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.

212. Accounting is the process of matching

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Benefits and costs
Revenues and costs
Cash inflows and outflows
Potential and real performance
✅ The correct answer is B.
Accounting is the process of matching Revenues and costs. The matching concept is an accounting practice whereby firms recognize revenues and their related expenses in the same accounting period. Firms report “revenues,” that is, along with the “expenses” that brought them.

213. Economic life of an enterprise Is split into periodic interval as per ____ concept

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Materiality
Periodicity
Accrual
Conservation
✅ The correct answer is B.
Economic life of an enterprise Is split into periodic interval as per Periodicity concept. It is the concept that each accounting period has an economic activity associated with it, and that the activity can be measured, accounted for, and reported upon.

215. Those transactions for which there is no separate book, are recorded in the

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Cash book
Bills receivable book
Bills payable book
Journal Proper
✅ The correct answer is D.
Those transactions for which there is no separate book, are recorded in the Journal Proper. Only those transactions, which cannot be conveniently recorded in any of the other books of original entry i.e., subsidiary books or which are not sufficiently numerous to necessitate a special book being devised for them, are recorded in this book.

217. Transaction between business and owner are recorded following ____ concept

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Periodicity
Business entity
Prudence
Going concern
✅ The correct answer is B.
Transaction between business and owner are recorded following Business entity concept. The business entity concept states that the transactions associated with a business must be separately recorded from those of its owners or other businesses.

218. Which of the following is TRUE about the treatment of insurance premium paid in advance

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Current asset
Current liability
Short term liability
Fixed asset
✅ The correct answer is A.
Current asset is TRUE about the treatment of insurance premium paid in advance. Current assets represent all the assets of a company that are expected to be conveniently sold, consumed, utilized or exhausted through the standard business operations, which can lead to their conversion to a cash value over the next one year period.

219. _______ is the common base for preparing a trial balance

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Ledger accounts
General Journal
Specialized journals
Balance sheet
✅ The correct answer is A.
Ledger accounts is the common base for preparing a trial balance. This process is known as ‘balancing off’ the general ledger accounts. The trial balance can then be prepared by listing each closing balance from the general ledger accounts as either a debit or a credit balance.

220. Cash Account is

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Personal account
Real account
Nominal account
None of the above
✅ The correct answer is B.
Cash Account is Real account. A real account is an account that retains and rolls forward its ending balance from period to period. The areas in the balance sheet in which real accounts are found are assets, liabilities, and equity.