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 27 of 99
- A. Purchase journal
- B. Sales journal
- C. Purchases return journal
- D. Sales return journal
Explanation: Goods returned by the business are goods returned to its supplier, so they are entered in the purchases return journal.
Correct answer: Purchases return journal- A. Specialized journal
- B. Day book
- C. Cash book
- D. Record book
Explanation: A journal is also called a day book because transactions are entered in it in chronological order as they occur.
Correct answer: Day book- A. Cash payments journal
- B. Cash receipts journal
- C. Purchases return journal
- D. General journal
Explanation: The general journal records transactions that do not fit a specialised journal, such as adjusting entries, opening entries, and asset…
Correct answer: General journal- A. Purchase journal
- B. Sales journal
- C. Purchases return journal
- D. Sales return journal
Explanation: The sales journal records credit sales of goods for resale. Cash sales go to the cash book, while sales returns are recorded separately in…
Correct answer: Sales journal- A. Purchase journal
- B. Sales journal
- C. Purchases return journal
- D. Sales return journal
Explanation: Goods returned by customers are sales returns, so they are recorded in the sales return journal.
Correct answer: Sales return journal526. Which of the following account with normal balance is shown at the credit side of a trial balance?
- A. Cash account
- B. Bank account
- C. Equipment account
- D. Accrued expenses accountAccounting & Auditing
Explanation: Accrued expenses are liabilities because they represent amounts owed but not yet paid, and liabilities normally have credit balances.
Correct answer: Accrued expenses accountAccounting & Auditing527. Which of the following account with normal balance is shown at the debit side of a trial balance?
- A. Rent income account
- B. Creditors account
- C. Unearned income account
- D. Cash account
Explanation: Cash is an asset, and assets normally carry debit balances in the trial balance.
Correct answer: Cash account- A. Arithmetic accuracy
- B. Errors of commission
- C. Omissions of economic events
- D. Understatements of balances
Explanation: Equal debit and credit totals test the arithmetic accuracy of ledger balancing and posting.
Correct answer: Arithmetic accuracy- A. Complete omission of a transaction
- B. Partial omission of a transaction
- C. Error of principle
- D. Compensating errors
Explanation: A partial omission records only one side of a transaction, so debit and credit totals will differ and the trial balance will disagree.
Correct answer: Partial omission of a transaction- A. Frequently during the year
- B. At the end of an accounting period
- C. At the end of a month
- D. At the end of a yearAccounting & Auditing
Explanation: A trial balance is commonly prepared at the end of an accounting period to verify that ledger debit and credit balances agree before…
Correct answer: At the end of an accounting period- A. No error in recording transactions
- B. No error in posting entries to ledger accounts
- C. Account balances are correct
- D. Mathematically Capital+Liabilities=Assets
Explanation: Equal debit and credit totals show the mathematical equality underlying the accounting equation: Assets equal Capital plus Liabilities.
Correct answer: Mathematically Capital+Liabilities=Assets- A. It lists down the balances of accounts
- B. It lists down the balances of a balance sheet
- C. It is a kind of financial statement
- D. It is not a part of accounting cycle
Explanation: A trial balance lists the debit and credit balances of ledger accounts on a particular date.
Correct answer: It lists down the balances of accounts- A. Ledger accounts
- B. General Journal
- C. Specialized journals
- D. Balance sheet
Explanation: The trial balance is prepared from the closing balances of ledger accounts, which provide its debit and credit columns.
Correct answer: Ledger accounts- A. Yes
- B. No
- C. Transactions can't be omitted
- D. none of these
Explanation: A completely omitted transaction leaves both its debit and credit sides unrecorded, so the trial balance totals remain equal.
Correct answer: No- A. Ledger accounts balances
- B. Balance sheet balances
- C. Income statement balances
- D. Cash flow statement balances
Explanation: A trial balance lists the debit and credit balances extracted from ledger accounts, so it checks their arithmetical agreement.
Correct answer: Ledger accounts balances- A. 1949
- B. 1956
- C. 1961
- D. 1972
Explanation: The Institute of Chartered Accountants of Pakistan was established under the Chartered Accountants Ordinance, 1961.
Correct answer: 1961- A. Error of principle
- B. Error of commission
- C. Error of omission
- D. Error of duplication
Explanation: Goods sent on approval remain the seller’s inventory until the customer approves them, so treating them as credit sales applies the wrong…
Correct answer: Error of principle- A. Error of omission
- B. Error of commission
- C. Compensating error
- D. Error of principle
Explanation: The transaction was recorded in the correct type of account but in the wrong customer’s account, A being replaced by B.
Correct answer: Error of commission- A. Two
- B. Three
- C. Five
- D. Six
Explanation: The two traditional systems are single-entry and double-entry bookkeeping.
Correct answer: Two- A. External liabilities
- B. Fixed liabilities
- C. Current liabilities
- D. Liquid Liabilities
Explanation: Amounts payable within the normal short-term operating period, such as within a month, are current liabilities.
Correct answer: Current liabilities