Q1. Rent account is a
a. Nominal account
b. Personal account
c. Real account
d. Liability account
Answer
a. Nominal account
Q2. —– is the profit before interest and tax:
a. Net profit ratio.
b. Gross profit ratio.
c. Operating profit ratio.
d. Earnings per share.
Answer
c. Operating profit ratio.
Q3. What is the rule of Personal accounts
a. Debit the receiver & credit the giver
b. Debit what comes in & credit what goes out
c. Debit all expenses & losses & credit all incomes & gains
d. None of these
Answer
a. Debit the receiver & credit the giver
Q4. In 2015, a company purchased land for Rs. 3,75,000. The company also sold a building for Rs. 9,50,000. The company’s cash flow from investing activity was —–.
a. Rs. 46,50,000
b. Rs. 28,50,000
c. Rs. 28,00,000
d. Rs. 35,50,000
Answer
c. Rs. 28,00,000
Q5. Business is said to be in a profit when
a. Expenditure exceeds income
b. Income exceeds expenditure
c. Income exceeds liability
d. Assets exceed expenditure
Answer
b. Income exceeds expenditure
Q6. Which of the following cash flow activities represent a non-cash investing transaction?
a. Purchase of goods
b. Issue of shares
c. Sale of equipment for cash
d. Exchange of plant assets
Answer
d. Exchange of plant assets
Q7. Operating profit ratio is calculated as:
a. Profit before interest and tax/sales *100
b. Profit before interest and tax/Purchases* 100
c. Profit after interest and tax/Sales*100.
d. Profit after interest and tax/purchases*100.
Answer
a. Profit before interest and tax/sales *100
Q8. What are the financial statements generally prepared by any business enterprise?
a. Income statement
b. Balance sheet
c. Cash flow statement
d. All of the above
Answer
d. All of the above
Q9. According to money measurement concept which of the following will be recorded in the books of account?
a. Health of Chairman of company
b. Quality control in business
c. Value of a building
d. All of the above
Answer
c. Value of a building
Q10. What are the types of accounts
a. Personal account
b. Real account
c. Nominal account
d. All of these
Answer
d. All of these
Q11. All the transactions measurable in the terms of money are recorded in accounts is according to
A. Business entity concept
B. Going concern concept
C. Money measurement concept
D. Accounting period concept
Answer
C. Money measurement concept
Q12. Dividing the expenditure into capital and revenue is according to
A. business entity concept
B. going concern concept
C. money measurement concept
D. accounting period concept
Answer
D. accounting period concept
Q13. While putting the value or price of an entity in financial records the lowest price is recorded not the current price or current market value. This is known as
A. Business Entity Concept
B. Conservatism
C. Cost Concept
D. Money Measurement Concept
Answer
B. Conservatism
Q14. Co-operative societies is an example of
A. personal account
B. real account
C. nominal account
D. representative personal account
Answer
A. personal account
Q15. Outstanding salary account is a
A. natural personal account
B. artificial personal account
C. representative personal account
D. real account
Answer
C. representative personal account
Q16. Interest earned is a
A. personal account
B. real account
C. nominal account
D. representative personal account
Answer
C. nominal account
Q17. Commission paid is a
A. personal account
B. real account
C. nominal account
D. representative personal account
Answer
C. nominal account
Q18. Trading account is a
A. personal account
B. real account
C. nominal account
D. representative personal account
Answer
C. nominal account
Q19. Profit and loss account is a
A. personal account
B. real account
C. nominal account
D. representative personal account
Answer
C. nominal account
Q20. All revenue incomes are credited to
A. manufacturing account
B. trading account
C. profit and loss account
D. balance sheet
Answer
C. profit and loss account
Q21. In profit and loss account, if credit is more than the debit, the difference is
A. net profit
B. net loss
C. gross profit
D. gross loss
Answer
A. net profit
Q22. Which accounting concept satisfy the valuation criteria
A. Going concern, Realisation, Cost
B. Going concern, Cost, Dual aspect
C. Cost, Dual aspect, Conservatism
D. Realisation, Conservatism, Going concern.
Answer
A. Going concern, Realisation, Cost
Q23. The process of recording financial data upto trial balance is
A. Book keeping
B. Classifying
C. Summarising
D. Analyzing
Answer
A. Book keeping
Q24. In income measurement & recognisation of assets & liabilities which of the following concepts goes together?
A. Periodicity, Accural, Matching
B. Cost, Accural, matching
C. Going concern, cost, Realization
D. Going concern, Periodicity, Reliability
Answer
A. Periodicity, Accural, Matching
Q25. Interpretation means
A. Explanation of meaning and significance of the data in Financial Statements.
B. Concerned with preparation and presentation of classified data
C. Systematic analysis of recorded data
D. Methodical classification of data given in Financial Statements.
Answer
A. Explanation of meaning and significance of the data in Financial Statements.
Q26. Which of the following is wrong?
A. All real and personal accounts are transferred to balance sheet
B. Nominal accounts are transferred to P & L account
C. Each account is opened separately in ledger
D. Rent is a personal account, outstanding rent is nominal account
Answer
D. Rent is a personal account, outstanding rent is nominal account
Q27. —– is root cause for financial accounting
A. Stewardship accounting
B. Social accounting
C. Management accounting
D. Human resource accounting
Answer
A. Stewardship accounting
Q28. If nothing is given in the financial statements about the three accounting assumptions then it is to be treated as it
A. Is assumed that it is not followed
B. Is assumed to be followed
C. Is assumed to be followed to some extent
D. None of the above
Answer
B. Is assumed to be followed
Q29. The proprietor of the business is treated as creditor for the capital introduced by him due to —– concept.
A. Money measurement
B. Cost
C. Entity
D. Dual aspect
Answer
C. Entity
Q30. Fixed assets are held by business for —–
A. Converting into cash
B. Generating revenue
C. Resale
D. None of the above
Answer
B. Generating revenue
Q31. Which accounting concept specifies the practice of crediting closing stock to the trading account?
A. Cost
B. Realisation
C. Going concern
D. Matching
Answer
D. Matching
Q32. Amount spent to increasing the earning capacity is a —– expenditure
A. Capital
B. Revenue
C. Deferred revenue
D. Capital Loss
Answer
A. Capital
Q33. Human resources will not appear in the balance sheet according to —– concept.
A. Accrual
B. Going concern
C. Money measurement concept
D. None
Answer
C. Money measurement concept
Q34. Provision for discount on debtors is calculated on the amount of debtors.
A. Before deducting provision for doubtful debts.
B. After deducting provision for doubtful debts.
C. Before deducting actual debts and provision for doubtful debts.
D. After adding actual bad and doubtful debts.
Answer
B. After deducting provision for doubtful debts.
Q35. Which of the following is not a Real Account?
A. Cash A/c
B. Investments A/c
C. Outstanding rent A/c
D. Purchases A/c
Answer
C. Outstanding rent A/c
Q36. Value of goods withdrawn by the proprietor for his personal use should be credited to —–
A. Capital A/c
B. Sales A/c
C. Drawings A/c
D. Purchases A/c
Answer
D. Purchases A/c
Q37. Which of the following is incorrect?
A. Good will – Intangible asset
B. Sundry debtors – Current asset
C. Loose tools -Tangible fixed asset
D. Outstanding expenses – Current asset
Answer
D. Outstanding expenses – Current asset
Q38. M/s Stationery Mart will debit the purchase of stationery to —–
A. Purchases A/c
B. General Expenses A/c
C. Stationery A/c
D. None
Answer
A. Purchases A/c
Q39. Small items like, pencils, pens, files, etc. are written off within a year according to —– concept.
A. Materiality
B. Consistency
C. Conservatism
D. Realisation
Answer
A. Materiality
Q40. Business enterprise is separate from its owner according to —– concept.
A. Money measurement concept
B. Matching concept
C. Entity concept
D. Dual aspect concept
Answer
C. Entity concept
Essentials of Financial Accounting BBA MCQs
- Essentials of Financial Accounting BBA MCQs Set 1
- Essentials of Financial Accounting BBA MCQs Set 2
- Essentials of Financial Accounting BBA MCQs Set 4
- Essentials of Financial Accounting BBA MCQs Set 5
- Essentials of Financial Accounting BBA MCQs Set 6
- Essentials of Financial Accounting BBA MCQs Set 7
- Essentials of Financial Accounting BBA MCQs Set 8
