Home » MCQs » Financial Accounting Multiple Choice Questions#24

1) 

Any expense that gives benefit for a period of less than twelve months is called ________.

A)  Capital Expense
WRONG ANSWER

B)  Revenue Expense
RIGHT ANSWER!!!

C)  Revenue Receipt
WRONG ANSWER

D)  Deferred Expense
WRONG ANSWER


2) 

Prepaid rent given in the Trial Balance will be treated as a (an):

A)  Asset RIGHT ANSWER!!!

B)  Liability WRONG ANSWER

C)  Revenue WRONG ANSWER

D)  Deferred expense
WRONG ANSWER


3) 

If Assets = Rs. 99,500 and Owner's equity = Rs. 50,500 then Liabilities = ?

A)  Rs. 49,000
RIGHT ANSWER!!!

B)  Rs. 55,000
WRONG ANSWER

C)  Rs. 125,000
WRONG ANSWER

D)  Rs. 115,700
WRONG ANSWER


4) 

Sale of goods to Amir is wrongly debited to Umair A/c instead of Amir A/c. Both are debtors of business, this is an example of:

A)  Error of Omission
WRONG ANSWER

B)  Error of Commission
RIGHT ANSWER!!!

C)  Error of Principle
WRONG ANSWER

D)  Error of Original entry
WRONG ANSWER


5) 

Which of the following is TRUE about a merchandising company?

A)  A merchandising company's business is to buy and sell products.
RIGHT ANSWER!!!

B)  A merchandising company must use the perpetual system to account for merchandising inventory.
WRONG ANSWER

C)  A merchandising company's business is to provide services.
WRONG ANSWER

D)  None of the given options
WRONG ANSWER



6) 

Money spent to acquire or upgrade physical assets is known as:

A)  Revenue Expense
WRONG ANSWER

B)  Capital Expense
RIGHT ANSWER!!!

C)  Administrative Expense
WRONG ANSWER

D)  Operating Expense
WRONG ANSWER


7) 

Goods of Rs. 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
WRONG ANSWER


8) 

An amount of Rs. 200 received from Mr. "P" but credited to Mr. "Q" would affect:

A)  Accounts of P & Q
RIGHT ANSWER!!!

B)  Only Cash Account
WRONG ANSWER

C)  Only P’s account
WRONG ANSWER

D)  Only Q’s account
WRONG ANSWER


9) 

__________ is the art of recording, classifying and summarizing the transactions and events of a business and interpreting the results thereof.

A)  Book-keeping
WRONG ANSWER

B)  Accounting
RIGHT ANSWER!!!

C)  Management WRONG ANSWER

D)  Auditing WRONG ANSWER

10) 

What will be debited, if Mohsin commenced business with cash?

A)  Cash account
RIGHT ANSWER!!!

B)  Capital account
WRONG ANSWER

C)  Drawings account
WRONG ANSWER

D)  Proprietor account
WRONG ANSWER




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