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.

131. Which of the following would NOT be considered as a component of ‘cost’ of stock?

by
Transportation inward costs
Import duties
Salaries of selling staff
Purchase price
✅ The correct answer is C.
Salaries of selling staff would NOT be considered as a component of ‘cost’ of stock. When investors purchase shares of stock, the price paid includes two components: the price of the stock and the fee charged by the brokerage firm, called commission.

132. Discount received is recorded on which of the following side of a cash book?

by
Receipts
Payments
Income
Expenditure
✅ The correct answer is B.
Discount Received is a column found on the credit side of the Cash Book.
When a creditor is paid and the business receives a discount the discount received and is recorded in the discount received column and the corresponding entry appears as a debit in the creditor’s account.

136. Legal expenses incurred on a suit for breach of contract to supply goods is a

by
Capital expenditure
Deferred Revenue expenditure
Revenue expenditure
Both ‘b’ and ‘c’
✅ The correct answer is C.
Legal expenses incurred on a suit for breach of contract to supply goods is a Revenue expenditure. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.

138. A company cannot issue redeemable preference shares for a period exceeding

by
10 years
20 years
30 years
15 years
✅ The correct answer is B.
A company cannot issue redeemable preference shares for a period exceeding 20 years. A company may issue preference shares which are liable to be redeemed within a period not exceeding twenty years from the date of their issue under section 55 of the Companies Act 2013.

139. Which one of the following methods of inventory costing produces ending stock cost close to the market value of the inventory?

by
FIFO
LIFO
AVCO or averrage cost
Answer: Option A
✅ The correct answer is A.
FIFO methods of inventory costing produces ending stock cost close to the market value of the inventory. FIFO (First-in, first-out) method is based on the perception that the first inventories purchased are the first ones to be sold. It is a cost flow assumption for most companies. Since the theory perfectly matches to the actual flow of goods, therefore it is considered as the right way to value inventory.