Accounting mcqs

✅ The correct answer is A.
Balance sheet financial statements show the financial health of an organisation at a stated point of time. A balance sheet is a financial statement that reports a company’s assets, liabilities and shareholders’ equity at a specific point in time, and provides a basis for computing rates of return and evaluating its capital structure.

✅ The correct answer is B.
Error which affect only one account can be Error of posting. An error in which amount is posted to the wrong side of the same account is known as error of posting. For example, goods sold to X wrongly credited to his account.

✅ The correct answer is D.
Different accounting policies can be adopted in the Valuation of inventories, Valuation of Investments and Calculation of depreciation.

✅ The correct answer is A.
Provision for bad debts is made as per the Conservatism concept. The conservatism principle is the general concept of recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received.

✅ The correct answer is C.
X draws a bill on Y. X endorsed the bill to Z. Z will be the payee of the bill.

✅ The correct answer is C.
Interest on drawings is gain for the business. Interest on drawings is an income to the firm, and hence it is credited to the profit and loss appropriation account. On the other hand, interest on drawings is an expense to the partners, and hence it is debited to their capital accounts.

✅ The correct answer is A.
A purchase book is a special purpose subsidiary book prepared by a business to record all credit purchases.

✅ The correct answer is B.
Partial omission of a transaction will affect the agreement of a trial balance. When only one aspect of a transaction is posted to the ledger, it is called as error of partial omission.

✅ The correct answer is A.
Joint venture account is a Nominal account.

✅ The correct answer is C.
Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation is termed as Provision. A provision is an account which records a present liability of an entity.