Accounting and Auditing MCQs, Notes, Study Material – UGC NET Commerce

In this section we are going to discuss about some important MCQs on Accounting and Auditing MCQs for UGC NET Commerce Notes & Study Material.

The contents included in this unit are Financial Accounting, Corporate Accounting, Partnership Accounting, Cost and Management Accounting and Auditing and whole syllabus of Unit 2: Accounting and Auditing for UGC NET Commerce

Accounting and Auditing MCQs – UGC NET Commerce Notes

1.Which of these is accounting equation?

1. 1. Liability = Asset + Capital
   2. Asset = Liability – Capital
   3. Capital = Asset + Liability
   4. Asset = Liability +Capital.

2. Debit aspect is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐and Credit aspect is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

1. Receiving and giving
2. Liability and asset
3. Expense and Gains
4. Income and Expenses

3. Principal books of accounting are known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

1. 1. Journal
   2. Profit and loss
   3. Ledger
   4. Balance sheet

4. Which book is known as total of debit and credit?

1. 1. Balance sheet
   2. Trial balance
   3. Journal
   4. Ledger

5. Trading and profit and loss account is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

1. 1. Income
   2. Expense
   3. Position
   4. Revenue

6. Balance sheet is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ statement

1. 1. Positional
   2. Expense
   3. Income
   4. Expenditure

7. What is the equation of gross profit

1. 1. Opening stock +Purchase +Direct expense – Closing stock
   2. Sales –Cost of goods sold
   3. Sales returns –Cost of goods sold
   4. Sales + Cost of goods sold

8. For what use are preparing profit and loss a/c

1. 1. To find out net profit or net loss
   2. To find out gross profit or gross loss
   3. To know closing stock
   4. To determine the sales

9. Why use prepare trial balance

1. 1. To check arithmetical accuracy of a/c
   2. To know the financial position
   3. To know the gross profit
   4. To know the capital of the firm

10. Which type of account are entered in profit and  loss a/c

1. 1. Nominal account
   2. Personal account
   3. Real account
   4. Other

11. Which type of account is entered in balance sheet

1. 1. Nominal
   2. Real
   3. Capital
   4. Expense

12. Trading account is ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

1. Statement
2. Positional a/c
3. Capital a/c
4. Account

13. Trading account show ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ incomes and losses

1. 1. Production
   2. Sales
   3. Manufacturing
   4. Personal

14. Balance sheet show ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ and ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ of fund

1. Incomes and losses
2. Sources and applications
3. Debit and Credit
4. Asset and liability

15. Outstanding expenses are those expenses which have became‐‐‐‐‐‐‐‐‐during the accounting

1. 1. Payable
   2. Payed
   3. Received
   4. Receivable

16. Bad debt shown in adjustment is known as

1. 1. Provision for bad debt
   2. Bad debt
   3. Further bad debt
   4. Net bad debt

   
   
   
   

17. Interest on drawings is charged on

1. 1. Asset
   2. Capital
   3. Inventory
   4. Drawing

18. Managers commission is calculated on ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

1. 1. Gross profit
   2. Notional profit
   3. Net profit
   4. Sales

19. What is the journal entry of interest on capital

1. 1. Interest on capital a/c Dr  To capital a/c
   2. Drawings a/c Dr To interest on drawings
   3. Profit and loss a/c Dr To discount Debtors
   4. Capital a/c Dr To Interest on

20. Which of the following are not current asset

1. 1. Salary paid in advance
   2. Inventory
   3. Preliminary expense
   4. Temporary investment

21. Prepaid expenses is ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ to the business

1. 1. Income
   2. Expense
   3. Asset
   4. Liability

22. Adjustment given in the ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ is known as hidden adjustment

1. 1. Trial balance
   2. Profit and  loss a/c
   3. Trading
   4. Ledger

23. According to ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ concept it is assured the business will last for long time

1. 1. Accounting entity concept
   2. Going concern
   3. Money measurement concept
   4. Dual aspect principal

24. Which principal is known as basic principal of accounting

1. 1. verifiable objective principal
   2. matching principal
   3. Dual aspect principal
   4. Materiality principal

25. Which principal have separate entity

1. Going concern concept
2. Money measurement concept
3. Accounting period concept
4. Accounting entity concept

26. In which principal we say that if depreciation is charged on fixed installment basis it should be Done year after year

1. 1. Materiality concept
   2. Consistency concept
   3. Conservatism concept
   4. Time line principal

27. In which principal transaction and events are recorded in the books of account and presented in the financial statement in accordance with their substance and not

1. 1. Substance over legal form
   2. Time line principal
   3. Materiality principal
   4. Consistency principal

28. Capital receipts will not affect ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ and ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐a/c

1. Trading and  profit  and  loss a/c
2. Trading account
3. Profit and loss a/c and balance sheet
4. Trading a/c and trial balance

29. On which condition we made adjustment for closing stock as well as opening stock in the purchase account

1. 1. By buying credit purchase
   2. By buying
   3. Adjusted purchases
   4. On installment basic

30. Amount received during the course of trading operations are called

1. 1. Capital receipt
   2. Revenue expenditure
   3. Capital expenditure
   4. Revenue receipt

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Answer Keys – Auditing & Accounting MCQs

1.D          2.A         3.C      4.B         5.A         6.A        7.B        8.A          9.A      10.A       11.B     12.D   13.C     14.B       15.A     16.C     17.D       18.B        19.A         20.C      21.C     22.A        23.B    24.C    25.D    26.B        27.A      28.A       29.C         30.D