300+ TOP Accountancy MCQs and Answers Quiz Exam

Accountancy Multiple Choice Questions

1. The Accounting Equation is based on _____ .

a. money measurement concept

b. going concern concept

c. dual aspect concept

d. All of the above

2. Provision for bad debts is made on the basis of the principle of _____ .

a. revenue matching

b. conservatism

c. full disclosure

d. both a & b

3. Accounting principles are generally based on _____ .

a. convenience in recording

b. simplicity

c. subjectivity

d. practicability

4. According to realization concept, revenue is recognized when _____

a. the products are manufactured

b. the sale is made

c. the planning take place

d. the cash is collected

5. Which principle is often described as “anticipate no profits and provide for all possible losses”?

a. Consistency principle

b. Conservatism principle

c. Accrual principle

d. Matching principle

6. Cost of goods purchased for resale is an example of _____ .

a. capital receipt

b. capital expenditure

c. revenue expenditure

d. deferred revenue expenditure

7. Capital income is synonymous to the term _____.

a. revenue expenditure

b. revenue gain

c. capital loss

d. capital gain

8. Purchase of patent rights is a _____ .

a. capital expenditure

b. business expenditure

c. revenue expenditure

d. deferred expenditure

9. Which of the following is not an Adjustment under Current Cost Accounting Method?

a. Purchasing Power Gain

b. Gearing Adjustment

c. Depreciation Adjustment

d. Cost of sales Adjustment

10. The following is not considered in Monetary Working Capital Adjustment.

a. Creditors

b. Debtors

c. Cash

d. None of the above

11. Events are considered only _____

a. on the last day of the accounting year

b. on the first day of the accounting year

c. during the accounting year

d. Both A and B

12. _____ is not included in the scope of environment Accounting.

a. Natural Resources

b. Social Wellbeing

c. Inflation

d. National Income

13. At the time of admission of a new partner, general reserve is transferred to _____.

a. profit and loss adjustment account

b. partner’s capital account

c. partners loan account

d. None of the above

14. In computer accounting, the term digit refers to a _____ .

a. Specific character

b. Alphabetic character

c. Numeric character

d. All of the above

15. A Command is a single word that would activate the entire _____ .

a. all the programs

b. software and all the programs

c. software

d. None of the above

16. The service cost is defined as the cost of _____ .

a. providing product

b. providing a service

c. producing goods

d. None of the above

17. Which of the following costs are generally incurred in a hotel?

a. provisions of foods

b. internet and Wi. fi services

c. wages and salaries

d. All of the above

18. In hospital costing, direct cost includes the expenditure incurred on _____ .

a. the medical service department

b. the outpatient department

c. the ward

d. All of the above

19. In case of redemption of debentures by sinking fund method, every year a fixed amount is taken from _____ .

a. share premium account

b. profit and loss appropriation account

c. capital reserve account

d. profit and loss account

20. Which of the following capital budgeting techniques shows the net present value zero?

a. Net present value method

b. Internal Rate of Return Method

c. Accounting rate of return method

d. Pay. back period method

21. Breakup value of share can be determined by _____ .

a. Purchase of super profits method

b. Stock exchange quotation

c. Net assets method

d. Yield method

22. For determining the value of shares on the basis of price earnings ratio, information is required regarding _____ .

a. Earnings per share

b. Capital employed in business

c. Abnormal rate of return

d. Normal rate of return

23. Operating leverage means ………………… .

a. Operating profit / profit before Tax

b. Operating profit / profit after Tax

c. Contribution / Operating profit

d. None of the above

24. Responsibility accounting is a part of _____ .

a. Corporate Reporting System

b. External Reporting System

c. Internal Reporting System

d. Global Responsibility System

25. Trade liabilities incurred on account of ……………… .

a. Purchase of outstanding salaries

b. Purchase of debentures

c. Purchase of goods

d. Purchase of assets

26. Division under transfer pricing system is treated as ……………… .

a. Profit centre

b. System centre

c. Investment centre

d. Cost centre

27. Popular method of transfer pricing is the _____ .

a. Opportunity cost pricing

b. Negotiated pricing

c. Market based pricing

d. Cost based pricing

28. Activity based costing is a logical distribution of _____ .

a. Standard cost

b. Direct cost

c. Overheads

d. Total cost

29. A situation where the holding and subsidiary companies own shares of each other, it is called _____ .

a. Cross holdings

b. Useless holding

c. Special holdings

d. Chain holdings

30. Cost of control account is credited with _____ .

a. Capital profits

b. Revenue profits

c. Both a. and (B)

d. None of the above

31. Activity Based Costing focuses on _____ .

a. Efficient management

b. Effective cost control

c. Performance management

d. Cost reduction

32. The basic function of Management Accounting is to_____.

a. Calculation of financial data

b. Interpret the financial data

c. Record all business transactions

d. Assist the management in performing its function effectively

33. Life cycle costing is useful in _____.

a. Standard Costing decisions

b. Unit costing decisions

c. Marginal costing decisions

d. Capital budgeting decisions

34. Tax paid is_____.

a. No flow of funds

b. Income of tax payer

c. Source of funds

d. Application of funds

35. Which of the following is not a type of audit?

a. Tax Audit

b. Internal Audit

c. External Audit

d. Personal Audit

36. Sale of long. term investments indicates_____.

a. Application of funds

b. Source of funds

c. Change in current liabilities

d. Change in current assets

37. Economics Value Added (EVA) is an Estimate of a firm’s _____.

a. Economic profit

b. Gross profit

c. Net profit

d. None of the above

38. Transaction in the form of capital flows does not include_____.

a. Global Depository Receipts (GDR)

b. Capital Goods

c. Foreign direct investment(FDI)

d. None of the above

39. The Foreign exchange rate between the two dealing countries on the transaction date is knows as _____.

a. Spot rate

b. Direct rate

c. Backward rate

d. Forward rate

40. Corporate governance essentially involves balancing the interests of a company with the _____.

a. Community

b. Government

c. Many stakeholders

d. Shareholders

41. Claim for loss of stock is _____.

a. stock activity

b. operating activity

c. financing activity

d. investing activity

42. Zero base budgeting is a _____.

a. Accounting oriented approach

b. Management oriented approach

c. Decision oriented approach

d. None of the above

43. Which of the following is the technique of costing?

a. Marginal costing

b. Contract costing

c. Process costing

d. None of the above

44. Standard cost is a _____.

a. Fixed cost

b. Actual cost

c. Predetermined cost

d. Historical cost

Accountancy Objective Questions and Answers Pdf Download