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.

271. Net profit is computed in which of the following?

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Balance sheet
Income statement
Cash flow statement
Statement of changes in equity
✅ The correct answer is B.
Net profit is computed in Income statement. Net income, also called net profit, is a calculation that measures the amount of total revenues that exceed total expenses. It other words, it shows how much revenues are left over after all expenses have been paid.

274. Which of the following is true about a trial balance?

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It lists down the balances of accounts
It lists down the balances of a balance sheet
It is a kind of financial statement
It is not a part of accounting cycle
✅ The correct answer is A.
Trial balance It lists down the balances of accounts. The debit balance values will be listed in the debit column of the trial balance and the credit value balance will be listed in the credit column.

276. Which of the following is the most important document of the company?

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Memorandum of association
Articles of association
Annual report
Prospectus
✅ The correct answer is A.
Memorandum of association is the most important document of the company. It is the charter of the company, which defines the objects of the company’s formation and the utmost possible scope of its operations beyond which its actions cannot go.

279. “Treating a revenue expenditure as a capital expenditure” is an example of

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Compensating error
Error of principle
Error of omission
Error of commission
✅ The correct answer is B.
“Treating a revenue expenditure as a capital expenditure” is an example of Error of principle. An error of principle is an accounting mistake in which an entry is recorded in the incorrect account, violating the fundamental principles of accounting. An error of principle is a procedural error, meaning that the value recorded was the correct value but placed incorrectly.

280. The cost of a small calculator is treated as an expense and not shown as an asset in a financial statement of a business entity due to

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Materiality concept
Matching concept
Periodicity concept
Conservatism concept
✅ The correct answer is A.
The cost of a small calculator is treated as an expense and not shown as an asset in a financial statement of a business entity due to Materiality concept. The materiality concept refers to a situation where the financial information of a company is considered to be material from the point of view of the preparation of the financial statements if it has the potential to alter the view or opinion of a reasonable person.