Home » MCQs » Financial Accounting Multiple Choice Questions#3


Goods of $1,000 purchased from Mr. “A” were recorded in sales book, the rectification of this error will:

A)  Increase the gross profit WRONG ANSWER

B)  Reduce the gross profit RIGHT ANSWER!!!

C)  Have no effect on gross Profit WRONG ANSWER

D)  None of the given options


Which of the following account will be credited when a typewriter is sold that has been used in the office?

A)  Purchase Account WRONG ANSWER

B)  Sales Account WRONG ANSWER

C)  Cash Account WRONG ANSWER

D)  Office Equipment Account RIGHT ANSWER!!!


When one or both aspects of a transaction are recorded in the wrong class or category of account, this is called:

A)  Error of principle RIGHT ANSWER!!!

B)  Error of omission WRONG ANSWER

C)  Error of commission WRONG ANSWER

D)  Error of original entry WRONG ANSWER


Which of the following item must be recorded in the adjusted Cash Book in order to bring it in line with the entries in the Bank Statement?

A)  Bank charges RIGHT ANSWER!!!

B)  An error on the Bank Statement WRONG ANSWER

C)  An uncredited deposit WRONG ANSWER

D)  An unpresented cheque WRONG ANSWER


It is supposed that on 31st December, 2007, the sundry debtors are amounted to $40,000. On the basis of past experience, it is estimated that 10% of the sundry debtors are doubtful. Actual bad debts are $ 1600. What amount of new provision for doubtful debts will be credited in profit & loss account



C)  $2400RIGHT ANSWER!!!



Which of the following is an example of operating expense?

A)  Purchasing operating equipment WRONG ANSWER

B)  Purchasing a vehicleWRONG ANSWER

C)  Purchasing cleaning services RIGHT ANSWER!!!

D)  buying a computerWRONG ANSWER


Which of the following would NOT be considered as a component of 'cost' of stock?

A)  Transportation inward costs WRONG ANSWER

B)  Import duties WRONG ANSWER

C)  Salaries of selling staff RIGHT ANSWER!!!

D)  Purchase price WRONG ANSWER


Which of the following will be debited, if cash is drawn by Proprietor?

A)  Proprietor’s drawings RIGHT ANSWER!!!

B)  Proprietor’s cash WRONG ANSWER

C)  Proprietor’s capital WRONG ANSWER

D)  Out flows WRONG ANSWER


Which of the following is TRUE about the treatment of insurance paid in advance $ 1200?

A)  Current assetRIGHT ANSWER!!!

B)  Current liability WRONG ANSWER

C)  Short term liabilityWRONG ANSWER

D)  Fixed assetWRONG ANSWER


When closing stock is given in trial balance, then it will effect:

A)  Trading and Profit & Loss account only WRONG ANSWER

B)  Balance sheet only WRONG ANSWER

C)  Owner's equity only WRONG ANSWER

D)  Trading and Profit & Loss account and Balance sheet RIGHT ANSWER!!!

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