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.

83. In depreciation calculation, the useful life of a fixed asset is:

by
a certain figure
an estimate
a predetermined figure for all fixed assets
Answer: Option B
✅ The correct answer is B.
In depreciation calculation, the useful life of a fixed asset is an estimate. Depreciation is “the systematic and rational allocation of the acquisition cost of an asset, less its estimated salvage value or residual value, over the assets estimated useful life.” Simply said, it’s a way of allocating a portion of the cost of an asset over the period it can be used.

84. What does ‘aged debtors analysis’ signify?

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shows how long debts have been outstanding
How old the customers are
How long does a business take to repay the bank loans
Minimum number of old debtors
✅ The correct answer is A.
Aged debtors analysis shows how long debts have been outstanding. An aged debtors report is a totalled list of all the invoices your customers haven’t yet paid you for, less any credit notes you’ve issued to your customers and not yet refunded them for.

85. Purchase of fixed assets on credit is originally recorded in

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Purchases book
Ledger
Cash book
Journal Proper
✅ The correct answer is D.
Purchase of fixed assets on credit is originally recorded in Journal Proper. On the assumption that the asset was purchased on credit, the initial entry is a credit to accounts payable and a debit to the applicable fixed asset account for the cost of the asset.

87. An increase in the value of fixed asset is referred to as:

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Depreciation
Appreciation
Market capitalization
Reverse depreciation
✅ The correct answer is B.
An increase in the value of fixed asset is referred to as Appreciation. Appreciation, in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates.

88. Which of the following capital is required for the registration of the company?

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Issued capital
Subscribed capital
Authorized capital
Reserve capital
✅ The correct answer is C.
Authorized capital is required for the registration of the company. The authorized capital of a company (sometimes referred to as the authorized share capital, registered capital or nominal capital, particularly in the United States) is the maximum amount of share capital that the company is authorized by its constitutional documents to issue (allocate) to shareholders.

89. Cost of a fixed asset – Accumulated depreciation expenses of the fixed asset = ?

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Book value of a fixed asset
Market value of a fixed asset
Historical cost of a fixed asset
Recoverable amount if a fixed asset
✅ The correct answer is A.
Cost of a fixed asset – Accumulated depreciation expenses of the fixed asset = Book value of a fixed asset. Except for the cost of land, the cost of a fixed asset is spread over its estimated useful life to the business; the amount allocated to each period is called depreciation expense.