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: Loss from sale of fixed asset is shown under
A) Direct expenses
B) Indirect expenses
C) Liabilities
D) Assets
✅ Correct Answer: B
Explanation: Such losses are considered indirect expenses in the profit and loss account.
Q: Capital expenditure leads to
A) Losses
B) Recurring expenses
C) Acquisition of assets
D) Reduction in capital
✅ Correct Answer: C
Explanation: Capital expenditure is incurred for acquiring or improving fixed assets.
Q: Drawings in kind are recorded at
A) Book value
B) Purchase price
C) Cost price
D) Market value
✅ Correct Answer: C
Explanation: Goods withdrawn are valued at the cost price for accounting.
Q: Salaries account is classified as
A) Revenue
B) Personal
C) Nominal
D) Real
✅ Correct Answer: C
Explanation: Expenses such as salaries are nominal accounts.
Q: Debentures are shown under which heading
A) Long-term liability
B) Equity
C) Reserves
D) Current liability
✅ Correct Answer: A
Explanation: Debentures are borrowed funds repayable in the long term.
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.