Accounting MCQs
Accounting MCQs are designed to help students and professionals reinforce their knowledge in financial accounting, cost accounting, and managerial accounting. This section covers core topics such as journal entries, ledger posting, trial balance, financial statements, ratio analysis, depreciation, and accounting standards. Whether you're preparing for professional certifications like ACCA, CA, or CMA, or sitting for competitive exams such as PPSC, FPSC, NTS, and bank recruitment tests, these MCQs provide a solid foundation. They're also useful for B.Com, BBA, and MBA students looking to enhance their conceptual clarity and problem-solving abilities. With real-world scenarios and exam-oriented questions, these MCQs make accounting easier to understand and apply. Practice regularly to boost your analytical skills and exam performance.
Q: Closing stock is adjusted in the final accounts through
A) Profit and loss only
B) Cash book
C) Trading and balance sheet
D) Ledger only
✅ Correct Answer: C
Explanation: Closing stock affects both the trading account and the balance sheet.
Q: Purchase return reduces the value of
A) Assets
B) Expenses
C) Sales
D) Purchases
✅ Correct Answer: D
Explanation: Goods returned to suppliers reduce the overall purchase total.
Q: Partnership deed outlines terms related to
A) Dividend payment
B) Customer data
C) Shareholding
D) Partner roles
✅ Correct Answer: D
Explanation: A partnership deed details responsibilities and profit-sharing of partners.
Q: Wages paid for installation of machinery are treated as
A) Capital expenditure
B) Revenue expense
C) Operating expense
D) Miscellaneous expense
✅ Correct Answer: A
Explanation: Costs related to installing assets are capitalized as part of the asset’s value.
Q: Drawings are deducted from
A) Capital
B) Gross profit
C) Sales
D) Revenue
✅ Correct Answer: A
Explanation: Owner’s withdrawals reduce the capital balance in the business.
Q: Discount allowed is considered as
A) Asset
B) Expense
C) Liability
D) Income
✅ Correct Answer: B
Explanation: Discounts given to customers reduce income and are treated as expenses.
Q: Accounting year refers to the period for
A) Preparing financial statements
B) Tax filing
C) Daily reporting
D) Stock valuation
✅ Correct Answer: A
Explanation: The accounting year is the period over which a company reports its results.
Q: Accrued expenses are classified under
A) Capital
B) Current assets
C) Income
D) Current liabilities
✅ Correct Answer: D
Explanation: Accrued expenses are unpaid amounts due and are liabilities.
Q: Rent outstanding at the end of the year is recorded as
A) Liability
B) Income
C) Expense
D) Asset
✅ Correct Answer: A
Explanation: Outstanding rent is an unpaid obligation, hence a liability.
Q: Journal entries are recorded in chronological order in
A) Cash book
B) Journal proper
C) Ledger
D) Trial balance
✅ Correct Answer: B
Explanation: Journal entries are recorded in the journal in the order they occur.