Accounting mcqs

✅ 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.

✅ The correct answer is A.
Contra-entries are passed only when Double column cash book is prepared. The reason for making two entries is to comply with the principle of double entry.

✅ 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.

✅ 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.

✅ 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.

✅ The correct answer is A.
The accounting equation is based on Dual aspect. The accounting equation is made visible in the balance sheet, where the total amount of assets listed must equal the total of all liabilities and equity.

✅ The correct answer is C.
Discounting of bill by the drawer is done with Bank. An accepted draft or bill of exchange sold for early payment to a bank or credit institution at less than face value after the bank deducts fees and applicable interest charges.

✅ The correct answer is C.
Preceding working day the bill will mature if the date of maturity of a bill is a holiday, where the date of maturity is a public holiday, the instrument will become due on the preceding business day.

✅ The correct answer is C.
Debentures is a long term liability. Long-term liabilities are financial obligations of a company that become due more than one year. In accounting, they form a section of the balance sheet that lists liabilities not due within the next 12 months including debentures, loans, deferred tax liabilities and pension obligations.

✅ The correct answer is D.
Stock take is not the methods of inventory costing. Stock-taking or “inventory checking” or “wall-to-wall” is the physical verification of the quantities and condition of items held in an inventory or warehouse. This may be done to provide an audit of existing stock. It is also the source of stock discrepancy information.