Basic Accounting MCQS Multiple Choice Questions

These are the Basic Accounting MCQS Multiple Choice Questions. These are helpful in helping students prepare for the apptitude tests, exams and even in recruitment tests.

Who is the father of double entry accounting system:

1. Lucas Pacioli
2. Henry Fayol
3. Newton

Accumulated profit & loss account is also called:

1. Net profit of the year,
2. Retained earning,
3. Accumulated SDepreciation

Under which depreciation method , write down value of the assets at the end of useful life become zero:

1. Straight line,
2. Decling Balance,
3. Sum of Year Digit.

Sales budget is prepared on the basis of last year profit and loss account?

1. Yes
2. No

Non cash items and accrual expenses are integral part of cash budget?

1. Yes
2. No

Fund flow statement is also called:

1. cash budget
2. sources and application statement
3. profit & loss account.

Expenses and revenues for the year are shown in:

1. Profit & Loss account,
2. Balance Sheet,
3. Cash Flow Statement

Fundamental accounting equation is descirbed as:

1. revenue + assets = Capital
2. Equity + Liabilities = Assets 
3. Equaity – Liabilities = Assets

Revenue is recorded on earned basis on the basis of:

1. going concern assumption,
2. substance over form principle,
3. Accrual basis.

Long term assets are those from which future economic benefits will result for :

1. more than 12 months,
2. less than 12 months,
3. exactly 12 months

T accounts is also referred to as:

1. General Journal,
2. General Ledger,
3. Cash Book.

Cash & Cash Equivalent is a:

1. Long term Liability account,
2. Fixed Asset Account 
3. Current Asset Account
4. Current Liability Account.

Answers: Lucas Pacioli, Retained earnings, straight line, no, no, sources & application staement, profit & loss account, equity + liabilities = assets, accrusla basis, more than 12 months, general ledger, current asset account.