Important Accounting MCQs
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1. The accounting process involves in recording.?
A. Non quantifiable economic event
B. Non Quantifiable
C. Quantifiable economic event√
D. None of them
2. Which of the following is the external user of financial statements.?
A. Creditor of the business√
B. Manager of the business
C. CEO of the business
D. Controller of the business
3. The recording process of transactions in different journals is called.?
A. Adjusting
B. Entry making
C. Journalizing√
D. None of above
4. Another name of journal is.?
A. Specialized journal
B. Day book√
C. Cash book
D. None of above
5. Transactions that a BUSINESS doesn't record in any specialized journal are recorded in which of the following journals or day books.?
A. Cash payments journal
B. Cash receipts journal
C. Purchases return journal
D. General journal√
6. Which of the following is known as evidence that a transaction took place.?
A. Source document√
B. Cash receipts journal
C. Cash book
D. None of these
7. Which of the following specialized journals Credit note is the basis for recording a transaction in.?
A. General journal
B. Purchase journal
C. Sales return journal√
D. None of above
8. Discount allowed is a kind of deduction from.?
A. Account payable
B. Cash account
C. Account receivable√
D. Discount account
9. Discount allowed is.?
A. Income of business
B. Expense of business√
C. Loss of business
D. Abnormal loss of business
10. The first step in accounting process is.?
A. Recording the transaction
B. Identifying the transaction√
C. Posting the transaction
D. Preparing the source documents
11. Auditing is what?
A. Reporting the financial information
B. Preparation financial statements
C. Examination of financial√ statements
D. Maintaining the ledger records
12. Deferred Taxation is.?
A. Fixed asset
B. Part of Owners Equity√
C. Fixed liabilities
D. None of above
13. Liability is arisen from which of the following events.?
A. Present event
B. Future event
C. Past event√
D. None of them
14. Cash budget excludes the following.?
A. Cash items
B. Non-Cash items√
C. Purchase on Credit items
D. None of above
15. Partners in Pakistan can today be fixed at the following numbers.?
A. 15
B. 20√
C. 50
D. None of above
16. Keeping the log of financial information in books of original entries is called.?
A. Summarizing
B. Grouping
C. Recording√
D. Processing
17. Liabilities are which of the following.?
A. Resources
B. Obligations√
C. Future benefits
D. Expenses
18. Depreciation in spirit is similar to.?
A. Amortization √
B. Depletion
C. Depression
D. None of above
19. Identify the nominal account.?
A. Machinery account
B. Building account
C. Creditors account
D. Rent expenses account√
20. Sales budget must be prepared.?
A. Based on Sales forecasts of market√
B. Independently
C. Depending on production capacity
D. None of above
21. Sales and purchase journal don't record.?
A. Credit sales
B. Credit purchases
C. Cash sales and purchases
D. Credit sales and purchases√
22. Credit memo or credit note No. is entered in which of the following journal.?
A. Sales return day book
B. Cash journal
C. General journal√
D. None of above
23. The General journal is a book of _______ entries.?
A. Generic
B. Secondary
C. Original√
D. First
24. Which one is the evidence that a transaction took place.?
A. Bonds
B. Ledger
C. Source documents√
D. Journals
25. In which of the following orders data is entered in journal.?
A. Alphabetical order
B. Chronological order√
C. Bullets order
D. Numeric order
26. Internal Control is totally synonymous with.?
A. Internal check
B. Internal audit
C. A & B
D. None of above√
27. A partnership, in today’s Pakistan, under the current law can have the following number of partners.?
A. 10
B. 20√
C. 50
D. 100
28. Under the diminishing balance method, depreciation amount is.?
A. Expenditure√
B. Receipt
C. Payment
D. None of these
29. All of the following are forms of organizations except.?
A. Retailer√
B. Proprietorship
C. Partnership
D. Corporation
30. Investment Corporation of Pakistan follows.?
A. Open funds
B. Closed-end mutual funds
C. Open-end mutual funds
D. None of these√
31. Which of the following accounts can be classified as a real account.?
A. Rent expenses account
B. Cash account√
C. Rent income account
D. Insurance expenses account
32. Users of accounting information include.?
A. The tax authorities
B. Investors
C. Creditors
D. All of these√
33. Journals are also referred as.?
A. Book of entries
B. T account
C. Book of original entries√
D. Books of economic event
34. Which of these types of expenditure would not be treated as a Capital Expenditure.?
A. Acquisition of an Asset
B. Maintenance of the Asset√
C. Extension of an Asset
D. Improvement of the existing Asset
35. Depreciation is a process of
A. Allocation√
B. Valuation
C. Valuation and allocation
D. Appropriation
36. Provision is created for.?
A. Unknown Liabilities
B. Creation of Secret Reserves
C. Known Liabilities√
D. All the Three
37. The basic of accounting equation.?
A. Capital + assets = liabilities
B. Assets + liabilities = Capital
C. Capital + Liabilities = Assets√
D. None of above
38. Double entry book-keeping was fathered by.?
A. F.W. Taylor
B. Luca Pacioli√
D. Henry Fayal
D. None of above
39. Process Costing is relevant to.?
A. Job Order cost oriented Projects
B. Phonic Industry
C. Cement industry√
D. None of the above
40. Cash purchases is recorded in which of the following specialized journals.?
A. Purchase journal
B. Cash payments journal√
C. Sales journal
D. Purchases return journal
41. An endowment insurance policy can be taken in respect of.?
A. Life insurance√
B. Fire insurance
C. Accident insurance
D. None of these
42. Discount for quick repayment of debt is normally referred as
A. Cash discount√
B. Trade discount
C. Bulk discount
D. Prompt payment discount
43. Which of the following is the internal user of financial statements?
A. Creditor of the business
B. Government agency
C. Shareholder of the business
D. Manager of the business√
44. Every business transaction affects at least ________ accounts.?
A. One
B. Two√
C. Three
D. Infinite
45. The other name of journal is
A. Day book√
B. Cash book
C. Ledger
D. T account
46. Verification includes.?
A. Checking Vouchers
B. Examining audit report
C. A & B
D. None of the above√
47. Process Cost is very much applicable in.?
A. Pharmaceutical Industry
B. Construction Industry√
C. Air line company
D. None of these
48. M & A stands for.?
A. Mergers & Analysis
B. Mergers & Acquisitions√
C. Mergers & Allocation
D. None of these
49. Identify the asset from the following
A. Notes payable
B. Creditors
C. Cash and cash equivalent√
D. Bank loan
50. Depreciation is based on.?
A. Declared life of asset by supplier
B. Normal life of asset
C. Economic life of asset√
D. None of these
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51. The Funds Flow Statement and sources and application statement are?
A. Synonymous√
B. Duplication
C. Antagonistic
D. None of these
52. The auditor is liable for his annual audit of accounts o?
A. Owners√
B. Creditors
C. Bankers
D. None of above
53. Amount, cash or other assets removed from business by owner is?
A. Capital
B. Assets
C. Drawings√
D. None of these
54. Banks, for the preparation of financial statements, are governed under?
A. State Bank of Pakistan Act
B. Banking Companies Ordinance, 1962√
C. A & B
D. None of these
55.A fixed cost?
A. Will not change in total because it is not related to changes in production Is constant per unit for each unit of change in production√
B. May change in total when such change is not related to changes in production
C. May change in total, depending on production with the relevant range
D. None of these
56. Which of the following specialized journals will record "goods returned by the business"?
A. Sales journal√
B. Sales return journal
C. Purchase journal
D. Purchases return journal
57.A journal entry in which two or more account is debited or credited is referred as
A. Additional entry
B. Journal entry
C. Compound entry√
D. Multi entry
58.Which of the following will be debited if a business purchases goods on credit?
A. Cash
B. Purchases√
C. Debtor
D. Creditor
59. Is the common base for preparing a trial balance?
A. Ledger Accounts√
B. General Journal
C. Specialized Journals
D. None of Above
60. Trial balance is prepared to check accuracy of?
A. Balance sheet balances
B. Income statement balances
C. Leger accounts balances√
D. None of above
61. Expenses such as rent and depreciation of a building are shared by several departments these are?
A. Direct expenses
B. Joint expenses
C. Indirect expenses√
D. All of the above
62. For preparing balance sheets prepaid expenses are shown as part of?
A. Liability
B. Equities
C. Assets√
D. None of these
63. Economic resources of a business that are expected to be of benefit in the future are referred to as?
A. Liabilities
B. Owner’s equity
C. Withdrawals√
D. Assets
64. The payment of rent each month for office space would?
A. Decrease total assets√
B. Increase liabilities
C. Increase owner’s equity
D. None of these
65. Net income plus operating expenses is equal to?
A. Net sales
B. Cost of goods available for sale
C. Cost of goods sold
D. Gross profit√
66. A quantitative expression of management objectives is an?
A. Organizational chart
B. Management chart
C. Budget√
D. Procedural chart
67. The time lag between indenting and receiving material is called?
A. Idle time
B. Stock out time
C. Lead time√
D. None of these
68. Productivity means?
A. All units produced
B. Good units produced
C. The ability to produce√
D. None of these
69. Short-term loan can be described as?
A. If the period is three years
B. If the period is less than one year√
C. If the period is over one year
D. None of above
70. Inventory turnover is calculated as under?
A. Gross profit/Closing Inventory
B. Sales/Opening Inventory
C. Cost of Goods sold/Closing Inventory√
D. None of these
71. Goods returned by customer should be debited to which of the following accounts?
A. Return inward account√
B. Sales income account
C. Sales account
D. Expenses account
72. Credit purchase of plant and machinery is recorded in which of the following journals?
A. Purchase return journal
B. Cash journal
C. General journal√
D. Purchase journal
73. The standard format of journal does not include which of the following?
A. Description column
B. Date column
C. Assets column√
D. Amount column
74. In accounting an Economic event is referred to as:
A. Transaction√
B. Exchange of money
C. Cash
D. Bank statement
75. An asset posses which of the following?
A. Expenses for the business
B. All kind of benefits for the business
C. Future economic benefits for the business√
D. Merits and Demerits for the business
76. Net loss occurs when?
A. Expenses are less than Income
B. Expenses are greater than Income√
C. Expenses=Income
D. Liabilities are greater than income
77. BUSINESS paid rent amounting to $100" which of the following specialized journals records this transaction?
A. Cash receipts journal
B. Sales journal
C. Purchase journal
D. Cash payments journal√
78. Which of the following accounts will be debited if the business's owner withdraws cash from business for his personal use?
A. Cash
B. Business
C. Drawings√
D. Stock
79. Which of the following is a type of cash receipt journal + cash payment journal?
A. Cash documents
B. Bank statement
C. Cash book√
D. Statement of cash flow
80. SALE of old furniture" will be recorded in which of the following specialized journals?
A. Purchase journal
B. General journal√
C. Sales journal
D. Cash receipt journal
81. The primary measure of the effectiveness of a manager is?
A. The results obtained√
B. The number of employees supervised
C. The total size of the organization
D. How busy the person is
82. A study to Mintzberg characterized the manager's job as?
A. Ordered
B. Routine
C. Structured
D. Verbal√
83. In comparison to top level managers, a first -line supervisor will spend more time in?
A. Policy making
B. Public relations
C. Long range planning
D. Direction of subordinates√
84. Administrative Management means?
A. Coordinating and communicating in the organization with the responsibility for overall operations of the enterprise
B. A body which is concerned in setting various rules to run a business concern
C. Coordinating the activities of sales and making people√
D. None of these.
85. The difference between administration and management is that?
A. Management is largely determinative while administration is essentially executive
B. Management is performed at higher level of management while administration is performed at lower levels
C. Administration is largely while management is essentially executive√
D. None of these
86. The founder of scientific management movement was?
A. F.W.Taylor√
B. Elton Mayo
C. Henri Fayol
D. M.P.Follett
87. Paternalism refer to?
A. The hiring of many father -son teams of employees
B. A very autocratic ,directive leadership pattern√
C. The governing of a people in a fatherly manner
D. The handicraft method of production
88. Taylor's pig iron experiment were cost-effective.For example?
A. Schmidt produced ten times as much for a 100% incentive
B. Schmidt produced the same amount for a 10% incentive
C. Schmidt produced four times as much for a 60% incentive√
D. Schmidt produced four times as much for no additional pay.
89. Management is defined as?
A. Getting things done so that demand is fulfilled
B. To work for others√
C. Getting things done through other people
D. To know what actually has been produced and which should have been
90. Management is?
A. An art
B. A science
C. Both an art and a science√
D. Neither an art nor a science
91. Which level of management would be most involved in the function of directing and controlling?
A. Top
B. First level√
C. Middle
D. All of these
92. Technical supervisor will be most needed where?
A. Operations are simple and organizational level is high
B. Operations are complex and organizational level is high
C. Operations are complex and organizational level is low√
D. Operations are simple and organizational level is low
93. A person credited with inventing the 1st electronic computer is?
A. John Atanasoff
B. John Mauchly
C. Konre Zuse
D. All of the above√
94. The set of factors which one is the primarily concerned with things that " surround" the job are called?
A. Maintenance factors√
B. Motivational and maintenance factors
C. Motivational factors
D. None of these
95. Job classification is?
A. The duties,functions and responsibilities for a given job
B. Evaluation of job content and required skills,for the purpose of setting up wage brackets
C. A study of personal qualities needed to perform a given job√
D. None of above
96. A cause of job dissatisfaction is?
A. The use of human resource accounting
B. Salary
C. Fringe benefits
D. The conflict between worker expectations and the organizations conditions√
97. The leadership method in which the leader determines all policy himself and assigns specific work tasks to each group member is the?
A. Free-rein
B. None of these
C. Authoritarian√
D. Democratic
98. People -centered leadership is described as?
A. Permissive
B. Follower -oriented
C. Democratic
D. All of these√
99. In comparison to top level managers, a first -line supervisor will spend more time in?
A. Direction of subordinates√
B. Long range planning
C. Policy making
D. Public relations
100. A set of factors which are concerned with the job itself are called ?
A. Maintenance factors
B. Motivational factors√
C. Both of these
C. None of these
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