What do non-trading organisations prepare instead of a profit and loss account?
Correct answer C. Income and Expenditure Account
Subject / 378 questions
Accounting MCQs
Accounting MCQs are multiple-choice questions on recording and summarising business transactions, covering accounting principles, journals, ledgers, the cash book, trial balance, bank reconciliation and final accounts. They help commerce students and candidates for accounts, audit and banking posts. Every question shows its correct answer instantly, so you can test your understanding of entries and adjustments as you practise.
By what other name is the depreciation fund method known?
Correct answer B. Sinking Fund Method
What does a tender represent?
Correct answer A. Estimation of selling price
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Which cost category includes warehouse rent?
Correct answer B. Distribution cost
What does overhead cost consist of?
Correct answer C. all indirect costs.
A direct cost is one that can be traced to which of the following?
Correct answer C. Each unit of output
What is the process of repaying a debt over time through regular instalments of interest and principal that clear the loan by maturity called?
Correct answer B. Amortization
Goods are sold for 2,000 at a profit of 25% on cost. What is the cost of goods sold?
Correct answer C. 1,600
A Ltd has sales of 2,200, total fixed costs of 570, variable costs of 1,540 (including raw materials of 1,100) and sells 22,000 units. What is the break-even point in units if the raw material price falls by 2%?
Correct answer D. 18,387
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Which is one of the most important tools for cost planning?
Correct answer C. Budget
A worker paid 15 per hour makes 720 units (standard time 5 minutes per unit) in a 48-hour week. What are his total wages including the Rowan bonus?
Correct answer D. 864
The minimum stock level of a raw material is 4,000 units and its average stock level is 9,000 units. What is the reorder quantity?
Correct answer A. 10,000 units
For a particular month a company had opening raw material stock of 11,570, closing stock of 10,380, raw material purchases of 1,28,450 and a total manufacturing cost of 3,39,165. If factory overheads are applied at 45% of direct labour cost, how much overhead was applied to production?
Correct answer B. 65,025
A company is operating at 80% of capacity, where normal capacity output is 1,50,000 units. Variable cost is 14 per unit, total fixed costs are 8,00,000 and the target profit is 4,00,000. What should the selling price per unit be?
Correct answer C. 24.00
A company has an asset turnover of 1.85 and a profit margin of 0.35. What is its return on investment?
Correct answer A. 0.65
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Budgeted sales next year are 5,00,000 units. Desired closing finished goods are 1,50,000 units, and closing work in progress is 60,000 equivalent units. Opening finished goods are 80,000 units and opening work in progress is 50,000 equivalent units. How many equivalent units must be produced?
Correct answer C. 5,80,000
In a decision to keep or dispose of obsolete stock bought years ago, what is the original cost of that stock an example of?
Correct answer C. Sunk cost
Which of the following is not a suitable basis for apportioning the costs of a transport department?
Correct answer D. Crane value
What is the total cost of running a business other than the cost of manufacturing and production called?
Correct answer A. Commercial cost
What are costs that vary between alternative courses of action called?
Correct answer A. Differential costs
About Accounting MCQs
This category is organised around the accounting cycle. The Principles of Accounting section covers the accounting equation, double entry, capital and revenue expenditure, provisions for bad debts, bad debts recovered and the correct sequence from recording transactions to preparing financial statements. Questions often ask how a single entry affects accounts, such as a payment posted to the credit side of a person's account.
The Ledger section tests how accounts are opened and balanced in the ledger, why the ledger is the base for preparing a trial balance, and which errors affect only one account. The Cash Book section covers single, double and triple column cash books, discounts allowed and received, petty cash balances and the correction of cash entries recorded at the wrong amount.
Bank Reconciliation Statement questions ask why the cash book and bank passbook balances differ, covering cheques issued but not presented, cheques deposited but not credited, bank charges and direct deposits. There are also questions on credit notes, overheads, trade discounts and partnership commission. Accounting MCQs matter because they are standard in commerce, banking and accounts officer tests, and they reward clear, step-by-step reasoning.
Key facts to remember
- The accounting equation states that assets equal liabilities plus owner's equity.
- Under double entry, every transaction affects at least two accounts with equal debits and credits.
- The ledger is the book in which all individual accounts are maintained.
- A trial balance is prepared from the balances of ledger accounts.
- A bank reconciliation statement explains differences between the cash book balance and the bank passbook balance.
- Capital expenditure provides long-term benefit, while revenue expenditure is consumed within the accounting period.
- A trade discount is a reduction in list price and is not recorded in the books.
- Credit notes received from suppliers are recorded in the purchases returns journal.
Exams that include Accounting MCQs
Pakistan
- Banking job tests
- FPSC
- PPSC
- SPSC
- NTS
- Lecturer tests
India
- SSC CGL
- IBPS PO
- UGC NET
- State PSC exams
- Campus placements
Bangladesh
- Bank job exams
- Bangladesh Bank recruitment
- BCS
- Government job tests
- NTRCA
How to prepare for Accounting MCQs
- Memorise the debit and credit rules for each type of account, then apply them to every transaction before looking at the options.
- Practise preparing a short bank reconciliation statement by hand so you understand which items are added and which are subtracted.
- Make a table separating capital and revenue expenditure with examples, as classification questions appear frequently.
- Learn which errors a trial balance reveals and which it does not, such as errors of omission and compensating errors.
- For numerical problems, write each step in the margin, because adjustment questions often hide a reversal or a percentage twist.
Frequently asked questions
What are the most important topics in Accounting MCQs?
Important topics include accounting principles and the accounting equation, journal entries, ledger posting, the cash book, trial balance, rectification of errors, bank reconciliation statements, capital and revenue expenditure, and provisions such as bad debts. Partnership and depreciation questions also appear in many tests.
Which exams ask Accounting MCQs?
Accounting questions appear in commerce, accounts and banking recruitment. In Pakistan they are common in bank tests and accounts posts through FPSC and PPSC. In India they appear in SSC CGL and UGC NET Commerce, and in Bangladesh in bank job exams and BCS.
How many Accounting MCQs are on MCQs360?
MCQs360 has 387 Accounting MCQs, grouped into Principles of Accounting, Ledger, Cash Book and Bank Reconciliation Statement sections. Each question shows its correct answer instantly, and practice is free with no sign-up. Begin with Principles of Accounting if your basics need strengthening.
How should I prepare for Accounting MCQs?
Get the basic debit and credit rules fully clear first, because almost every question depends on them. Then practise topic by topic, following the accounting cycle from journal to final accounts. Redo numerical questions you got wrong, writing each entry out, until you can solve them without hesitation.
Why do the cash book and passbook balances differ?
They differ mainly because of timing and information gaps. Cheques issued may not yet be presented, deposits may not yet be credited, and the bank may record charges, interest or direct deposits before the business knows about them. A bank reconciliation statement brings the two balances into agreement.
What is the difference between a trade discount and a cash discount?
A trade discount is a reduction in the list price given at the time of sale, usually for bulk buying, and it is not recorded in the accounts. A cash discount is allowed for prompt payment of a debt, and it is recorded in the books as discount allowed or discount received.
Last reviewed October 2026