Accounting

Master the fundamentals of Accounting with our extensive collection of Accounting MCQs with answers and detailed explanations. Covering topics like financial accounting, cost accounting, auditing, partnership accounts, corporate accounting, and managerial accounting, these multiple-choice questions are ideal for students, teachers, and candidates preparing for competitive exams (CA, ACCA, ICMA, CSS, PMS, NTS, FPSC, PPSC, UPSC, etc.). Each question is followed by a clear solution and explanation to strengthen your concepts, improve problem-solving skills, and boost exam preparation. Perfect for practice, self-assessment, and revision in Accounting.

112. Merchandise on hand at either the beginning or end of the accounting period is called

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Raw material
Cost of goods sold
Work in progress
Inventory
✅ The correct answer is D.
Merchandise on hand at either the beginning or end of the accounting period is called Inventory. Inventory is the array of finished goods or goods used in production held by a company. Inventory is classified as a current asset on a company’s balance sheet, and it serves as a buffer between manufacturing and order fulfillment.

114. Heavy amount spent for the advertisement of new company product is

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Revenue expenditure
Deferred Revenue expenditure
Capital expenditure
Either ‘a’ or ‘c’
✅ The correct answer is B.
Heavy amount spent for the advertisement of new company product is Deferred Revenue expenditure. Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, but its benefits are to be derived in multiple future accounting periods.

116. Which of the following is not a transaction?

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Goods are purchased on cash basis for Rs.1000
Salaries are paid for the month of May 2010
Land is purchased for Rs. 10 lacs
An employee dismissed from the job
✅ The correct answer is D.
An employee dismissed from the job is not a transaction. A transaction is an agreement between a buyer and a seller to exchange goods, services or financial instruments.

118. Accounts receivable & inventory are the examples of

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Current assets
Liquid asset
Fixed asset
Capital asset
✅ The correct answer is A.
Accounts receivable & inventory are the examples of Current assets. Current assets include cash, cash equivalents, accounts receivable, stock inventory, marketable securities, pre-paid liabilities, and other liquid assets. Current assets are important to businesses because they can be used to fund day-to-day business operations and to pay for the ongoing operating expenses.

120. Prepaid expenses are considered as

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Asset
Liability
Loss
Capital
✅ The correct answer is A.
Prepaid expenses are considered as Asset. Prepaid expenses are future expenses that have been paid in advance. You can think of prepaid expenses as costs that have been paid but have not yet been used up or have not yet expired. The amount of prepaid expenses that have not yet expired are reported on a company’s balance sheet as an asset.