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.
Final accounts
Trial Balance
Each Ledger account
Each journal entry
✅ The correct answer is D.
Narrations are given at the end of each journal entry. Each journal entry includes the date, the amount of the debit and credit, the titles of the accounts being debited and credited (with the title of the credited account being indented), and also a short narration of why the journal entry is being recorded.
Deferred Revenue expenditure
Capital expenditure
Revenue expenditure
None of the above
✅ The correct answer is C.
Dismantling and demolition charges is a Revenue expenditure. A revenue expenditure is a cost that will be an expense in the accounting period when the expenditure takes place.
Land
Building
Environment
Living plants and animals
✅ The correct answer is D.
Living plants and animals is a biological asset. Biological asset is any living plant or animals owned by the business, and are typically measured at fair value minus selling costs.
Real accounts
Nominal accounts
Nominal and personal accounts
Real, personal and nominal accounts
✅ The correct answer is D.
The three column cash book represents Real, personal and nominal accounts. The three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.
It is added into current assets
It is deducted from Material available for use
It becomes opening stock of next year
It reduces the resources of business
✅ The correct answer is D.
Closing stock does not reduce the resources of business. Closing stock is the amount of inventory that a business still has on hand at the end of a reporting period.
Error of principle
Error of omission
Error of commission
Error of original entry
✅ The correct answer is A.
When one or both aspects of a transaction are recorded in the wrong class or category of account, it is called 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.
Bank balance
Cash at bank
Bank overdraft
Bank underdraft
✅ The correct answer is C.
A credit balance in cash book indicates Bank overdraft. Overdrafts are where the bank account becomes negative and the businesses in effect have borrowed from the bank. This is shown in the cash book as a credit balance.