Home » MCQs » Financial Accounting Multiple Choice Questions#21

1) 

Which one of the following is NOT true about revenue expenditure?

A)  These are the running expenses of the business
WRONG ANSWER

B)  They improve the financial position of the business
RIGHT ANSWER!!!

C)  They reduce the profit of the concern
WRONG ANSWER

D)  They do not appear in the balance sheet
WRONG ANSWER


2) 

Which one of the following is NOT true about Capital Expenditure?

A)  Creates future benefits
WRONG ANSWER

B)  Incurred to acquire fixed assets
WRONG ANSWER

C)  Incurred to increase the economic life of existing fixed assets
WRONG ANSWER

D)  Reduce the profit of the concern
RIGHT ANSWER!!!


3) 

Which of the following is NOT a type of voucher?

A)  Journal Voucher
WRONG ANSWER

B)  Receipt Voucher
WRONG ANSWER

C)  Payment Voucher
WRONG ANSWER

D)  Drawings Voucher
RIGHT ANSWER!!!


4) 

Which of the following account balance will be shown on debit side of Trial Balance? (It is assumed that all account balances are shown on normal balance).

A)  Capital account
WRONG ANSWER

B)  Sundry creditors account
WRONG ANSWER

C)  Accounts payable account
WRONG ANSWER

D)  Cash account
RIGHT ANSWER!!!


5) 

Accounts Receivable & Inventory are the examples of:

A)  Liquid assets
WRONG ANSWER

B)  Current assets
RIGHT ANSWER!!!

C)  Fixed assets
WRONG ANSWER

D)  Capital assets
WRONG ANSWER


6) 

A Summarized record of transactions related to individuals or things is called a/an

A)  Account RIGHT ANSWER!!!

B)  Voucher WRONG ANSWER

C)  Journal WRONG ANSWER

D)  Trial balance
WRONG ANSWER


7) 

When Capital is increased by an amount, it is recorded on the:

A)  Left or credit side of the account
WRONG ANSWER

B)  Right or debit side of the account
WRONG ANSWER

C)  Left or debit side of the account
WRONG ANSWER

D)  Right or credit side of the account
RIGHT ANSWER!!!


8) 

What would be the affect on the components of the accounting equation, if goods are purchased on cash?

A)  Increase in cash and decrease in equity
WRONG ANSWER

B)  Increase in cash and increase in goods
WRONG ANSWER

C)  Increase in goods and decrease in cash
RIGHT ANSWER!!!

D)  Increase in equipment and increase in equity
WRONG ANSWER


9) 

Prepaid interest 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


10) 

The net income calculated in the income statement for the accounting period is reported on:

A)  Bank Statement
WRONG ANSWER

B)  Statement of retained earnings
WRONG ANSWER

C)  Statement of cash flows
RIGHT ANSWER!!!

D)  None of the given options
WRONG ANSWER




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