on cash balance?

(a) Cash will reduce by 100.

(b) Cash will increase by 200.

(c) Cash will reduce by 200.

(d) No effect on cash balance.

ANSWER-(c)

[4] In three column Cash Book, when does contra entry occurs?

(a) Withdrawal of cash from bank

(b) Payment to creditors

(c) Withdrawal of cash from bank for personal use

(d) . All of the above

ANSWER-(a)

[4] What will be journal entry when cash is withdrawn from the bank for personal use?

(a) Drawings Alc debit, Bank Alc credit

(b) Cash Alc debit, Bank Nc credit

(c) Bank Alc debit, Drawings Alc credit

(d) Bank Alc debit, Capital Alc credit

ANSWER-(a)

[5] Rent due for the month of March will appear of the cash book.

(a) on the receipt side

(b) on the payment side

(c) as a Contra Entry

(d) no where

ANSWER-(d)

[6] Where two aspects of a transaction are posted in the Cash Book, such an entry is called

(a) Double Entry

(b) Debit Entry

(c) Credit Entry

(d) Contra Entry

ANSWER-(d)

[7] Rent due for the month of March will appear in the Cash book.

(a) on the receipt side

(b) on the payment side

(c) as a contra entry

(d) no where

ANSWER-(d)

[8] Postage stamps purchased for ~ 30 by business. This transaction will be recorded in:

(a) Purchase book

(b) Cash Book

(c) Petty Cash Book

(d) Journal

ANSWER-(c)

[9] Petty cash may be used to pay

(a) The expenses relating to postage and conveyance.

(b) Salary to administrative staff

(c) For the purchase of furniture and fixtures

(d) For the purchase of raw material.

ANSWER-(a)

[10] While balancing the three column cash book, the discount columns are:

(a) Totaled but not adjusted

(b) Totaled and also adjusted 

(c) Totaled but not balanced

(d) Balanced but not totaled

ANSWER-(c)

[11] The Balance on the debit side of the bank column in Cash Book indicates

(a) total amount withdrawn from the Bank

(b) Total amount deposited in the Bank

(c) Cash at Bank

(d) Bank overdraft

ANSWER-(d)

[12] When two aspects in one transaction are recorded in the Cash Book itself, it is called:

(a) Debit entry

(b) Double entry

(c) Single entry

(d) Contra entry

ANSWER-(d)

[13] Cash book is a type of __ but treated as a __ of accounts.

(a) subsidiary book, principle book

(b) principle book, subsidiary book

(c) subsidiary book, subsidiary book

(d) principle book, principle book

ANSWER-(a)

Capital and revenue expenditure and incomes

[1] Brokerage on the issue of shares and debentures is an expenditure:

(a) revenue

(b) capital

(c) deferred revenue

(d) partly capital partly revenue

ANSWER-(c)

[2] What is the difference between deferred revenue expenditure and prepaid expenses?

(a) Accounting treatment

(b) Estimation of amount

(c) Benefit for more than one accounting period

(d) Nature of expenditure

ANSWER-(b)

[3] Machinery was – purchased for ~ 10 ,000 and ~ 500 paid as wages for erection of machinery? The account that should be debited is:

(a) WagesNc

(b) Machinery Nc

(c) Repairs Nc

(d) None

ANSWER-(b)

[4] An old machinery is purchased for ~ 10,000. Installation charges of ~ 1,000 were incurred. Repairs to the old machinery = ~ 7,000 Repairs Account will be debited by:

 (a) ~ 7,000

(b) ~ 8 ,000

(c) Nil

(d) None of the above

ANSWER-(c)

[5] X Limited spent ~ 10,00,000 towards construction of office building. It also spent 50,000 towards construction of temporary store and used the store for building construction purpose. On completion of building construction the store was dismantled and the materials were sold for { 20,000. Mr. A, a supervisor was paid {60,000 as his salary during the period of construction, and he devoted 2J3,d of his time for the building construction, The capitalized cost of office building Was:

(a) {1 0,00,000

(b) {11,10,000

(c) {10,90,000

(d) {1 0,70 ,000

ANSWER-(d)

[6] A truck was purchased and after sometime, the name of the company was painted on it for advertisement purpose for { 1,000/ – this is:

(a) Capital Expenditure

(b) Deferred Revenue Expendture

(c) Revenue Expenditure

(d) None.

ANSWER-(c)

[7] Medium term loan obtained from bank for augmenting· working capital is:

(a) Revenue Expenditure

(b) Capital Expenditure

(c) Revenue Receipt

(d) Capital Receipt.

ANSWER-(d)

[8] If repairs of { 100 are done on a machinery then which account will be debited?

(a) Machinery Nc

(b) Repairs Nc

(c) Capital Nc

(d) . Wages Nc.

ANSWER-(b)

[9] Heavy advertisement expenditure should be treated as:

(a) Deferred Reveroo Experx:fllure

(b) Revenue expenditure

(c) Capital Expenditure

(d) None of these.

ANSWER-(a)

[10] Deferred Revenue Expenditure to the extent of not written off, is shown in Balance Sheet under the head: –

 (a) Miscellaneous Expenditure

(b) Capital

(c) Current Liabilities

(d) Fixed Assets.

ANSWER-(a)

[11] ‘A’ purchased a Car on 1.06.2010 for ~ 5,60,000 and incurred ~ 25,000 for repairs, etc. He paid ~ 10,000 as insurance, ~ 1,500 for petrol. What amount should be debited to Car A/c?

(a) ~ 5,60,000

(b) ~ 5,96,500

(c) ~ 5 ,95 ,000

(d) ~ 5,85 ,000

ANSWER-(b)

[12] XYZ Limited has a house for 3 years. It used it as a guest house. Now it incurred an expenditure for repairing the roof of this house. Expenses incurred on such repairs are: –

(a) Capital Expenditure

(b) Revenue Expenditure

(c) Deferred Revenue Expenditure

(d) None of the above.

ANSWER-(c)

[13] Which of the following Expenses will not be included in the acquisition of the plant?

(a) Purchase Price of Plant

(b) Installation Expenses

(c) Annual Maintenance charges

(d) Delivery charges of the plant.

ANSWER-(c)

[14] A new machine was purchased in Delhi and brought to Jaipur factory site for installation. The machine was damaged during transit and repair expenses were incurred amounting to ~ 20,000. Such repair will be treated as:

(a) Capital expenditure

(b) Revenue expenses

(c) Deferred revenue expenditure

(d) Reserves

ANSWER-(b)

[15] Revenue Expenditure wrongly recorded as Capital Expenditure will result in:

(a) Overstatement of net profit and understatement of assets

(b) Overstatement of net profit and overstatement of assets

(c) Understatement of net profit and overstatement of assets

(d) Understatement of net profit and understatement of assets

ANSWER-(b)

[16] Which of the following statement is false?

(a) Expenses in connection with obtaining a licence for running the Cinema is Capital expenditure

(b) Heavy advertisement expenses to introduce a new product is deferred revenue expenditure

(c) ‘Cost of construction of building including cost of temporary huts for storing building materials is capital expenditure

(d) The cost of Rings and Pistons of an engine changed increase its fuel efficiencyiis revenue expendit

ANSWER-(d)

[17] Expenditure incurred of ~ 20,000 for trial run of a newly installed machinery would be:

(a) Preliminary expenditure

(b) Capital expenditure

(c) Revenue expenditure

(d) Deferred revenue expenditur

ANSWER-(b)

[18] Amount spent on increasing the seating capacity in cinema hall is:-

(a) Capital Expenditure

(b) Revenue Expenditure

(c) Deferred Revenue Expenditure

(d) None of the above.

ANSWER-(a)

[19] Renewal fee for patent is a:

(a) Capital expenditure

(b) Revenue expenditure

(c) Deferred revenue expenditure

(d) Development expenditure

ANSWER-(b)

 [20] Shivam purchased an old building for ~ 50 lakhs. He demolished the building for the purpose of constructing a shopping mall on the same site. Demolition cost was. ~1 lakh. Construction cost of the mall was”~ 35 lakhs, He inaugurated it and the inauguration cost was ~ 50,000 Capital Expenditure was:

(a) ~ 86,00,000

(b) ~ 86,50,000

(c) ~ 85,00,000

(d) ~ 85,50,000

ANSWER-(a)

[21] Rohit is in real estate business. On 6thJune, 2014 he sold a penthouse for ~ 4 crores (costing ~ 3.5 crores), The amount realized is a …..

 (a) Capital receipt and profit should be transferred to capital reserve.

(b) Revenue receipt and profit should be transferred to Profit and Loss Alc.

(c) Capital receipt and profit should be transferred to Profit and Loss Alc.

(d) Revenue receipt and profit should be transferred to General Reserve Alc.

ANSWER-(b)

[22] Deepawali advance given to employees is _________ “

(a) capital expenditure

(b) revenue expenditure

(c) deferred revenue expenditure

(d) not an expenditure

ANSWER-(d)

[23] The total of discount column on the , debit side of the cash book is, posted in the:

(a) Debit side of discount received account

(b) Credit side of discount received account

(c) Debit side of discount allowed account

(d) Credit side of discount allowed account.

ANSWER-(c)

 [24] If repairs cost is ~ 30,000, whitewash expenses are ~ 5,000, cost of extension of building is ~ 3,00,000 and cost of improvement in electrical wiring system is ~ 30,000 the amount of Revenue expenditure will be:

(a) f 65,000

(b) f 35,000

(c) f 3,65,000

(d) f 3,35,000

ANSWER-(b)

[25] The unexpired portion of capital expenditure is shown in the financial statements:

(a) As an asset

(b) As an income

(c) As a liability

(d) As an expense.

ANSWER-(a)

[26] Legal expenses incurred in defending a suit for breach of contract to supply goods is a:

(a) Revenue expenditure

(b) Capital expenditure

(c) Deferred revenue expenditure

(d) None of above.

ANSWER-(a)

[27] Money spent to reduce Working/revenue expanses is:

(a) Revenue Expenditure

(b) Deferred Revenue Expenditure

(c) Capital Expenditure

(d) None of above.

ANSWER-(c)

[28] If repair cost is f 30,000, whitewash expenses are ‘{ 6,000, cost of extension of building is .f 3,00,000 and cost of improvement in electrical wiring system is f 22,800, the amount of expense is:

(a) ‘{ 3,58,800

(b) f 52,800

(c) f 36,000

(d) ‘{ 58,800

ANSWER-(a)

[29] Insurance claim received on account of machinery damaged by fire:

(a) Capital receipt.

(b) Revenue receipt.

(c) Capital expenditure.

(d) Business expenditure.

ANSWER-(a)

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