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.

22. Which one of the following inventory costing methods is supposed to issue the most recently purchased goods?

by
A) FIFO
B) LIFO
C) AVCO or averrage cost
D) Moving average
✅ ANSWER: B
LIFO inventory costing methods is supposed to issue the most recently purchased goods. LIFO, which stands for last-in-first-out, is an inventory valuation method which assumes that the last items placed in inventory are the first sold during an accounting year.

23. American companies prepare their financial statement in Dollars whereas Japanese companies produce financial statement in Yen. This is an example of:

by
A) Stable monetary unit concept
B) Unit of measurement concept
C) Money value concept
D) Current swap concept
✅ ANSWER: B
American companies prepare their financial statement in Dollars whereas Japanese companies produce financial statement in Yen. This is an example of Unit of measurement concept.

27. Noting charges are paid at the time of

by
A) Renewal of the bill
B) Retirement of the bill
C) Dishonor of the bill
D) None of the above
✅ ANSWER: C
Noting charges are paid at the time of Dishonor of the bill. When a Bill of Exchange is dishonoured, in order to prove the fact, the drawer (or holder) may get the bill of exchange noted and protested through a public official known as “Notary Public” Noting is the recording of the fact of dishonour by a Notary public which becomes an evidence of dishonour.

29. Information about an item is _______ if its ommission or misstatement might influence the financial decision of the users taken on the basis of that information

by
A) Concrete
B) Complete
C) Immaterial
D) Material
✅ ANSWER: D
Materiality is a concept in financial accounting and reporting that firms may disregard trivial matters, but they must disclose everything that is important to the report audience. Items that are important enough to matter are material items.

30. What is depreciation?

by
A) Cost of a fixed asset
B) Cost of a fixed asset’s repair
C) The residual value of a fixed asset
D) Portion of a fixed asset’s cost consumed during the current accounting period
✅ ANSWER: D
Portion of a fixed asset’s cost consumed during the current accounting period is known as depreciation. Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account for declines in value. Businesses depreciate long-term assets for both tax and accounting purposes.