MCQ on Financial Statements
Financial Accounting MCQ on Financial Statements
Also Read Financial Accounting MCQ
- MCQ on GAAP
- MCQ on Basic Fundamentals
- MCQ on Financial Statements
- MCQ on Accounting Standards
- MCQ on Depreciation
1. The balance of the petty cash is
(a) An expense
(b) An asset.
(c) An income
(d)None of the above
Answer (b) An asset
2. Fixed assets are:
(a) kept in the business for use over a long time for earning income
(b) meant for conversion into cash as quickly as possible.
(c) meant for resale
(d) None of the above
Answer (a) kept in the business for use over a long time for earning income
3. Goodwill is :
(a) tangible asset
(b) Intangible asset
(c) A current asset
(d) None of the above
Answer (b) Intangible asset
4. Stock is:
(a) Part of current assets
(b) Intangible.
(c) Included in the category of fixed assets
(d) None of the above
Answer (a) Part of current assets
5. The profit and loss account shows:
(a) The gross profit earned.
(b) Net profit earned
(c) Financial position of the concern
(d) None of the above
Answer (b) Net profit earned
6. Closing stock is valued at
(a) Cost or market prices whichever is lower
(b) Cost
(c) Market value,
(d) None of the above
Answer (a) Cost or market prices whichever is lower
7. The manufacturing account is prepared
(a) To ascertain the cost of the manufactured goods
(b) To show the sale proceeds from the goods produced during the year.
(c) To ascertain the profit or loss on the goods purchased
(d) None of the above
Answer (a) To ascertain the cost of the manufactured goods
8. Unearned Income Account is
(a) Expense
(b) Liability
(c) Asset
(d) None of the above
Answer (b) Liability
9. Assets are held for the purpose of:
(a) Resale
(b) Conversion into cash.
(c) Earning revenue
(d) None of the above
Answer (c) Earning revenue
10. Stock is valued at:
(a) Market price
(b) Cost or market prices whichever is lower
(c) Cost price,
(d) None of the above
Answer (b) Cost or market prices whichever is lower
11. Depreciation is provided on
(a) Fixed assets
(b) Outward charges,
(c) Current assets
(d) Intangible assets.
Answer (a) Fixed assets
12. Heavy advertising to launch a new product is a:
(a) Deferred revenue expenditure
(b) Capital expenditure
(c) Revenue expenditure
(d) None of the above
Answer (a) Deferred revenue expenditure
13……………… shown on the debit side of Trading Account
(a) Sales
(b) Closing stock
(c) Opening stock
(d) Gross Profit b/d
Answer (c) Opening stock
14………….is arrived at by deducting cost of goods sold from sales
(a) Cost of Production
(b) Gross Profit
(c) Net Profit
(d) None of the above
Answer (b) Gross Profit
15. In………. excess of debit over credit is known as…………
(a) Trading A/c, Gross Profit
(b) Profit & Loss A/c, Gross Profit
(c) Profit & Loss A/c, Net Loss
(d) Profit & Loss A/c, Net Profit.
Answer (c) Profit & Loss A/c, Net Loss
16. Closing stock balance given in the debit side of the trial balance will be written in financial statement in………
(a) Trading A/c Credit Side
(b) Liabilities
(c) Asset Side
(d) None of the above
Answer (c) Asset Side
17. The properties owned by the business are
(a) Capital
(b) Assets
(c) Accounting Equation.
(d) None of the above
Answer (b) Assets
18. A debit means
(a) Decrease in Assets
(b) Increase in Liability
(c) An increase in Asset
(d) Increase in Liability.
Answer (c) An increase in Asset
19. A debit balance in which of the following accounts would indicate a likely error
(a) Fees Earned
(b) Cash
(c) Accounts Receivable
(d) Miscellaneous Expenses.
Answer (a) Fees Earned
