Accounting mcqs

✅ The correct answer is A.
When the goods are returned to a supplier a Debit note is sent to him which indicates that his/her account has been debited with the repective amount.

✅ The correct answer is C.
Outstanding cheques are cheques that are issued by the business but not yet presented to bank for payment.

✅ The correct answer is D.
Del Credere Commission. It is a special commission given by the consignor to the consignee. When of commission is given, the consignee undertakes upon himself the risk of any .bad debts arising out of the credit So this Del Credere commission in the form of insurance premium against the risk of bed debts.

✅ The correct answer is B.
NRV or net realizable value of inventory is the expected selling price or market value less Expenses necessary to complete sale. Net realizable value is generally equal to the selling price of the inventory goods less the selling costs (completion and disposal).

✅ The correct answer is D.
The value of inventories or stock is figured out at the lower of cost and Net realizable value.

✅ The correct answer is B.
Favourable balance of cash book implies balance at Bank. The credit balance as per the cash book indicates bank overdraft.

✅ The correct answer is B.
A firm has not recorded the bad debts by mistake. Net profit would increase is the effect of bad debt ommission.

✅ The correct answer is D.
Capital expenditure does not reduce the profit of the concern. Capital expenditures refer to funds that are used by a company for the purchase, improvement, or maintenance of long-term assets to improve the efficiency or capacity of the company.

✅ The correct answer is C.
Petty cash is used for payment of Small expenses relating to postage’s and conveyance etc. Petty Cash is a current asset account; it is part of a company’s cash.

✅ The correct answer is A.
Commission to promote credit sale by consignee is known as Del credere commission. It is a special commission given by the consignor to the consignee.