Accounting mcqs

✅ The correct answer is A.
Memorandum of association is the most important document of the company. It is the charter of the company, which defines the objects of the company’s formation and the utmost possible scope of its operations beyond which its actions cannot go.

✅ The correct answer is A.
Accounts payable has Credit balance. Since Accounts Payable is a liability account, it should have a credit balance.

✅ The correct answer is B.
Office equipment’s account is classified as Real account.

✅ The correct answer is A.
Trial balance It lists down the balances of accounts. The debit balance values will be listed in the debit column of the trial balance and the credit value balance will be listed in the credit column.

✅ The correct answer is C.
Postdated cheques are considered as Accounts receivable. If the postdated check was received as payment on accounts receivable, the accounts receivable balance is not reduced until the date of the check.

✅ The correct answer is B.
Net profit is computed in Income statement. Net income, also called net profit, is a calculation that measures the amount of total revenues that exceed total expenses. It other words, it shows how much revenues are left over after all expenses have been paid.

✅ The correct answer is B.
Credit is nature of Capital account. Asset accounts normally have debit balances, while liabilities and capital normally have credit balances.

✅ The correct answer is C.
A minimum quantity of stock always held as precaution against out of stock situation is called Base stock.

✅ The correct answer is B.
Two Column Cash Books – In this discounts is also recorded with cash transactions. So both discounts received and the discount that is given is recorded here. If any organization is in a general practice of giving or receiving discounts this is the preferable option.

✅ The correct answer is A.
Debt equity ratio is a leverage ratio. The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of shareholders’ equity and debt used to finance a company’s assets. Closely related to leveraging, the ratio is also known as risk, gearing or leverage.