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: Accounts payable belong to which class
A) Expenses
B) Income
C) Liabilities
D) Assets
✅ Correct Answer: C
Explanation: Amounts payable to creditors are liabilities of the business.
Q: Discount received is recorded as
A) Income
B) Asset
C) Expense
D) Liability
✅ Correct Answer: A
Explanation: Discounts received reduce expense and increase income.
Q: Bad debts recovered are shown as
A) Loss
B) Income
C) Expense
D) Asset
✅ Correct Answer: B
Explanation: Recoveries of previously written-off amounts are treated as income.
Q: Inventory is considered as part of
A) Fixed assets
B) Current assets
C) Liabilities
D) Equity
✅ Correct Answer: B
Explanation: Inventory is a current asset representing unsold goods.
Q: Freight paid on goods purchased is added to
A) Closing stock
B) Capital account
C) Revenue
D) Cost of goods purchased
✅ Correct Answer: D
Explanation: Freight is included in the purchase cost to arrive at total cost.
Q: Final accounts are prepared to ascertain
A) Cash flow
B) Financial results
C) Tax amount
D) Receivables
✅ Correct Answer: B
Explanation: Final accounts reveal the profit or loss and the financial position.
Q: Capital contributed by partners is recorded in
A) Profit and loss account
B) Income account
C) Liability account
D) Partner’s capital account
✅ Correct Answer: D
Explanation: Contributions are credited to the respective partner’s capital accounts.
Q: Value of closing stock is determined by
A) Invoice price
B) Sales return
C) Cost or market price whichever is lower
D) Market price only
✅ Correct Answer: C
Explanation: Closing stock is valued conservatively using the lower of cost or market.
Q: Outstanding income is considered a
A) Expense
B) Equity
C) Current asset
D) Liability
✅ Correct Answer: C
Explanation: Income earned but not received is an asset until collected.
Q: Receipts and Payments account records
A) Only credit items
B) Only revenue items
C) Adjusted entries
D) All receipts and payments
✅ Correct Answer: D
Explanation: This account reflects all cash and bank transactions of a period.