Home » MCQs » Financial Accounting Multiple Choice Questions#13

1) 

Rent receivable (given in trial balance) is an item of:

A)  Balance SheetRIGHT ANSWER!!!

B)  Profit & Loss AccountWRONG ANSWER

C)  Trading Account
WRONG ANSWER

D)  Both Balance Sheet and Profit & Loss Account
WRONG ANSWER


2) 

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

A)  Trading account only
WRONG ANSWER

B)  Balance sheet only
WRONG ANSWER

C)  Owner's equity only
WRONG ANSWER

D)  Both Trading account and Balance sheet
RIGHT ANSWER!!!


3) 

Which of the following account is affected from the Drawings of cash in sole- proprietorship business?

A)  Capital account
RIGHT ANSWER!!!

B)  Shareholder account
WRONG ANSWER

C)  Liability account
WRONG ANSWER

D)  Expense account
WRONG ANSWER


4) 

An asset is considered to be a current asset if:

A)  It has been bought recently and was bought new and not used
WRONG ANSWER

B)  It can be realized in cash or sold or consumed in the business within one year
RIGHT ANSWER!!!

C)  It is a piece of new machinery that is expected to last for at least ten years
WRONG ANSWER

D)  All of the given options
WRONG ANSWER


5) 

General office expenses are charged to which of the following head:

A)  Administrative expenses
RIGHT ANSWER!!!

B)  Marketing expenses
WRONG ANSWER

C)  Selling expenses
WRONG ANSWER

D)  Financial expenses
WRONG ANSWER


6) 

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

A)  Salaries of selling staff
RIGHT ANSWER!!!

B)  Transportation inward costs
WRONG ANSWER

C)  Import duties
WRONG ANSWER

D)  Purchase price
WRONG ANSWER


7) 

Consider the following data and identify the amount which will be deducted from Sundry Debtors in Balance Sheet

Particulars
        $
Bad debts (from trial balance)
1,600
Provision for doubtful debts (old)
2,000
Current year’s provision (new)
800

A)  $400WRONG ANSWER

B)  $800RIGHT ANSWER!!!

C)  $2,000WRONG ANSWER

D)  $2,400WRONG ANSWER


8) 

A Financial statement that indicates the success or failure of a business, over a period of time is called:

A)  A cash flow statement
WRONG ANSWER

B)  A retained earnings statement
WRONG ANSWER

C)  An income statement
RIGHT ANSWER!!!

D)  A balance sheet
WRONG ANSWER


9) 

Which of the following is NOT correct about income tax?

A)  Different companies pay tax on different rates
WRONG ANSWER

B)  It is treated as an expense and debited in Profit & Loss account
RIGHT ANSWER!!!

C)  When financial statements are prepared, an estimate of expected tax liability is made
WRONG ANSWER

D)  It is treated as an expense and credited in Profit & Loss account
WRONG ANSWER


10) 

(Amount of new provision + Amount of bad debts) < Amount of old provision then amount will be shown on:


A)  Debit side of P & L account
WRONG ANSWER

B)  Credit side of P & L account
RIGHT ANSWER!!!

C)  Asset side of Balance Sheet
WRONG ANSWER

D)  Liability side of Balance Sheet
WRONG ANSWER




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