Accounting MCQs
Accounting MCQs help students and professionals master financial, cost, and managerial accounting, covering topics like journal entries, financial statements, and ratios—ideal for certifications, competitive exams, and business studies to boost skills and exam performance.
Q: Prepaid rent is included in
A) Fixed assets
B) Equity
C) Current liabilities
D) Current assets
✅ Correct Answer: D
Explanation: Prepaid amounts are current assets as they provide future benefit.
Q: Opening stock appears in
A) Trading account only
B) Balance sheet only
C) Trading and balance sheet
D) Profit and loss account
✅ Correct Answer: C
Explanation: Opening stock is part of trading account and also shown in the balance sheet.
Q: Accounting equation is based on
A) Capital = Assets – Liabilities
B) Assets = Liabilities + Capital
C) Assets = Liabilities – Capital
D) Liabilities = Assets + Capital
✅ Correct Answer: B
Explanation: The equation balances total assets with capital and liabilities.
Q: Income received in advance is treated as
A) Expense
B) Asset
C) Liability
D) Profit
✅ Correct Answer: C
Explanation: Such income is unearned and treated as a liability until earned.
Q: Goodwill is classified as
A) Current liability
B) Intangible asset
C) Tangible asset
D) Fixed liability
✅ Correct Answer: B
Explanation: Goodwill is an intangible asset representing business reputation.