A business has total assets of Rs 500,000 and total liabilities of Rs 180,000. What is the owner’s capital?
Correct answer D. Rs 320,000
Subject / 433 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.
Which accounting concept treats a business as separate and distinct from its owner?
Correct answer B. Business entity concept
Which accounting concept assumes that a business will continue to operate for the foreseeable future?
Correct answer B. Going concern concept
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Which accounting principle requires that likely losses be provided for but expected profits not be recorded until realised?
Correct answer C. Prudence (conservatism)
Which accounting concept requires expenses to be recorded in the same period as the revenues they help to earn?
Correct answer B. Matching concept
Which accounting concept means that only events that can be expressed in monetary terms are recorded?
Correct answer C. Money measurement concept
An owner starts the year with capital of Rs 200,000, introduces further capital of Rs 20,000, earns a net profit of Rs 50,000 and withdraws Rs 30,000. What is the closing capital?
Correct answer C. Rs 240,000
Which accounting concept states that every transaction has two equal and opposite effects?
Correct answer D. Dual aspect concept
Goods costing Rs 60,000 are sold on credit for Rs 75,000. By how much does the owner’s capital increase?
Correct answer D. Rs 15,000
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According to the historical cost concept, at what amount is an asset originally recorded in the books?
Correct answer B. The price paid to acquire it
What is the ledger that contains the personal accounts of suppliers who sell on credit called?
Correct answer B. Purchases ledger (creditors ledger)
A supplier’s account shows credit purchases of Rs 40,000. Payments of Rs 28,000 were made, goods worth Rs 3,000 were returned and a discount of Rs 1,000 was received. What is the closing balance?
Correct answer C. Rs 8,000 credit
Which of the following is a representative personal account?
Correct answer D. Outstanding wages account
Under which type of personal account does the account of a limited company or a bank fall?
Correct answer B. Artificial personal account
What is the normal balance of a purchases returns (returns outwards) account?
Correct answer C. Credit
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The debit side of a cash account totals Rs 75,000 and the credit side totals Rs 48,500. How is the account balanced?
Correct answer B. Balance c/d of Rs 26,500 entered on the credit side
During a period with a nil opening bank balance, a business deposits Rs 50,000 and issues cheques worth Rs 62,000. What does the bank column show at the end?
Correct answer D. A credit balance (overdraft) of Rs 12,000
In a cash book, what does the L.F. column stand for?
Correct answer D. Ledger folio
Because transactions are finally classified and summarised in it, the ledger is called the book of ____.
Correct answer B. final entry
A customer’s account has an opening debit balance of Rs 10,000. Credit sales to him are Rs 25,000, cash received from him is Rs 18,000 and goods returned by him are Rs 2,000. What is the closing balance?
Correct answer C. Rs 15,000 debit
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