Accounting Mcqs

Page No. 16

Which of the following is TRUE about the treatment of insurance premium paid in advance


aCurrent asset

✓


bCurrent liability

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cShort term liability

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dFixed asset

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View Answer Current asset

Which of the following would NOT be considered as a component of 'cost' of stock?


aTransportation inward costs

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bImport duties

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cSalaries of selling staff

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dPurchase price

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When one or both aspects of a transaction are recorded in the wrong class or category of account, it is called


aError of principle

✓


bError of omission

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cError of commission

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dError of original entry

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View Answer Error of principle

Which of the following item will be shown on debit side of debtors account?


aDiscount received

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bReturn inwards

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cDiscount allowed

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dCredit sales

✓


View Answer Credit sales

The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the asset, is termed as


aAppreciation

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bDepreciation

✓


cFluctuation

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dNone of the above

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View Answer Depreciation

Which of the following account will be credited when a typewriter is sold that has been used in the office?


aOffice equipment account

✓


bCash account

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cSales account

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dPurchase account

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Interest on loan paid by business is an example of


aRevenue expense

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bIncome

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cAsset

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dReturn outward

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View Answer Revenue expense

Which of the following account will be credited, if business bought goods on credit from Mr. Z?


aPurchases account

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bMr. Z account

✓


cCash account

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dSales account

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View Answer Mr. Z account

The unfavorable balance of Profit and Loss account should be


aAdded to liabilities

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bSubtracted from current assets

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cSubtracted from capital

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dSubtracted from liabilities

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Which of the following is an example of business liability?


aLand

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bBuilding

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cCash

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dCreditors

✓


View Answer Creditors

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