Accounting MCQs

 Accounting MCQs solution 

1.       Economic activity undertaken with the motive of earning profits and maximizing wealth for the owners is called

Answer: Business

2.       Concepts and techniques that are used to measure and report financial information about an economic unit are called?

Answers: Accounting

3.       Main Objectives of Accounting

Answers( Providing Information to the Users for Rational Decision-making, Systematic Recording of Transactions, Ascertaining the Financial Position of the Business and Knowing the Solvency Position

 

4.       Function of Accounting

Answers (Measurement, Forecasting, Decision-making, Comparison & Evaluation, Control, Government Regulation, and Taxation)

5.       Activity concerned with recording and classifying financial data related to business operations is called

Answer: Bookkeeping

 

6.       _______ _____accounting is a method of recording transactions by which revenue, costs, assets, and liabilities are reflected in the accounts for the period in which they accrue.

Answer: Accrual Basis

 

7.       ______________Accounting is a method of recording transactions by which revenues, costs, assets, and liabilities are reflected in the accounts for the period in which actual receipts or actual payments are made.

Answer: Accrual Basis

8.       ___________ accounting, incomes are recognized as in Cash Basis Accounting i.e. when they are received in cash, and expenses are recognized on an accrual basis i.e. during the accounting period in which they arise irrespective of when they are paid.

Answer: Hybrid or Mixed Basis

 

9.       Business activity that involves the exchange of money or money’s worth between parties is called_______

Answer: Transaction

 

10.   : The excess of Revenue Income over expense is called_______

Answer: Profit

 

11.   The excess of expense over income is called_______

Answer: Loss

 

12.   Resource owned by the business with the purpose of using it for generating future profits is called_________

Answer: Assets

 

13.   Capital assets which have some physical existence is called________

Answer: Tangible Assets  

 

14.   The capital assets which have no physical existence and whose value is limited by the rights and anticipated benefits that possession confers upon the owner are known as__________

Answer: intangible Assets

 

15.   Assets classified into _______________and _____________

Answer: Current Assets and Fixed Assets

 

16.   Financial obligation which represents the amount of money that the business owes to the other parties is called_______

Answer: Liability

 

17.   Liability classified into _______________and __________

Answer: Current Liability and Fixed liability

 

18.   Excess of current assets over current liabilities is called______

Answer: working capital

 

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