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 17 of 99
- A. Uncollected checks
- B. Uncredited checks
- C. Outstanding checks
- D. Bounced checks
Explanation: Checks issued by the business but not yet presented to the bank are outstanding checks.
Correct answer: Outstanding checks- A. Unpresented checks
- B. Uncredited checks
- C. Outstanding checks
- D. Bounced checks
Explanation: Checks deposited but not yet collected or credited by the bank are called uncollected or uncredited checks.
Correct answer: Uncredited checks- A. Credited in the cash book
- B. Debited in the cash book
- C. Entered in the bank statement
- D. Entered in the petty cash balance
Explanation: A standing order is a regular payment made automatically by the bank on the business’s instruction, so it reduces the bank balance and is…
Correct answer: Credited in the cash book- A. Uncollected checks
- B. Uncredited checks
- C. Outstanding checks
- D. Bounced checks
Explanation: An unpresented check has been issued but has not yet been presented to the bank for payment, so it remains an outstanding check.
Correct answer: Outstanding checks- A. Subtracted from bank balance
- B. Added to bank balance
- C. Added to Cash book balance
- D. Subtracted from cash book balance
Explanation: A deposit in transit has already been recorded in the cash book but is not yet included in the bank statement.
Correct answer: Added to bank balance- A. Cash receipt journal
- B. Cash payment journal
- C. Cash book
- D. Financial statements
Explanation: A bank reconciliation compares the balance and transactions shown by the bank statement with the business’s own cash book.
Correct answer: Cash book- A. Credit balance of cash book
- B. Debit balance of cash book
- C. Bank overdraft
- D. Adjusted balance of cash book
Explanation: A favorable cash book balance means the business has cash at bank rather than an overdraft.
Correct answer: Debit balance of cash book- A. Bank charges will be debited in cash book
- B. Bank charges will be added to cash book balance
- C. Bank charges will be credited in cash book
- D. Bank charges need no adjustment in cash book
Explanation: Bank charges are an expense and reduce the bank balance, so they are entered on the credit side of the cash book.
Correct answer: Bank charges will be credited in cash book- A. Accountant of the business
- B. Manager of the business
- C. Controller of the bank
- D. Accountant of the bank
Explanation: The business’s accountant prepares the bank reconciliation by comparing the cash book with the bank statement and explaining differences.
Correct answer: Accountant of the business- A. Bank can't verify your identity
- B. There are not sufficient funds in your account
- C. Check has been forged
- D. Check can't be cashed being illegal
Explanation: NSF means “not sufficient funds,” indicating that the account did not contain enough money to honor the check.
Correct answer: There are not sufficient funds in your account- A. Debit
- B. Credit
- C. Expenses
- D. Liability
Explanation: From the bank’s perspective, a deposit increases the amount it owes to the customer, so it is recorded as a credit in the bank statement.
Correct answer: Credit- A. Genuine trade reasons
- B. For mutual financial accommodation
- C. To help augment money supply
- D. All the three
Explanation: An accommodation bill is drawn and accepted without a genuine sale or purchase, mainly to provide mutual financial help or credit to the…
Correct answer: For mutual financial accommodation- A. 4-4-2013
- B. 3-4-2013
- C. 1-4-2013
- D. 31-3-2013
Explanation: Three calendar months from 1 January end on 1 April, and the usual three days of grace are added to a bill's maturity.
Correct answer: 4-4-2013- A. Acceptance
- B. Unconditional promise to pay
- C. Properly stamped
- D. Payment to be made legal currency
Explanation: A promissory note is made directly by the maker, so acceptance by a drawee is not required.
Correct answer: Acceptance- A. Triplicate
- B. Duplicate
- C. Single
- D. Quadruplicate
Explanation: A foreign bill is generally drawn in a set of three identical parts, called triplicate, to reduce the risk of loss in international…
Correct answer: Triplicate- A. Unconditional
- B. Certainty of amount
- C. In writing
- D. Amount to be paid in foreign currency
Explanation: A bill of exchange must be written, contain an unconditional order, and state a certain sum of money.
Correct answer: Amount to be paid in foreign currency- A. 1981
- B. 1881
- C. 1871
- D. 2001
Explanation: The Negotiable Instruments Act was enacted in 1881 and governs instruments such as bills of exchange, promissory notes, and cheques.
Correct answer: 1881- A. 4
- B. 2
- C. 3
- D. 5
Explanation: A bill of exchange generally involves three parties: the drawer who orders payment, the drawee who is directed to pay, and the payee who…
Correct answer: 3- A. It must be in writing
- B. It contains an unconditional promise to pay
- C. It is payable to the bearer
- D. It must be signed by the maker
Explanation: A promissory note contains the maker's written and signed unconditional promise to pay, but it is not ordinarily made payable to bearer.
Correct answer: It is payable to the bearer340. Under which of the following situations, is journal entry not passed in the books of the drawer?
- A. When a discounted bill is honoured by the drawee on the due date
- B. When a bill is sent to the bank for collection
- C. When a bill is renewed at the request of the drawee
- D. When a debtor accepts a bill drawn by the drawer
Explanation: When a discounted bill is honoured on the due date, the drawer's liability is discharged automatically through the bank, so no further…
Correct answer: When a discounted bill is honoured by the drawee on the due date