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: Cheque received but not deposited is recorded as
A) Customer balance
B) Contra entry
C) Cash balance
D) Bank balance
✅ Correct Answer: C
Explanation: Such cheques are considered part of cash-in-hand until deposited.
Q: Purchase of machinery is recorded as
A) Operating expense
B) Capital expenditure
C) Deferred expense
D) Revenue expenditure
✅ Correct Answer: B
Explanation: Machinery is a fixed asset, and its purchase is treated as capital expenditure.
Q: Provision for depreciation is created to
A) Increase profit
B) Reflect true value of asset
C) Meet future liabilities
D) Record interest
✅ Correct Answer: B
Explanation: This provision ensures that asset values reflect wear and tear or obsolescence.
Q: Rent paid in advance appears under
A) Equity
B) Expense
C) Liability
D) Current asset
✅ Correct Answer: D
Explanation: Prepaid rent is treated as a current asset.
Q: Profit transferred to capital account reflects
A) Increase in capital
B) Increase in revenue
C) Decrease in income
D) Increase in liabilities
✅ Correct Answer: A
Explanation: Profits add to the owner's capital balance.