Accounting mcqs

✅ The correct answer is D.
Opening inventory + Net purchases = Cost of goods available for sale.
The cost of goods available for sale equals the beginning value of inventory plus the cost of goods purchased.

✅ The correct answer is C.
A company’s merchandise, raw materials, finished and unfinished products which have not yet been sold is known as Inventory.

✅ The correct answer is C.
Interest on debentures is calculated on Face value of debentures. This interest amount is paid periodically, generally yearly or half-yearly. The interest is a charge against the profit of the company.

✅ The correct answer is C.
In the calculation of depreciation, all of the following items are actually estimates except Historical cost. A historical cost is a measure of value used in accounting in which the price of an asset on the balance sheet is based on its nominal or original cost when acquired by the company.

✅ The correct answer is C.
Bills receivable is a Current asset. Bills receivable is often used as an alternative term for accounts receivable but more specifically relates to amounts due to a business under bills of exchange.

✅ The correct answer is D.
A proforma invoice is sent by Consignor to consignee. A Pro-forma invoice is a document prepared by the consignor which is sent to the consignee along with the goods. It contains the details with respect to the quantity of goods sent, rates at which the goods are sent and other terms and conditions for sending the goods on consignment.

✅ The correct answer is B.
General Journal is used to record financial transactions in chronological (day-to-day) order.

✅ The correct answer is A.
Difference of total of debit and credit side of the trial balance is transferred to Suspense A/c. Suspense accounts are used when your trial balance is out of balance or when you have an unidentified transaction. The suspense account is a general ledger account that acts as a holding account until the error is discovered or the unknown transaction is identified.

✅ The correct answer is C.
Ledger account is known as the base for preparing trial balance. The trial balance can then be prepared by listing each closing balance from the general ledger accounts as either a debit or a credit balance.

✅ The correct answer is A.
A decrease in value of a fixed asset due to age, wear and tear is known as Depreciation. Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account for declines in value. Businesses depreciate long-term assets for both tax and accounting purposes.