R4RIN – MCQs, Mock Tests | CSS[FPSC-U.S. Civil Service Commission]-USA [USA] CURRENT AFFAIRS MCQ ACCOUNTS

Which of the following is part of the double entry system in Accounting?

1. Cash book
2. General journal
3. Sales journal
4. Trial balance

✅ Correct Answer: 1

In which of the following book returns inwards are recorded?

1. Sales returns book
2. Purchase returns book
3. Cash receipts book
4. Cash payment book

✅ Correct Answer: 1

What is the net amount of cash paid to the supplier if: Credit purchases $12,000 out of which $2,000 were rejected and subsequently returned to the supplier. Supplier allowed a discount of 1% on settlement of amount.

1. $10,000
2. $12,000
3. $9,900
4. $11,880

✅ Correct Answer: 3

The main source(s) of Generally Accepted Accounting Principles (GAAP) is/are:

1. Company Law
2. Accounting standards
3. Both A and B
4. None of these

✅ Correct Answer: 3

What standards are used to prepare financial statements by most of the countries and companies

1. International Financial Reporting Standards
2. International Financial Accounting Standards
3. International Accounting & Auditing Standards
4. International Risk Reporting Standards

✅ Correct Answer: 1

The correct form of Accounting equation is

1. Assets + Liabilities = Equity
2. Assets - Liabilities = Equity
3. Assets - Receivable = Equity
4. Assets + Receivable = Equity

✅ Correct Answer: 2

A company sold goods worth $5,000 on 5 June and $10,000 on 28 June. The company received the first payment on 25 June and second on 7 July. The company prepared the financial statement on 30 June. What would be the total sale on the financial statement?

1. $0
2. $5,000
3. $10,000
4. $15,000

✅ Correct Answer: 4

Advance payments are recognized as

1. receivable
2. payable
3. bad debt
4. none of these

✅ Correct Answer: 1

What from the following is NOT a current asset?

1. Patent rights
2. Inventory
3. Cash
4. Trade receivables

✅ Correct Answer: 1

What from the following is NOT a non-current asset?

1. Capital
2. Property
3. Patent rights
4. Inventory

✅ Correct Answer: 4

A machine price was $1,000 and was carried through a truck. The trucks fares were $500. The engineers charged $500 for the installation. The cost of the machine is?

1. $1,000
2. $1,500
3. $2,000
4. $2,500

✅ Correct Answer: 3

Depreciable amount =

1. Cost of an asset + Residual value
2. Cost of an asset - Residual value
3. Residual value - Cost of an asset
4. None of these

✅ Correct Answer: 2

The accounting process of allocation cost of intangible assets is called

1. Amortization
2. Depletion
3. Going Concern
4. Residual Value

✅ Correct Answer: 1

The process of recording consumption of natural resources (or wasting assets) is called

1. Amortization
2. Depletion
3. Going Concern
4. Residual Value

✅ Correct Answer: 2

The concept that the enterprise will continue in a foreseeable future is known as

1. Amortization
2. Depletion
3. Going Concern
4. Residual Value

✅ Correct Answer: 3

What from the following is NOT a capital expense?

1. Purchase of property
2. Purchase of office equipment
3. Replacement of a vehicle,
4. Repair of a vehicle

✅ Correct Answer: 4

An item of equipment cost $300,000 and has a residual value of $50,000 at the end of its expected useful life of four years. What is the depreciable amount?

1. $50,000
2. $250,000
3. $300,000
4. $350,000

✅ Correct Answer: 2

The expected disposal value of the asset (after deducting disposal costs) at the end of its expected useful life is called

1. residual value
2. net book value
3. depreciation
4. substance over form

✅ Correct Answer: 1

The figure that appears in the statement of financial position, after the depreciation, is known as

1. depreciation
2. substance over form
3. residual value
4. net book value

✅ Correct Answer: 4

Depreciation is normally charged as

1. payable
2. receivable
3. expenses
4. advances

✅ Correct Answer: 3

A company purchases a non-current asset in Year 1 for $90,000. The depreciation charge is $15,000. What net book value would be recorded in financial position statement (or balance sheet) at the end of Year-2?

1. $75,000
2. $60,000
3. $30,000
4. $15,000

✅ Correct Answer: 2

Raw materials that are remaining at the end of the reporting period are treated as

1. liabilities
2. expenses
3. fixed assets
4. current assets

✅ Correct Answer: 4

The goods that have been sold to the customers are treated as _____ in the financial statements.

1. inventories
2. expenses
3. income
4. debt

✅ Correct Answer: 2

The goods that have not been sold to the customers till the end of the reporting period are considered as

1. inventories
2. expenses
3. sales
4. purchases

✅ Correct Answer: 1

The selling price of some goods is $1500 and cost to sell the goods is $200. What is the Net Realizable Value (NRV)?

1. $1000
2. $1200
3. $1300
4. $1500

✅ Correct Answer: 3

The selling price of some under-process goods is $1500, cost to finally produce the goods is $300, and cost to sell the goods is $200. What is the Net Realizable Value (NRV)?

1. $1000
2. $1200
3. $1300
4. $1500

✅ Correct Answer: 1

A bank overdraft is shown as a/an _____ balance in the bank statement.

1. debit
2. credit
3. credit - debit
4. none of these

✅ Correct Answer: 1

Which from the following is included in the cost of purchases?

1. Abnormal loss
2. Freight in
3. Rent of store
4. Administrative Salaries

✅ Correct Answer: 2

Cheques issued but not presented, cause the bank statement balance to be ________ the cash book balance.

1. greater than
2. less than
3. equal to
4. the two statements are irrelevant

✅ Correct Answer: 1

The capital of a business is $100,000 and the liabilities are $40,000. What are the total assets?

1. $40,000
2. $60,000
3. $100,000
4. $140,000

✅ Correct Answer: 4

Any transaction which cannot be recorded in any book of prime entry is recorded in

1. Cash book
2. Petty cash book
3. General journal
4. Day books

✅ Correct Answer: 3

The withdrawal of inventory by the owner for personal use should appear in the trading account as a deduction from

1. sales
2. purchases
3. overdrafts
4. none of these

✅ Correct Answer: 2

A company had opening inventory of $200,000. Sales and purchases during the period were of $400,000 and $80,000 respectively. What is the gross profit for the period if the closing inventory was worth $100,000?

1. $20,000
2. $120,000
3. $220,000
4. $320,000

✅ Correct Answer: 3

Which from the following costs are included in conversion costs?

1. Carriage in
2. Carriage outwards
3. Commission of selling staff
4. Supervisors wages

✅ Correct Answer: 4

Goods which originally cost $800 were sold for $1,000. In the accounting equation Net Assets will?

1. Rise by $1,000
2. Rise by $200
3. Fall by $1,000
4. Fall by $200

✅ Correct Answer: 2

A debit entry usually represents

1. Assets and Expenses
2. Assets and Income
3. Liabilities and Income
4. Liabilities and Expenses

✅ Correct Answer: 1

The capital of a business would change as a result of:

1. Raw material being purchased on credit
2. Non-current assets being purchased on credit
3. A supplier being paid by cheque
4. Wages being paid in cash

✅ Correct Answer: 4

Which of the following is an indirect cost?

1. carriage inwards
2. production wages
3. production materials
4. factory rent

✅ Correct Answer: 4

There is a debit balance on the office expenses at the end of the financial year. In which section of the balance sheet this will be recorded?

1. capital
2. current assets
3. current liabilities
4. fixed assets

✅ Correct Answer: 2

Which of the following is not a business transaction?

1. Purchasing office supplies
2. Hiring a new employee
3. Paying interest on a business loan
4. Receiving fees for services

✅ Correct Answer: 2

A company is owned by its

1. directors
2. employees
3. shareholders
4. managers

✅ Correct Answer: 3

The goods which are purchased for the purpose of resale are known as

1. inventory
2. merchandise
3. purchases
4. traded goods

✅ Correct Answer: 1

Cash invested in the business is known as

1. current asset
2. fixed asset
3. liabilities
4. capital

✅ Correct Answer: 4

Expenditures which provide benefit in the future period are known as

1. Revenue expenditure
2. Outstanding expenditure
3. Current expenditure
4. Capital expenditure

✅ Correct Answer: 4

Which of the following is a capital transaction?

1. Purchase of goods
2. Payment of wages
3. Sale of goods
4. Purchase of machinery

✅ Correct Answer: 4

Financial statements are mainly prepared for

1. Directors
2. Shareholders
3. Employees
4. Managers

✅ Correct Answer: 2

Interim audit is performed before the end of the accounting period, normally by the

1. junior staff
2. senior staff
3. whole audit team
4. board of directors

✅ Correct Answer: 2

Fundamentally, the auditor report gives an opinion on whether the financial statements

1. are in accordance with the national standards
2. are in accordance with the international standards
3. have errors, mistakes, or fraud
4. present fairly the position and results of an entity

✅ Correct Answer: 4

The _____ certify or guarantee that the financial statements are correct.

1. management
2. board of governors
3. auditor
4. auditor does not

✅ Correct Answer: 4

IFAC is an abbreviation for

1. International Federation of Accountants
2. International Federation of Auditors
3. International Framework for Accounting Concepts
4. International Framework for Auditing Concepts

✅ Correct Answer: 1