https://pakmcqs.com/category/accounting- C.

Error of omission
mcqs/page/2 D. Error of duplication

The concession received on the price of defective If a transaction is completely omitted from the books
goods is called: of accounts, will it affect the agreement of a trial
0 balance?
0
A. Discount
B. Cash discount A. Yes
C. Allowance  B. No
D. Trading discount C. Transactions can’t be omitted
D. none of these
For the business, capital is ____________?
Debit balance = Credit balance in a trial balance
A. Expense indicates that:
B. Liability 0
C. Assets
D. All of the A. No error in recording transactions
B. No error in posting entries to ledger accounts
The assets which have some market value are called C. Account balances are correct
____________? D. Mathematically Capital+Liabilities=Assets
0
Which of the following will affect the agreement of a
A. Fixed asset trial balance?
B. Quick asset 0
C. Fictitious assets
D. Real assets A. Complete omission of a transaction
B. Partial omission of a transaction 
Income earned but not received is called C. Error of principle
____________? D. Compensating errors
3
If debit balances = credit balances, trial balance only
A. Fictitious assets shows or check the ____________ and it does not
B. Quick asset indicate that no errors were made during recording
C. Real asset and posting.
D. Outstanding asset 0

Debts which are payable in the course of a month are A. Arithmetic accuracy 
called _____________? B. Errors of commission
0 C. Omissions of economic events
D. Understatements of balances
A. External liabilities
B. Fixed liabilities Another name of journal is_____________?
C. Current liabilities 0
D. Liquid Liabilities
A. Specialized journal
Goods sent on approval basis’ have been recorded as B. Day book
‘Credit sales’. This is an example of____________? C. Cash book
1 D. Record book

A. Error of principle Sales and purchase journal don’t

B. Error of commission record__________?
0
A. Credit sales A. Government agencies
B. Credit purchases B. investors
C. Credit sales and purchases C. Creditors
D. Cash sales and purchases D. Managers

Cash received from debtor is recorded in which of For which step of accounting process the
the following SPECIALIZED journals? accountants of business entity prepare financial
0 statements?
0
A. Purchase journal
B. Sales journal A. Identification of economic event
C. Cash receipts B. Communication of financial information 
C. Recording financial information
D. Cash payments journal
D. Making decisions about business

Debit note is the basis for recording a An asset must be _______ by the business to be shown
transaction in which of the following journals?
4 as an asset in its “balance sheet”

0
A. General journal
B. Cash journal
C. Purchase journal A. Possessed
D. Purchase return journal B. Owned
C. Controlled 
D. Used
Credit note is the basis for recording a
transaction in which of the following
What is equity?
SPECIALIZED journals?
1 0

A. Purchase journal
B. Sales return journal A. Cash from the business
C. General journal B. liability of a business
D. Cash receipt journal C. Owner’s claim on total assets 
D. Owner’s claim on total liabilities

Credit memo or credit note No. is entered in

Transferring entries from journal to ledger account is
which of the following journal?
0 commonly known as____________?

0
A. General journal
B. Cash journal
C. Purchase journal A. Recording
D. Sales return day book B. Transferring
C. Posting
D. Entry making
Identify the correct sequence of accounting
process
0 If credit side of a bank account is greater than the
debit side, it indicates which of the following?
A. Communicating→Recording→Identifying
B. Recording→Communicating→Identifying 0
C. Identifying→communicating→recording
D. Identifying→recording→communicating A. Bank overdraft 
B. Cash at bank
Financial accounting provides financial C. Bank balance
information to all of the following external users D. Current Asset
except:
0 The real accounts are accounts of Assets, liabilities and
___________?
0 Total depreciation of an asset cannot exceed its:

A. Expenses 0
B. Revenues
C. Capital A. Scrap value
D. Drawing B. Residual value
C. Market value
___________ helps business to classify transactions D. Depreciable value
according to their nature?
Which of the following statements is/are true ?
0
0
A. General journal
B. Real accounts A. A sale of an asset is recorded in the Sales Book
C. Ledger accounts B. Total of Return Outward Book is debited to Return
D. Cash accounts Outward Account
C. The balance of Petty Cash Book is a liability
D. Cash Book is a subsidiary book as well as a
Which of following best describes the increase in
ledger
equity expands___________?
Which of the following is true regarding closing
0
entries?
A. Business operations 
0
B. cash outflows
C. Inflows of cash
D. Appropriation expenses A. They must be followed by reversing entries
B. They transfer the balances in all of the Nominal
Accounts to the Trading and Profit and Loss Account
An increase in provision for bad debt
C. They must be made after the reversing entries but
will____________? before the adjusting entries
D. They must be made after the adjusting entries but
0 before the reversing entries

A. Decrease net income  Read More About this Mcq

B. Decrease liabilities
C. Increase net income The concept of conservatism will have the effect
D. Increase liabilities
of______________?
The standard format of journal does not include which
of the following? A. Overstatement of Assets
B. Understatement of Assets
0 C. Overstatement of Liabilities
D. Understatement of Liabilities
A. Assets column
B. Date column The concept of conservatism will have the
C. Description column effect of understatement of assets since the
D. Amount column
financial statements are usually drawn up on
rather a conservative basis. Window-dressing
Discount for quick repayment of debt is normally
i.e., showing a position better than what it is, is
referred as____________? not permitted.
0
Which of the following errors is an error of omission?
A. Trade discount
0
B. Prompt payment discount
C. Cash discount
D. Bulk discount
A. Sale of ` 100 was recorded in the Purchases Journal
B. Wages paid to Mohan have been debited to his
account
C. The total of the sales journal has not been posted
to the Sales Account
D. Repairs to buildings have been debited to buildings
account
Balance as per cash book(adjusted.=$1000,
Unpresented checks=$2000, Uncredited checks=$500,
Deposit in transit=$500. Compute the balance as per
bank statement.
0

Bank charges amounting to $5000 was not entered in A. $2000 

the cash book. Identify the correct adjustment in cash B. Zero
book? C. $3000
D. $2500
0
$5000 deposited in bank account was entered twice in
A. Bank charges will be debited in cash book the cash book. Identify the correct adjustment in cash
B. Bank charges will be added to cash book balance book.
C. Bank charges will be credited in cash book
D. Bank charges need no adjustment in cash boo 0

In the Bank reconciliation statement “Deposit in A. $5000 will be credited 

transit” is usually: B. $5000 will be debited
C. $10,000 will be credited
0 D. $10,000 will be debited

A. Subtracted from bank balance Postdated checks are considered as__________?

B. Added to bank balance 
C. Added to Cash book balance 0
D. Subtracted from cash book balance
A. Cash
Unpresented checks also referred as____________? B. Bank balance
C. Accounts receivable
0 D. Cash reserve

A. Uncollected checks Cash book with cash and discount column is mostly
B. Uncredited checks referred as________?
C. Outstanding checks
D. Bounced checks 0

Uncollected checks also referred as______________? A. Simple cash book

B. Two column cash book
0 C. Three column cash book
D. Petty cash book
A. Unpresented checks
B. Uncredited checks Costs that change in response to alternative courses of
C. Outstanding checks
action are called___________?
D. Bounced checks
0
_________ Checks that are presented to bank but not
yet credited by the bank. A. Relevant costs
B. Differential costs
0 C. Target costs
D. Sunk costs
A. Unpresented checks
B. Uncredited checks  Budgeted sales for the next year is 5,00,000 units.
C. Outstanding checks
Desired ending finished goods inventory is 1,50,000
D. Bounced checks
units and equivalent units in ending W-I-P inventory is
60,000 units. The opening finished goods inventory for
the next year is 80,000 units, with 50,000 equivalent
units in beginning W-I-P inventory How many
equivalent units should be produced?
2 Purchase of raw material during the month 1,28,450
A. 5,80,000
B. 5,50,000
C. 5,00,000
D. 5,75,000
Using production related budgets, units to produce
equals budgeted sales + desired ending finished goods
inventory + desired equivalent units in ending W-I-P
inventory – beginning finished goods inventory –
equivalent units in beginning W-I-P inventory. Therefore,
in this case, units to produce is equal to 5,00,000 +
1,50,000 + 60,000 – 80,000 – 50,000 = 5,80,000.
If the asset turnover and profit margin of a company
are 1.85 and 0.35 respectively, the return on
investment is.
0
A. 0.65
B. 0.35
C. 1.50
D. 5.29
Consider the following data pertaining to the
production of a company for a particular month :
Opening stock of raw material 11,570
Closing stock of raw material 10,380
Total manufacturing cost charged to product
3,39,165
Factory overheads are applied at the rate of 45% of
direct labour cost.
The amount of factory overheads applied to
production is
A. 65,025
B. 94,287
C. 95,020
D. 1,52,624
[Hint : Raw material used= Op. Stock + Purchases – Cl.
Stock= ` 11,570 + ` 1,28,450 – ` 10,380 = ` 1,29,640
Manufacturing cost = Raw material used + Direct labour
+ Factory overhead` 3,39,165 = ` 1,29,640 + Direct
labour + 45% of Direct labour 1.45 Direct labour = `
2,09,525 Direct labour = ` 1,44,500 The amount of
factory overhead= 45% of ` 1,44,500 = ` 65,025.]
___________ is concerned with the acquisition,
financing, and management of assets with some
overall goal in mind.
0

[Hint : Return on investment = Asset turnover x A. Financial management

Profit margin = 1.85 x 0.35 = 0.65] B. Profit maximization
C. Agency theory
D. Social responsibility
A company is currently operating at 80% capacity level.
The production under normal capacity level is 1,50,000
units. The variable cost per unit is ` 14 and the total
fixed costs are ` 8,00,000. If the company wants to earn
a profit of ` 4,00,000, then the price of the product per
unit should be

A. 37.50
B. 38.25
C. 24.00
D. 35.00

[Hint : Total fixed cost - ` 8,00,000 Expected profit - `

4,00,000 Variable cost at 80% level (80% x 1,50,000
units x ` 14) - ` 16,80,000 Total price - ` 28,80,000 Per
unit price at 80% level = (` 28,80,000 / 1,20,000 units) =
` 24.00.]