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 23 of 99
- A. Assets column
- B. Date column
- C. Description column
- D. Amount column
Explanation: A standard journal normally contains date, particulars or description, ledger folio, and debit and credit amounts.
Correct answer: Assets column- A. Book of entries
- B. Book of original entries
- C. T account
- D. Books of economic event
Explanation: The journal is called the book of original entry because transactions are first recorded there before being posted to the ledger.
Correct answer: Book of original entries- A. Drawings
- B. Cash
- C. Business
- D. Stock
Explanation: Personal withdrawals are recorded by debiting Drawings, which reduces the owner's equity, and crediting Cash because cash leaves the…
Correct answer: Drawings- A. Cash
- B. Debtor
- C. Creditor
- D. Purchases
Explanation: A credit purchase increases purchases, so Purchases is debited, while the supplier or creditor is credited.
Correct answer: Purchases- A. Source documents
- B. Ledger
- C. Bonds
- D. Journals
Explanation: Source documents, such as invoices, receipts, and vouchers, provide evidence that a transaction occurred and support its journal entry.
Correct answer: Source documents- A. Expense of business
- B. Income of business
- C. Loss of business
- D. Abnormal loss of business
Explanation: Discount allowed is the reduction granted to a customer for prompt payment, so it is treated as an expense or financial loss of the…
Correct answer: Expense of business- A. Sales income account
- B. Sales account
- C. Return inward account
- D. Expenses account
Explanation: Goods returned by customers are sales returns, also called returns inward, and this account is debited because it reduces sales revenue.
Correct answer: Return inward account- A. 2,10
- B. 10,2
- C. 10,30
- D. 3,15
Explanation: The notation 2/10-n/30 means a 2% discount is allowed when payment is made within 10 days; otherwise the full amount is due within 30…
Correct answer: 2,10449. A journal entry in which two or more account is debited or credited is referred as____________?
- A. Journal entry
- B. Multi entry
- C. Additional entry
- D. Compound entry
Explanation: A compound entry involves two or more accounts on the debit side, the credit side, or both.
Correct answer: Compound entry- A. Ledger
- B. T account
- C. Day book
- D. Cash book
Explanation: The journal is also called the day book because transactions are recorded in it in chronological order as they occur.
Correct answer: Day book- A. Account payable
- B. Account receivable
- C. Cash account
- D. Discount accountAccounting & Auditing
Explanation: Discount allowed is given to a customer, so it reduces the amount receivable from that customer.
Correct answer: Account receivable- A. One
- B. Two
- C. Three
- D. Infinite
Explanation: The double-entry system requires every transaction to have equal debit and credit effects.
Correct answer: Two- A. Posting
- B. Entry making
- C. Adjusting
- D. Journalizing
Explanation: Journalizing means recording transactions in the appropriate journals in chronological order.
Correct answer: Journalizing- A. First
- B. Original
- C. Secondary
- D. Generic
Explanation: The general journal is a book of original entry because transactions are first recorded there before being posted to the ledger.
Correct answer: Original- A. Two times a year
- B. once a year
- C. Frequently during the accounting period
- D. At the end of a accounting periodAccounting & Auditing
Explanation: Transactions are recorded as they occur throughout the accounting period so that the records remain current and complete.
Correct answer: Frequently during the accounting period- A. Cash
- B. Equity
- C. Net income
- D. Net expenses
Explanation: The accounting equation is Assets = Liabilities + Equity, so rearranging it gives Assets − Liabilities = Equity.
Correct answer: Equity- A. Business operations
- B. cash outflows
- C. Inflows of cash
- D. Appropriation expenses
Explanation: An increase in equity normally provides additional resources to the business, allowing it to expand its operations.
Correct answer: Business operations- A. Increase cash and liability
- B. Increase equity and liability
- C. Increase fixed assets and cash
- D. Increase cash and equity
Explanation: When services are already rendered, the receipt is revenue, so cash increases and equity increases through profit.
Correct answer: Increase cash and equity- A. Assets and liabilities
- B. Assets and equity
- C. Liabilities and equity and bank balance
- D. Capital and liabilities
Explanation: Fresh capital is an owner contribution, which increases the business's assets and owner's equity by equal amounts.
Correct answer: Assets and equity- A. Cash+Other assets=Capital-Liabilities
- B. Capital+ Liabilities=Assets+Income
- C. Assets-Liabilities=Capital
- D. Assets+Capital=Liabilities
Explanation: Rearranging the basic equation Assets = Liabilities + Capital gives Assets − Liabilities = Capital.
Correct answer: Assets-Liabilities=Capital