Accounting mcqs

✅ The correct answer is D.
The document inviting offers from public to subscribe for the debentures or shares of a body corporate is a Prospectus.

✅ The correct answer is D.
An employee dismissed from the job is not a transaction. A transaction is an agreement between a buyer and a seller to exchange goods, services or financial instruments.

✅ The correct answer is C.
Patents are fixed assets. The accounting process for patents is similar to other fixed assets. Companies allocate or amortize the costs over the life of the patent.

✅ The correct answer is B.
Heavy amount spent for the advertisement of new company product is Deferred Revenue expenditure. Deferred Revenue Expenditure is an expenditure which is revenue in nature and incurred during an accounting period, but its benefits are to be derived in multiple future accounting periods.

✅ The correct answer is D.
In case goods are manufactured and segregated for specified consumers, the best method for valuation of inventory would be Specific identification method. Specific identification inventory valuation method is a way of keeping track of all items in an inventory individually.

✅ The correct answer is D.
Credit sales will be shown on debit side of debtors account. Credit sales means allowances of goods to customers in order to pay in advance.

✅ The correct answer is D.
Merchandise on hand at either the beginning or end of the accounting period is called Inventory. Inventory is the array of finished goods or goods used in production held by a company. Inventory is classified as a current asset on a company’s balance sheet, and it serves as a buffer between manufacturing and order fulfillment.

✅ The correct answer is D.
Rent expenses does not appear in Balance sheet.

✅ The correct answer is C.
The installation expenses for a new machinery will be debited to Machinery A/c.

✅ The correct answer is B.
Posting is the next step to Journalizing in accounting cycle. 10 Steps of Accounting Cycle are; Analyzing and Classify Data about an Economic Event. Journalizing the transaction. Posting from the Journals to General Ledger. Preparing the Unadjusted Trial Balance. Recording Adjusting Entries. Preparing the Adjusted Trial Balance. Preparing Financial Statements.