Accounts Quiz for Commerce Students

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Accounts Quiz for Commerce Students

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MCQ Accounts Quiz Question Papers

1. The unfavourable balance of Profit and Loss Account should be
(A) added with liabilities
(B) subtracted from current assets
(C) subtracted from capital
(D) subtracted from liabilities

2. Which of the following is an example of business liability?
(A) Land
(B) Building
(C) Cash
(D) Creditors

3. Deewali advance given to an employee is
(A) Revenue Expenditure
(B) Capital Expenditure
(C) Deferred Revenue Expenditure
(D) Not an Expenditure

4. Which of the following shows summary of a company’s financial position at a specific date?
(A) Profit & Loss Account
(B) Cash Flow Statement
(C) Balance Sheet
(D) Income and Expenditure Account

5. When Capital is increased by an amount, it is recorded on the
(A) right or debit side of the Capital account
(B) left or credit side of the Capital account
(C) left or debit side of the Capital account
(D) right or credit side of the Capital account

6. Interest on loan paid by business is an example of
(A) Revenue expense
(B) Income
(C) Asset
(D) Return outward

7. Which of the following is not a function of Bank reconciliation statement?
(A) To check for errors in Balance sheet
(B) To update omitted entries into the Cash book
(C) To update omitted entries into the Bank statement
(D) To reconcile the difference in Bank statement and Cash book

8. Which of the following account will be credited when a typewriter is sold that has been used in the office?
(A) Office Equipment Account
(B) Cash Account
(C) Sales Account
(D) Purchases Account

9. Which of the following entry will be recorded when the Bad Debts are recovered?
(A) Cash(Dr.) and Bad Debts Recovered (Cr)
(B) Provision for doubtful debts(Dr.) and Cash(Cr.)
(C) Bad Debts Recovered (Dr.) and Profit and Loss(Cr.)
(D) None of the given options

10. Goods of Rs. 1,000 purchased from Mr. “A” was recorded in Sales book, rectification of this error will
(A) reduce the gross profit
(B) increase the gross profit
(C) have no effect on gross profit
(D) None of the given options

11. Which of the following is an example of operating expense?
(A) Purchasing operating equipment
(B) Purchasing a vehicle
(C) Purchasing cleaning services
(D) Buying a computer

12. When closing stock is given in Trial balance, then it will effect
(A) Trading and Profit & Loss Account only
(B) Balance sheet only
(C) Owner’s equity only
(D) Trading and Profit & Loss account and Balance sheet

13. Statement of cash flows includes
(A) Financing activities
(B) Operating activities
(C) Investing activities
(D) All of these

14. In cash flows, when a firm invests in fixed assets and short-term financial investments results in
(A) increased Equity
(B) increased Liabilities
(C) decreased Cash
(D) increased Cash

15. The purchase value of assets over its serviceable life is categorised as
(A) Appreciated Liabilities
(B) Appreciated Assets
(C) Depreciated Value
(D) Appreciation

16. Warehouse rent is a part of which cost?
(A) Production cost
(B) Distribution cost
(C) Prime cost
(D) Factory cost

17. The break-even point is that at which
(A) the level of activity at which the business operates most economically.
(B) the level of activity at which the business makes neither a profit nor a loss
(C) the fixed costs are lowest.
(D) the variable cost per unit is minimized.

18. Sales commissions are classified as
(A) Prime costs
(B) Period costs
(C) Product costs
(D) Indirect labour cost

19. Which of the following is a direct labour cost?
(A) Supervisors’ salaries in the factory
(B) Costs of the payroll accounting section
(C) A bonus paid to the store man
(D) The wages of an operative paid on the basis of output achieved

20. Fixed cost per unit decreases when
(A) Production volume increases
(B) Production volume decreases
(C) Variable cost per unit decreases
(D) Variable cost per unit increases

21. The main purpose of Cost accounting is to
(A) maximize profits
(B) help in inventory valuation
(C) provide information to management for decision making
(D) aid in the fixation of selling price

22. Find the incorrect one : “The personnel of a non-Bank Treasury consists of”
(A) the Collector of Deputy Commissioner of the District
(B) the Treasury Officer, generally a Deputy C0lleetor
(C) the Office Superintendent
(D) the Accountant

23. Scrutiny by Audit of Rules and orders should see and report that
(A) they do not conflict with the orders of or rules made by, any higher authority
(B) they are consistent with the essential requirements of audit and accounts determined by the Comptroller and Auditor General
(C) they are inconsistent with any provisions of the Constitution or of the laws made thereunder
(D) in case in which they have not been separately approved by a competent authority. the issuing authority possesses the necessary rules making power

24. In processing the Review, the following stages are involved, find out the incorrect one
(A) Preliminary study of the selected project/scheme
(B) Development of Audit Plan
(C) Discussion with the Audited Entity
(D) Preparing the Review Report

25. Every payment of money on Government account involves different principal processes. which one is correct?
(A) the submission of a claim
(B) the disbursement of the money claimed; and
(C) the incorporation of the transaction in the accounts
(D) All of these.

26. Expenditure in excess of the amount of a Grant or Appropriation as well as expenditure not falling within the scope or intention and Grant or Appropriation unless regularized as laid down in Article ———– & or Article ————- of the Constitution, should be treated as unauthorized expenditure. Fill in the blanks from the options given below
(A) Article 125 and 225
(B) Article 115 and 205
(C) Article 15 and 271
(D) None of these

27. The responsibility for watching the progress of expenditure against a Grant or Appropriation devolves on the _________ and the __________ is ultimately responsible for keeping the expenditure within the Grant or Appropriation. Fill the blanks from the options given below.
(A) Minister of the Department
(B) Accountant
(C) Executive
(D) Office Superintendent

28. Detailed appropriation audit is conducted in two stages, which one is correct?
(A) Sanction audit, i.e. audit of orders of allotment of funds and reappropriation which are to be enforced in audit
(B) Audit of expenditure against allotments
(C) Both (A) and (B)
(D) None of the given options

29. The audit of Public Works expenditure falls under three heads, which one falls among the three heads?
(A) Preliminary internal check by the Divisional Accountant in the divisional office
(B) Audit in the Audit Office and
(C) Test audit at the periodical inspection of the divisional office
(D) All of these

30. “Three parties in the audit” is one of the Elements of Performance Audit, which option is correct?
(I) The Auditor
(II) The Responsible Party
(III) The Reader
(A) II
(B) I & III
(C) II & III
(D) None of these

31. Performance auditors may find answers to the two basic questions, these are
(A) things being done in the right way with right personnel?
(B) the things being done timely with adequate resources?
(C) Both (A) & (B)
(D) None of the above options.

32. Statutory Auditor is appointed for audit of Government Companies by
(A) The Accountant General of the State
(B) Governor of the State
(C) Chief Secretary of the State
(D) C&AG of India

33. The total period of appointment of a statutory auditor including the initial appointment should not ordinarily exceed ___________ financial years. Fill in the gap.
(A) Two
(B) Five
(C) Four
(D) seven

34. The Comptroller and Auditor General is authorised to
(A) direct the manner in which the statutory auditor shall audit the accounts of the company and to give to such auditor instructions in regard to any matter relating to the performance of his functions as such
(B) conduct a supplementary or test audit of the accounts of the company
(C) Both the above statements are correct
(D) None of the above statements are correct

35. On completion of audit, the statutory auditor shall prepare his audit report under the _____________ and submit a copy to the Accountant General (Audit). Fill the blank.
(A) CAG’s DPC Act, 1971
(B) Companies Act, 1956
(C) Finance Act for the year when audits done
(D) None of the given options

36. Internal Control consists of five interrelated components Viz,
1. Control Environment
2. Risk Assessment
3. _________________
4. Information and Communication
5. Monitoring
Find the missing one
(A) Audit Activities
(B) Control Activities
(C) Surprise Check
(D) None of the given options

37. When counting cash on hand, the auditor should
(A) ensure presence of somebody from management
(B) obtain a receipt from custodian as to its return
(C) ensure that postage and revenue stamps are not counted in physical count
(D) ensure that temporary advances to employees are counted to calculate balance of cash in hand

38. While observing a client’s annual physical inventory, an auditor conducted test counts for certain test, counts were higher than the recorded quantities in the client’s perpetual records. This situation could be the result of the client’s failure to record
(A) Purchase returns
(B) Sales returns
(C) Goods with consignor
(D) Purchase discounts

39. The auditor has noticed existence of recurring losses on sale of fixed assets, this indicates
(A) Depreciation charges are insufficient
(B) Policy of sale or disposal of fixed assets needs to be reviewed
(C) The sale of fixed assets have not been properly authorised
(D) Accounting errors

40. Which of the following statements is not true?
(A) Valuation of assets is the responsibility of management.
(B) The auditor can rely on a certificate issued by an authorized valuations as to the valuation of assets in the Balance sheet.
(C) The auditor should value the asset as per generally accepted accounting principle.
(D) Valuation is no part of auditor’s duty.

41. CAG of India is appointed under Article ____________ of the Constitution of India.
(A) 148
(B) 348
(C) 175
(D) 275

42. The administrative expenses of the office of the Comptroller and Auditor-General, including all salaries, allowances and pensions payable to or in respect of the persons serving in that office, shall be _____________ upon the Consolidated Fund of India.
(A) Voted
(B) Charged
(C) Both (A) & (B)
(D) None of the given options

43. The reports of the Comptroller and Auditor General of India relating to the accounts of a State shall be submitted to the ___________ of the State, who shall cause them to be laid before the Legislature of the State.
(A) Chief Secretary
(B) Finance Minister
(C) Finance Secretary
(D) Governor

44. The distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between them and the allocation between the States of the respective shares of such proceeds are recommended by the
(A) Central Finance Commission
(B) Finance Commission of the State
(C) Both (A) and (B)
(D) None of the given options

45. The measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State on the basis of the recommendations made by the
(A) Central Finance Commission
(B) Finance Commission of the State
(C) Both (A) and (B)
(D) None of the given options

46. Government Account is kept on
(A) Cash Basis
(B) Accrual Basis
(C) Both (A) & (B)
(D) None of the given options

47. If 1st Day of April is Sunday, then Financial Year commences on
(A) 31st March
(B) 2nd April
(C) 1st April
(D) None of the given options

48. Accounts of receipts and outgoings of the Government for the year, together with the financial results are disclosed through
(A) Appropriation Accounts
(B) Finance Accounts
(C) Both (A) & (B)
(D) None of the given options

49. Govt. Accounts are kept in three parts Viz,
1. Consolidated Funds
2. Contingency Funds and
3. ________________
Find the missing one.
(A) Revenue Account
(B) Provident Fund Account
(C) Capital Account
(D) Public Account

50. Ways and Means Advances are given to the State Govt. by
(A) Reserve Bank of India
(B) State Bank of India
(C) Govt. Treasuries
(D) None of the given options