Accounting MCQs with Answers

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ABC Ltd. has a Current Ratio of 1.5 : 1 and Net Current Assets of Rs. 5,00,000. What are the Current Assets?

  1. Rs. 25,00
  2. Rs. 15,00,000
  3. Rs. 10,00,000,
  4. Rs. 5,00,000

The dividend-payout ratio is equal to ____.

  1. dividends per share divided by current price per share.
  2. dividends per share divided by par value per share
  3. dividends per share divided by earnings per share
  4. the dividend yield plus the capital gains yield

Key factor is also known as ____

  1. Principal factor
  2. Governing factor
  3. Limiting factor
  4. All

Cost accounting is primarily concerned with:

  1. Calculating profits
  2. Recording financial transactions
  3. Analyzing and controlling costs
  4. Forecasting future sales

The person from who goods are bought on credit is known as ____________.

  1. Creditor
  2. Debtor
  3. Borrower
  4. None of these

Which of the following statement measures the financial position of the entity on particular time?

  1. Income Statement
  2. Balance Sheet
  3. Cash Flow Statement
  4. Statement of Retained Earning

Which of the following has the highest cost of capital?

  1. Preference shares
  2. Bonds
  3. Loans
  4. Equity shares

Criterion for IRR (Internal Rate of Return)?

  1. Accept IRR = Cost of capital
  2. Accept IRR < Cost of capital
  3. Accept IRR > Cost of capital
  4. None of these

What should be the criteria of selection when choosing among mutually exclusive projects?

  1. Selecting a project with a lower cost of capital
  2. Selecting a project with the quickest payback
  3. Selecting a project with the longest payback
  4. Selecting a project with the highest net present value

Which statement shows the flow of cash and cash equivalents during the financial period?

  1. Income statement
  2. Balance sheet
  3. Cash flow statement
  4. Statement of changes in equity

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