All Free Accounting MCQs with Answers
Every Accounting question in the bank, across all chapters, each with the correct answer and a written explanation. Free and unlimited, with no account needed.
1,971 questions · page 15 of 99
- A. manager ship
- B. controllership
- C. proprietorship
- D. functional lineGet Executive Coaching
Explanation: Controllership provides financial information and oversees accounting systems, records, reporting, and internal control.
Correct answer: controllership- A. chief financial officer
- B. chief manager
- C. chief line function
- D. chief staff functionCompare Credit Cards
Explanation: The chief financial officer is the senior officer responsible for an organization’s financial operations, including finance, reporting…
Correct answer: chief financial officer- A. external accounting
- B. internal accounting
- C. business accounting
- D. financial accounting
Explanation: Financial accounting records business transactions and prepares reports under generally accepted accounting principles for users such as…
Correct answer: financial accounting- A. cost accounting
- B. decision accounting
- C. financial accounting
- D. management accounting
Explanation: Financial accounting produces general-purpose reports for external users, including shareholders, lenders and government agencies.
Correct answer: financial accounting- A. organization
- B. alternation
- C. planning
- D. valuing
Explanation: Planning involves setting organizational goals, forecasting alternatives, and communicating the chosen objectives.
Correct answer: planning- A. asset function
- B. investment function
- C. line function
- D. staff function
Explanation: A management accountant usually advises and supports managers rather than directly commanding operating activities, so the role is a staff…
Correct answer: staff function- A. benefit approach
- B. cost approach
- C. cost-benefit approach
- D. accounting approachHire An Accountant
Explanation: A cost-benefit approach compares the expected benefits of an accounting system or decision with its expected costs, and is acceptable when…
Correct answer: cost-benefit approach288. In an accounting system, the document which supports journal entries is classified as _____________?
- A. cost document
- B. priced document
- C. source document
- D. direct document
Explanation: A source document provides the original evidence for a transaction, such as an invoice, receipt, or voucher, and supports the related…
Correct answer: source document- A. lead value of money
- B. storage value of money
- C. time value of money
- D. cash value of money
Explanation: The time value of money means a sum available today is worth more than the same sum received later because today’s money can earn a…
Correct answer: time value of money- A. 27.28%
- B. 25.28%
- C. 22.28
- D. 21.28
Explanation: The nominal rate combines the real rate and inflation: (1.16 × 1.08) − 1 = 25.28%.
Correct answer: 25.28%- A. real rate of return
- B. required rate of return
- C. nominal rate of return
- D. none of above
Explanation: The real rate of return excludes the effect of inflation and reflects the underlying return required for the investment’s risk and use of…
Correct answer: real rate of return- A. net investment parity
- B. inflation
- C. purchasing parity
- D. buying parity
Explanation: Inflation is a general rise in prices that reduces the purchasing power of money.
Correct answer: inflation- A. company structure
- B. organization structure
- C. line of authority
- D. line of responsibility
Explanation: An organization structure sets out authority, reporting relationships, and lines of responsibility within a company.
Correct answer: organization structure- A. Sinking Fund Method
- B. Annuity Method
- C. Sum of Year Digits Method
- D. None of these
Explanation: Under the depreciation fund method, equal annual amounts are invested to accumulate funds for replacing the asset, so it is also called…
Correct answer: Sinking Fund Method- A. Amortization
- B. Loan Payment
- C. Liability
- D. Securitization
Explanation: Amortization is the systematic repayment of a loan through regular installments containing both interest and principal.
Correct answer: Amortization- A. I
- B. T
- C. H
- D. None
Explanation: An account is commonly illustrated as a capital T, with the account title at the top and debit and credit sides on the left and right.
Correct answer: T- A. Petty cash
- B. Cash book
- C. Cash receipt
- D. Discount
Explanation: The petty cash system is the most common imprest system because a fixed amount is advanced for small expenses and restored periodically to…
Correct answer: Petty cash- A. Cash book
- B. Two columns cash book
- C. Three columns cash book
- D. Petty cash book
Explanation: A cash book containing cash, bank and discount columns has three principal columns, so it is called a three-column cash book.
Correct answer: Three columns cash book- A. Receipts
- B. Payments
- C. Incomes
- D. Expenditures
Explanation: Capital introduced by the owner increases the business's cash, so it is entered on the receipts side of the cash book.
Correct answer: Receipts- A. Lump sum
- B. Prompt
- C. Actual
- D. None of them
Explanation: Cash discount is offered to encourage prompt repayment of a debt, usually within a specified credit period.
Correct answer: Prompt