Accounting mcqs

✅ The correct answer is A.
Under Straight line method, the amount of depreciation expenses remains same throughtout the life of the asset. In a straight line depreciation method, it is assumed that the asset uniformly depreciates over its useful life.

✅ The correct answer is D.
Prudence concept dictates the inclusion of ‘provision for doubtful debts’ in the financial statements.

✅ The correct answer is B.
Mr. Ali account will be credited when the goods are purchased on credit from Mr. Ali.

✅ The correct answer is B.
Money spent to acquire or upgrade physical assets is known as Capital expense, as the asset is expected to be utilised in a long run.

✅ The correct answer is B.
Credit note is the basis for recording a transaction in Sales return journal. A credit note or credit memo is a commercial document issued by a seller to a buyer.

✅ The correct answer is C.
Tax & freight paid on sale is a selling expense. Selling expense (or sales expense) includes any costs incurred by the sales department.

✅ The correct answer is B.
Postage stamps on hand are considered as Prepaid expenses. Prepaids are any expense the business pays for in advance, such as rent, insurance, office supplies, postage, travel expense, or advances to employees.

✅ The correct answer is B.
Payment of rent expenses is recorded on Payments side of cash book. All cash payments are recorded by date on the right-hand side.

✅ The correct answer is C.
Cash received from debtor is recorded in Cash receipts journal. The cash receipts journal is a special journal used to record cash received by a business.

✅ The correct answer is B.
Purchase of office equipment for cash will be recorded on Payments side of a cash book. All transactions in the cash book have two sides: debit and credit. All cash receipts are recorded on the left-hand side, and all cash payments are recorded by date on the right-hand side.