MCQs on Financial Accounting - 4

1. Amount spent to put second hand machinery in working condition is

(a) Revenue expenditure
(b) Deferred revenue expenditure
(c) Capital expenditure
(d) None of the above

2. A liability which arises only on the happening of an uncertain event

(a) Current liability
(b) Non liability
(c) Long term liability
(d) Contingent liability

3. Expenses which remains unpaid at the end of the accounting period

(a) Outstanding expenses
(b) Reserve
(c) prepaid expenses
(d) Recoverable expenses

4. A customer's cheque returned dishonored is recorded in
(a) Purchase return book
(b) Cash book
(c) Journal
(d) Sales return book

5. depreciation of an asset of Rs.40,000 at the rate of 10% per annum at the end of third year is -------- on using reducing balance method

(a) 2000
(b) 3600
(c) 3240
(d) 4000

6. The information for the preparation of receipts and payment account is taken from

(a) Income and expenditure account
(b) Balance sheet
(c) Cash book
(d) Cash book and balance sheet

7. In journal, transactions are recorded on

(a) Ascending order
(b) Descending order
(c) Order of preference
(d) Chronological order

8. Drawing account is

(a) Personal account
(b) Nominal account
(c) Real account
(d) None of the above

9. A bill of exchange when drawn requires

(a) Noting
(b) Acceptance
(c) Discounting
(d) Endorsing

10. X of Mumbai drawn a bill on Y of Delhi payable at USA is

(a) Foreign bill
(b) Clean bill
(c) Inland bill
(d) Accommodation bill



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