Home » MCQs » Financial Accounting Multiple Choice Questions#30

1) 

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!!!


2) 

A decrease in value of a fixed asset due to age, wear and tear is known as:

A)  Depreciation
RIGHT ANSWER!!!

B)  Accumulated Depreciation
WRONG ANSWER

C)  Appreciation WRONG ANSWER

D)  Written Down Value
WRONG ANSWER


3) 

If Bad Debts written off are given in adjustment, then which of the following entry for bad debts written off is CORRECT?


A)  Bad debts a/c (Dr) and Trading a/c (Cr)
WRONG ANSWER

B)  Provision for Bad and Doubtful debts a/c (Dr) and Bad debts a/c(Cr)
WRONG ANSWER

C)  Bad debts a/c (Dr) and debtors a/c (Cr)
RIGHT ANSWER!!!

D)  Trading a/c (Dr) and Bad debts a/c (Cr)
WRONG ANSWER


4) 

In balance sheet fixed assets are shown at:

A)  Cost price
WRONG ANSWER

B)  Market value
WRONG ANSWER

C)  Fair value
WRONG ANSWER

D)  Written down value (WDV)
RIGHT ANSWER!!!


5) 

In cost of goods sold statement, the ‘cost of material consumed’ is equal to:

A)  Opening raw material inventory + Purchases – Ending raw material inventory
RIGHT ANSWER!!!

B)  Opening raw material inventory - Purchases + Ending raw material inventory
WRONG ANSWER

C)  Ending raw material inventory + Opening raw material inventory - Purchases
WRONG ANSWER

D)  Ending raw material inventory + Opening raw material inventory + Purchases
WRONG ANSWER


6) 

Following are the inventories of Manufacturing Concern EXCEPT


A)  Raw material
WRONG ANSWER

B)  Work in process
WRONG ANSWER

C)  Finished goods
WRONG ANSWER

D)  Merchandise inventory
RIGHT ANSWER!!!


7) 

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)  Cash account
WRONG ANSWER

B)  Furniture account
WRONG ANSWER

C)  Vehicle account
WRONG ANSWER

D)  All of the given options
RIGHT ANSWER!!!


8) 

The return of goods by a customer should be debited to:

A)  Customer’s account
WRONG ANSWER

B)  Sales return account
RIGHT ANSWER!!!

C)  Goods account
WRONG ANSWER

D)  Accounts receivable
WRONG ANSWER


9) 

Which of the following account will be credited in the books of ABC Co. Ltd., if furniture is purchased on cash?

A)  Furniture account
WRONG ANSWER

B)  Cash account
RIGHT ANSWER!!!

C)  Business account
WRONG ANSWER

D)  Bank account
WRONG ANSWER


10) 

Which of the following account will be credited, If Mr. “A” started business with cash
Rs. 2, 00,000?

A)  Capital account
RIGHT ANSWER!!!

B)  Cash account
WRONG ANSWER

C)  Mr. A’s account
WRONG ANSWER

D)  Business account
WRONG ANSWER




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