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.

281. Which account is the odd one out?

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Office furniture and equipment
Freehold land and building
Stock of raw materials
Plant and machinery
✅ The correct answer is C.
Stock of raw materials is the odd one out. Raw materials inventory is the total cost of all component parts currently in stock that have not yet been used in work-in-process or finished goods production. There are two subcategories of raw materials, which are: Direct materials.

282. A cash book that is used to record the small payments of cash is generally referred to as

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Simple cash book
Two columns cash book
Three columns cash book
Petty cash book
✅ The correct answer is D.
A cash book that is used to record the small payments of cash is generally referred to as Petty cash book. Petty cash book can be expressed as a formal summarization of the petty cash expenditures which refers to the day-to-day normal expenditures of the business which is not related to the direct line of the business.

283. Which of the following is not a financial statement?

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Profit and loss account
Profit and loss appropriation account
Balance sheet
Trial Balance
✅ The correct answer is D.
Trial Balance is not a financial statement. Trial Balance is a list of closing balances of ledger accounts on a certain date and is the first step towards the preparation of financial statements. It is usually prepared at the end of an accounting period to assist in the drafting of financial statements.

284. Declared dividend should be classified in the balance sheet as a

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Provision
Current liability
Reserve
Current asset
✅ The correct answer is B.
Declared dividend should be classified in the balance sheet as a Current liability. Dividends payable are dividends that a company’s board of directors has declared to be payable to its shareholders. Until such time as the company actually pays the shareholders, the cash amount of the dividend is recorded within a dividends payable account as a current liability.

286. The trade discount on purchases is recorded

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When it is received
When the inventory is purchased
When the inventory is sold
Not at all recorded in the books
✅ The correct answer is D.
The trade discount on purchases are not all recorded in the books. Trade discount is not separately shown in the books of accounts, and all amounts recorded in a purchases or sales book are done in the net amount only.

289. Which one of the following is NOT true about capital expenditure?

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Creates future benefits
Incurred to acquire fixed assets
Incurred to increase the economic life of existing fixed assets
Reduce the profit of the concern
✅ The correct answer is D.
Capital expenditure does not reduce the profit of the concern. Capital expenditures refer to funds that are used by a company for the purchase, improvement, or maintenance of long-term assets to improve the efficiency or capacity of the company.