📒Accounting MCQs
Accounting MCQs
397 MCQs151
Which of the following statements is correct about Trial Balance?
AThe Trial Balance is prepared after preparing the Profit and Loss Account
BThe Trial Balance shows only balances of Assets and Liabilities
CThe Trial Balance shows only nominal account balances
DThe Trial Balance has no statutory importance from the point of view of law
152
Which of the following errors affects the agreement of a Trial Balance?
Ais the correct answer.
BOmitting to record a transaction entirely in the subsidiary books
CRecording of a wrong entry in the subsidiary books
Ddoes not affect the tallying of a Trial Balance because the aspect of the transaction is posted to the correct side of an account. Thus
153
The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as 1,340.56. The bank recorded the cheque at its correct amount of 3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is
AThe Trial Balance will not agree
BThe balance of creditors is understated
CThe purchases are understated
DThe favourable bank balance as per Pass Book will be less than the bank balance as per Cash Book, since the debit in the bank account is more than the debit in the Cash Book
154
The beginnings inventory of the current year is overstated by 5,000 and closing inventory is overstated by 12,000. These errors will cause the net income for the current year by
A17,000 (overstated.
B12,000 (understated.
COverstatement of closing stock results in overstatement of profit and overstatement of opening stock results in understatement of profit. In the instant case, there will be overstatement of profit by 12,000 – 5,000 = 7,000.
D7,000 (understated.
155
Purchase journal is kept to record_____________?
AAll purchases of goods
BAll credit purchases of goods
CAll credit purchases
DNone of these
156
The balance of which of the following accounts do not disappear, once they are debited/credited to Trading Account?
A, purchases
Band Inward Returns
Care closed once they are absorbed by the Trading Account. Thus
Dis the correct answer.
157
Which of the following is an item of capital expenditure?
AResearch and development costs during the year
BInterest on borrowed fund utilized for acquisition of Office Furniture
CInstallation charges paid in conjunction with the purchase of Office Equipment
158
Any donation received for a specific purpose is a_________?
ALiability
BAssets
CRevenue receipts
DCapital receipts
159
Which of the following is not a deferred revenue expenditure?
AExpenses in connection with issue of equity shares
BPreoperative expenses
CHeavy advertising expenses to introduce a new product
DLegal expenses incurred in defending a suit for breach of contract to supply goods
160
Capital expenditure is an expenditure which
ABenefits the current accounting period
BWill benefit the next accounting period
CResults in the acquisition of a permanent asset
DResults in the acquisition of a current asset A capital expenditure is a non- recurring expenditure whose benefit lasts for more than one accounting period. Example is the acquisition of a fixed or permanent assets.