Accounting Equation MCQ

Accounting Equation MCQ | Freshers & Experienced

  • Sharad Jaiswal
  • 12th Feb, 2021

We have listed below the best Accounting Equation MCQ Questions for your basic knowledge of Accounting Equation. This Accounting Equation Quiz contains 25 multiple Choice Questions. You have to select the right answer to every question. 

MCQs On Accounting Equation

1) If the assets of a business are Rs . 100,000 and equity is Rs. 20,000, the value of liability will be

  • A. Rs 20,000
  • B.Rs 80,000
  • C.Rs 100,000
  • D.Rs 120,000

2) Assets minus liabilities equals to

  • A. Capital
  • B.Goodwill
  • C.Working capital
  • D.Net income

3) On January 1st, 2009 an entity’s balance sheet showed total assets of rs. 750 and liabilities of rs. 250. owners’ equity at january 1st was?

  • A. Rs. 250
  • B.Rs. 500
  • C.Rs. 750
  • D.Rs. 1,000

4) Copyrights, Patents and Trademarks are_____

  • A. Fixed assets
  • B.Current assets
  • C.Investments
  • D.Intangible assets

5) Which of these is not included as a separate item in the basic accounting equation?

  • A. Revenues
  • B.Liability
  • C.Stockholder's Equity
  • D.Assets

6) Profit and loss is calculated at the stage of

  • A. Posting
  • B.Recording
  • C.Classifying
  • D.Summarising

7) Accounting principles can be classified into______

  • A. Two Kinds
  • B.Three Kinds
  • C.Four Kinds
  • D.Five Kinds

8) If assets are Rs.8000 and capital is Rs.6000 liabilities will be

  • A. 2000
  • B.4000
  • C.6000
  • D.8000

9) Fixed assets are held by business for______

  • A. Generating revenue
  • B.Resale
  • C.Converting into cash
  • D.None of the above

10) Financial statement displays the revenues and expenses of a company for a period of time_______

  • A. Balance sheet
  • B.Income Statement
  • C.Cash flow statement
  • D.Stockholder"s Equity

11) Purchase goods on credit and for cash will affect______

  • A. Cash and Creditor
  • B.Cash Good and Creditor
  • C.Cash and Good
  • D.Cash Creditor and Owner's Equity

12) Current Ratio=

  • A. Debt/Equity
  • B.Current assets/Equity
  • C.Current assets/Current liabilities
  • D.Quick assets/Current liabilities

13) Accounting principles are generally based on

  • A. Practicability
  • B.Subjectivity
  • C.Conveniences in recordings
  • D.None of the above

14) Purchase of fixed assets for cash would

  • A. Reduce current and fixed assets
  • B.Keep current and fixed assets unchanged.
  • C.Reduce current asset and increase fixed assets.
  • D.Reduce current assets and current liabilities

15) Which of the following options is not recorded in the balance sheet?

  • A. Cash
  • B.Goodwill
  • C.Building
  • D.Rent expenses

16) P&L statement is also known as:

  • A. Statement of earnings
  • B.Statement of operations
  • C.Statement of income
  • D.None of the above

17) Trade payable are recorded in______.

  • A. Asset side of B&S
  • B.Liability side of B&S
  • C.P&L account
  • D.None of the above

18) Marginal cost is concern are:

  • A. Fixed cost
  • B.Variable cost
  • C.Semi Variable cost
  • D.All of the above

19) Net asset value is also called as_______

  • A. current assets
  • B.current assets minus inventories
  • C.current assets minus current liabilities
  • D.total assets minus fixed assets

20) What is an asset ?

  • A. Use of fund
  • B.Source of fund
  • C.Inflow of funds
  • D.None of the above

21) Petty Cash fund is supposed to be replenished

  • A. Every Year
  • B.Half Year
  • C.Quarterly
  • D.Every account period

22) Debenture is also name as______

  • A. Share
  • B.Bond
  • C.Equity
  • D.Reserve

23) Accounting equation shows on a Company?

  • A. Cost Sheet
  • B.Balance Sheet
  • C.Trial Balance
  • D.Final Account

24) Base of Accounting equation is______

  • A. Single Entry System
  • B.Double Entry System
  • C.Dual asept Concept
  • D.Costing Measurement System

25) Who was the Father of Double Entry System?

  • A. Luca Pascoli
  • B.Eugeue Fama
  • C.Jeromee Lee
  • D.Pineer Peggler

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