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 85 of 99
- A. Debit bank and credit rent expense
- B. Debit rent expense and credit bank
- C. Debit rent expense and credit sales
- D. Debit drawings and credit bank
Explanation: Rent is an expense, so it is debited, and the bank balance has decreased, so bank is credited.
Correct answer: Debit rent expense and credit bank- A. Add Rs. 3,600 to the cash book
- B. Subtract Rs. 3,600 from the cash book
- C. Add Rs. 4,800 to the bank statement
- D. Subtract Rs. 8,400 from the bank statement
Explanation: The receipt is understated in the cash book by Rs. 3,600, calculated as Rs. 8,400 minus Rs. 4,800.
Correct answer: Add Rs. 3,600 to the cash book- A. Debit sales ledger control and credit purchases ledger control
- B. Debit purchases ledger control and credit sales ledger control
- C. Debit both control accounts
- D. Credit both control accounts
Explanation: The set-off reduces both the receivable and the payable. Therefore, the sales ledger control account is credited and the purchases ledger…
Correct answer: Debit purchases ledger control and credit sales ledger control- A. Debit side
- B. Credit side
- C. Both sides equally
- D. It is excluded from the control account
Explanation: Writing off a bad debt reduces the amount due from customers, so it is credited to the sales ledger control account.
Correct answer: Credit side- A. Purchases day book
- B. Sales day book
- C. Cash book
- D. General journal
Explanation: Credit sales are first recorded in the sales day book, and its total is posted to the sales ledger control account.
Correct answer: Sales day book- A. No error exists anywhere in the sales ledger
- B. Only that the two recorded totals agree arithmetically
- C. The bank reconciliation is automatically complete
- D. The individual customer accounts are no longer required
Explanation: Agreement confirms that the two recorded totals are arithmetically consistent, but it does not prove that every transaction was recorded…
Correct answer: Only that the two recorded totals agree arithmetically- A. Debit the bank column of the cash book
- B. Credit the bank column of the cash book
- C. Debit the bank reconciliation statement
- D. Credit the bank reconciliation statement
Explanation: Bank interest increases the business's bank balance, so the bank column of the cash book is debited.
Correct answer: Debit the bank column of the cash book- A. The recorded balance is understated by Rs. 3,000
- B. The recorded balance is overstated by Rs. 3,000
- C. The bank statement balance is understated by Rs. 3,000
- D. The bank statement balance is overstated by Rs. 3,000
Explanation: An overcast means the total has been added by too much, so the cash book bank balance is higher than it should be by Rs. 3,000.
Correct answer: The recorded balance is overstated by Rs. 3,000- A. A cheque issued but not yet presented
- B. A deposit recorded but not yet credited
- C. A bank service charge omitted from the cash book
- D. An error made by the bank in its statement
Explanation: Bank service charges are known from the bank statement but are initially missing from the cash book, so they are entered in the adjusted…
Correct answer: A bank service charge omitted from the cash book- A. Rs. 27,000 favourable
- B. Rs. 39,000 favourable
- C. Rs. 45,000 favourable
- D. Rs. 57,000 favourable
Explanation: Starting with the bank statement balance, add unpresented cheques and subtract deposits not yet credited: Rs. 42,000 + Rs. 6,000 - Rs.
Correct answer: Rs. 39,000 favourable- A. A standing order already entered in the cash book
- B. A bank charge already entered in the cash book
- C. A cheque issued but not yet presented
- D. A direct receipt already entered in the cash book
Explanation: An issued cheque not yet presented creates a timing difference between the cash book and bank statement.
Correct answer: A cheque issued but not yet presented- A. Discount allowed to customers
- B. Returns inward from customers
- C. Interest charged to customers
- D. Bad debts written off
Explanation: Interest charged to customers increases the amount receivable and is therefore debited to the sales ledger control account.
Correct answer: Interest charged to customers- A. Rs. 68,000 credit
- B. Rs. 80,000 credit
- C. Rs. 92,000 credit
- D. Rs. 104,000 credit
Explanation: The closing payable is Rs. 60,000 + Rs. 220,000 - Rs. 180,000 - Rs. 12,000 - Rs. 8,000 = Rs. 80,000.
Correct answer: Rs. 80,000 credit- A. The sales day book
- B. The purchases day book
- C. The cash book
- D. The journal proper
Explanation: The purchases day book records credit purchases of goods, and its total is posted to the debit side of the purchases ledger control…
Correct answer: The purchases day book- A. It removes the need for source documents
- B. It provides an independent check on ledger records
- C. It guarantees that no accounting error occurs
- D. It records only cash transactions in detail
Explanation: The control account total can be compared with the total of the individual subsidiary ledger balances, helping to identify errors or…
Correct answer: It provides an independent check on ledger records1696. A sales ledger control account has a debit balance. What does this balance normally represent?
- A. The amount owed by customers
- B. The amount owed to suppliers
- C. The total cash held by the business
- D. The total value of goods returned
Explanation: A debit balance in the sales ledger control account normally represents trade receivables, meaning amounts owed by customers.
Correct answer: The amount owed by customers- A. Rs. 27,800 favourable
- B. Rs. 30,800 favourable
- C. Rs. 32,800 favourable
- D. Rs. 37,300 favourable
Explanation: The adjusted cash book balance is Rs. 34,300 after adding the direct credit and deducting bank charges. The bank statement balance is Rs.
Correct answer: Rs. 30,800 favourable- A. Increase the cash book balance by the cheque amount
- B. Reduce the cash book balance by the cheque amount
- C. Increase the bank statement balance by the cheque amount
- D. Record the cheque as a deposit in transit
Explanation: The duplicate entry has reduced the cash book balance twice, although the bank has reduced it only once.
Correct answer: Reduce the cash book balance by the cheque amount- A. An amount owed by the business to suppliers
- B. An amount owed by suppliers to the business
- C. The total value of credit purchases
- D. The total value of payments made to suppliers
Explanation: Suppliers' accounts normally have credit balances because the business owes them money.
Correct answer: An amount owed by suppliers to the business- A. Credit sales to customers
- B. Cash sales made by the business
- C. Receipts from credit customers
- D. Bad debts written off
Explanation: The sales ledger control account summarises transactions with credit customers whose individual accounts are kept in the sales ledger.
Correct answer: Cash sales made by the business