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.

11. Earned but not yet received income is treated as

A) Asset
B) Liability
C) Loss
D) Capital
✅ ANSWER: A
Earned but not yet received income is treated as Asset. It is income earned during a particular accounting period but not received until the end of that period. It is treated as an asset for the business.

12. Net Profit = Gross Profit minus

A) Operating expenses
B) Product cost
C) Deferred expenses
D) Direct cost
✅ ANSWER: A
Net Profit = Gross Profit minus Operating expenses.

13. A company purchased a vehicle for Rs.6000. It will be used for 5 years and its residual value is expected to be Rs.1000. What is the annual amount of depreciation using straight line method of depreciation?

A) Rs. 1000
B) Rs. 2000
C) Rs. 3000
D) Rs. 5000
✅ ANSWER: A
Cost of the asset = Rs. 6,000
Salvage Value = Rs. 1,000
Total Depreciation Cost = Cost of asset – Salvage Value = 6000 – 1000 = Rs. 5000
Useful life of the asset = 5 years
Thus, annual depreciation cost = (Cost of asset – Salvage Cost)/Useful Life = 5000/5 = Rs. 1000.

14. Depreciable amount + Residual value of a fixed asset = ?

A) Depreciation expenses
B) Accumulated depreciation
C) Cost of the fixed asset
D) Future economic benefits of a fixed asset
✅ ANSWER: C
Depreciable amount + Residual value of a fixed asset = Cost of the fixed asset. Fixed assets are depreciated only to the extent of their depreciable amount, which equals cost minus the salvage value.

15. Cost incurred for the maintenance of shop is considered as

A) Deffered expense
B) Capital expenditure
C) Revenue expenditure
D) Preliminary expense
✅ ANSWER: C
Cost incurred for the maintenance of shop is considered as Revenue expenditure. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.

17. Promissory note is prepared by

A) Drawer
B) Endorsee
C) Drawee
D) All of the above
✅ ANSWER: A
Promissory note is prepared by Drawer. Promissory note is prepared and signed by the a person / organisation ( borrower) while borrowing money from a lender.

19. Which of the following event is subject matter of Accounting?

A) Death of key executive of the business
B) Strike of workers
C) Payment of Rs.1000 to bank in discharge of outstanding loan
D) Marriage of the daughter of the MD of the company
✅ ANSWER: C
Payment of Rs.1000 to bank in discharge of outstanding loan is subject matter of Accounting.