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.

151. Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation is termed as

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Contingent liability
Liability
Provision
Reserve
✅ The correct answer is C.
Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation is termed as Provision. A provision is an account which records a present liability of an entity.

153. Interest on drawings is ___ for the business

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Loss
Expense
Gain
None of the above
✅ The correct answer is C.
Interest on drawings is gain for the business. Interest on drawings is an income to the firm, and hence it is credited to the profit and loss appropriation account. On the other hand, interest on drawings is an expense to the partners, and hence it is debited to their capital accounts.

154. Which of the following financial statements show the financial health of an organisation at a stated point of time?

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Balance sheet
Trading and Profit & Loss account
Cash flow statement
Statement of retained earnings
✅ The correct answer is A.
Balance sheet financial statements show the financial health of an organisation at a stated point of time. A balance sheet is a financial statement that reports a company’s assets, liabilities and shareholders’ equity at a specific point in time, and provides a basis for computing rates of return and evaluating its capital structure.

157. Provision for bad debts is made as per the

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Conservatism concept
Cost concept
Consistency concept
Going concern concept
✅ The correct answer is A.
Provision for bad debts is made as per the Conservatism concept. The conservatism principle is the general concept of recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received.

160. The expenses that have fallen due for payment but not paid are

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Outstanding expenses
Deffered expenses
Accrues expenses
Prepaid expenses
✅ The correct answer is A.
The expenses that have fallen due for payment but not paid are Outstanding expenses. Outstanding expenses are those expenses which have been incurred during the current accounting period and are due to be paid, however, the payment is not made.