Previous Year Solved Question Papers

Previous Year Solved Question Papers

MCQs on Financial Accounting - 21

1. Interest on drawings is

(a) expenditure for the business, 
(b) expense for the business,
(c) gain for the business 
(d) loss for the business



2. Goods given as samples should be credited to

(a) advertisement account, 
(b) sales account
(c) purchase account, 
(d) none of the above.



3. Outstanding salaries are shown as

(a) an expense, 
(b) a liability,
(c) an income, 
(d) an asset



4. Income tax paid by a sole proprietor on his business income should be

(a) debited to trading account,
(b) debited to profit and loss account,
(c) credited to profit and loss account
(d) deducted from the capital account in the balance sheet.



5. Capital is shown under liabilities because of the

(a) entity concept, 
(b) accrual concept,
(c) dual aspect concept, 
(d) going concern concept.



6. Which of the following is true

(a) Asset + equity = liabilities,
(b) asset - liability = owner’s fund,
(c) outside liability + reserve = equity,
(d) asset + reserve = equity.



7. Provision for bad debt is made to

(a) prevent debts arising
(b) obtain a debtor’s figure for the balance sheet
(c) even out actual bad debts incurring,
(d) encourage prompt payment of debts by debtors.



8. The provision for bad debts account represents

(a) Some of the profit
(b) some of the credit withheld
(c) the total of actual bad debts,
(d) the total amount owing to the business



9. Which of the following is not a fixed asset

(a) motor vehicles, 
(b) furniture,
(c) inventory, 
(d) freehold property



10. Which of the following is a current liability

(a) five year bank loan 
(b) workmen compensation fund,
(c) bank overdraft, 
(d) dividend equalisation reserve.




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