Accounting MCQs

A. It is already adjusted in the opening stock
B. It is adjusted in the purchase a/c
C. It is adjusted in the cost of sale a/c
D. It is adjusted in the profit &loss a/c

A. If a trial balance tallies, it always means that none of the transactions has been completely omitted
B. A trial balance will not tally if a transaction is omitted
C. A customer to whom goods have been sold on credit cannot avail himself of a cash discount
D. A credit balance in the pass book indicates excess of deposits over withdrawals

A. Add income received in advance to respective income and show it as a liability
B. Deduct income received in advance from respective income and show it as a liability
C. Add income received in advance to respective income and show it as asset
D. Deduct income received in advance from respective income and show it as an asset in the balance sheet

A. The trial balance is prepared after preparing the profit and loss account
B. The trial balance shows only balances of assets and liabilities
C. The trial balance shows only nominal account balances
D. The trial balance has no statutory importance from the point of view of law

A. Previous year‘s profit is overstated and current year‘s profit is also overstated.
B. Previous year‘s profit is understated and current year‘s profit is overstated.
C. Previous year‘s profit is overstated and current year‘s profit is understated.
D. There will be no impact on the profit of either the previous year or the current year.

A. Net profit will decrease by 3,140
B. Gross profit will increase by 3,320
C. Gross profit will decrease by 3,500
D. Gross profit will decrease by 3,320

A. All purchases of goods
B. All credit purchases of goods
C. All credit purchases
D. None of these

A. The trial balance will not agree
B. The balance of creditors is understated
C. The purchases are understated
D. The favorable bank balance as per pass book is less than the bank balance as per cash book

A. Mistake in balancing an account
B. Omitting to record a transaction entirely in the subsidiary books
C. Recording of a wrong entry in the subsidiary books
D. Posting an entry on the correct side but in the wrong account

A. Interest on loans and debentures
B. Annual fire insurance premiums on plant and equipment
C. Sales tax paid in connection with the purchase of office equipment
D. Small expenditures on long- lived assets, such as ` 20 for a paper weight.