Accounting MCQs with Answers

Which financial statement uses the expanded accounting equation?

1. Income statement
2. Cash flow statement
3. Statement of equities
4. Statement of financial position

The accrual basis of accounting records revenues when they are

1. Collected
2. Earned
3. Contracted
4. Readily available for use
5. All of these

The account format that displays debits credits balances and headings is___?

1. General Journal
2. General Ledger
3. T-Account
4. Ledger Account

Depreciation arises due to what?

1. Physical wear and tear of the asset
2. Fall in the market value of the asset
3. Fall in the value of money
4. All of these
5. None of these

All of the following are stockholders' equity accounts except:

1. Common Stock
2. Investment in Stock
3. Retained Earnings
4. Capital Stock

Retained earnings is classified as which type of account?

1. Asset
2. Liability
3. Expense
4. Equity
5. All of these

Which of the following business entity is considered as a “legal person” in the eye of law?

1. Sole trader
2. Partnership
3. Company
4. All of the above
5. None of these

Which of the following accounting principles requires businesses to record depreciation?

1. The cost principle
2. The matching principle
3. The revenue recognition principle
4. The going concern principle
5. All of these

Which of the following are the tools of management accounting?

1. Budgetary controls
2. Marginal Costing
3. Standard Costing
4. All of these
5. None of these

Which of the following are not the tools of management accounting?

1. Funds flow statement
2. Cash Flow statement
3. Ratio Analysis
4. Process costing