Commerce MCQ Questions and Answers

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Q31
Which of the following is affected by treatment of an accrued item in accounting ?
  • A Profit and Loss A/c only
  • B Profit and Loss Appropriation A/c
  • C Balance Sheet only
  • D Profit and Loss A/c and Balance Sheet
Answer: Option D
Q32
33. Income and expenses for the year 2006 are- Fee Received in Cash - Rs.24,000 Accrued Fee - Rs.6,000 Rent for Chamber Paid - Rs.6,000 Outstanding Rent - Rs.2,000 Salary Paid to Staff - Rs.6,000 Miscellaneous Expenses Paid - Rs.200 Salary paid in advance to staff included in the above : Rs. 1,000. What is the income under accrual basis ?
  • A Rs. 11,800
  • B Rs. 13,200
  • C Rs. 16,800
  • D Rs. 30,000
Answer: Option B
Q33
If Opening Stock - Rs.15,000 Purchases - Rs.37,500 Direct Expenses - Rs.1,500 Closing Stock - Rs.7,500 Operating Expenses - Rs.3,000 Sales are Rs. 60,000 during the year, what is the net profit ?
  • A Rs. 12,000
  • B Rs. 10,500
  • C Rs. 7,500
  • D Rs. 3,000
Answer: Option B
Q34
On 1.4.2007, a firm's capital was Rs. 2,00,000, Assets Rs. 2,40,000 and Liabilities Rs. 40,000. It sold goods costing Rs. 10,000 for Rs. 12,000. What will be the position of accounting equation after this transaction has been recorded in accounts ? Assets = Capital + Liabilities
  • A 2,42,000 = 2,02,000 + 40,000
  • B 2,52,000 = 2,12,000 + 40,000
  • C 2,30,000 = 2,00,000 + 30,000
  • D 2,22,000 = 1,82,000 + 40,000
Answer: Option A
Q35
Which one of the following statements about preparation of financial statements of a limited liability company is correct ?
  • A Financial statements should be prepared according to the cash basis of accounting only
  • B Financial statements should be prepared according to the accrual basis of accounting only
  • C Financial statements should be prepared according to either the cash basis or accrual basis of accounting
  • D Financial statements should be prepared according to both the accrual and cash basis of accounting
Answer: Option B
Q36
37. Expenses need to be recorded in the period in which the associated revenues are recognised. This is to be ensured as per which one of the following accounting principles ?
  • A Revenue recognition
  • B Cost benefit
  • C Matching
  • D Periodicity
Answer: Option A
Q37
How is profit prior to incorporation treated as ?
  • A Revenue reserve
  • B Secret reserve
  • C Capital reserve
  • D General reserve
Answer: Option C
Q38
Which one of the following has replaced the Budla system in India ?
  • A Rolling settlement
  • B Trading in equity derivatives
  • C Depository system
  • D Online trading
Answer: Option A
Q39
Which one of the following is not correct ?
  • A Mutual Fund ensures its participants a professional management of portfolio selection
  • B Mutual Fund schemes can be open-ended and/or closeended
  • C Balanced Mutual Fund aims at earning current income and capital appreciation
  • D Mutual Fund is an investment company and a merchant banker
Answer: Option D
Q40
Which one of the following statements is not correct ?
  • A Business firms combine to avoid wasteful competition
  • B Business combination is possible only among joint stock companies
  • C Business firms may combine to take advantage of patent rights of individual firms
  • D During economic depression, small firms are absorbed by financially sound large firms
Answer: Option B

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