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Accounting MCQs / Q&A

Which of the following assets is/are to be valued at the lower of cost and net realizable value?

Accounting MCQs / Q&A /

Which of the following assets is/are to be valued at the lower of cost and net realizable value?

A. Goodwill
B. Inventories
C. Investments
D. Both B. and C. above.

Inventories B. are to be valued at the lower of cost and net realizable value. All the other assets stated in other alternatives are valued as per the cost concept. Goodwill A. is a fixed intangible asset and is shown at the cost of its acquisition. Investments C. are valued at cost or market value whichever is less. The combination of B. and C. is incorrect because a correct answer with incorrect answer is an incorrect answer. Thus, the correct answer is B

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Accounting MCQs / Q&A

Which of the following is true regarding closing entries?

Accounting MCQs / Q&A /

Which of the following is true regarding closing entries?

A. They must be followed by reversing entries
B. They transfer the balances in all of the Nominal Accounts to the Trading and Profit and Loss Account
C. They must be made after the reversing entries but before the adjusting entries
D. They must be made after the adjusting entries but before the reversing entries

Closing entries are required to transfer the nominal accounts to the Profit & Loss Account and the Trading account. Real accounts and personal account are not closed to Profit & Loss Account or Trading Account. Their balance is carried in the Balance Sheet and appears as opening Balance in the next accounting period.

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Accounting MCQs / Q&A

Which of the following statements is/are true ?

Accounting MCQs / Q&A, CASH BOOK MCQS, Ledger /
Which of the following statements is/are true ?

A. A sale of an asset is recorded in the Sales Book
B. Total of Return Outward Book is debited to Return Outward Account
C. The balance of Petty Cash Book is a liability
D. Cash Book is a subsidiary book as well as a ledger

The sale of an asset is recorded in the Asset Account and not in the Sales book (which
pertains to sale of goods). Statement A. is false.
Total of Return Outwards book (being purchase return) has a credit balance. The total is transferred at the end of the period to the credit of the Purchase Account and not debited to Return Outwards Account. Statement B. is false.
The balance of Petty Cash book is not a liability, it is an asset as it is the balance of cash left with the petty cashier. Statement C. is incorrect.
Cash Book is both a subsidiary book or book of original entry where all cash transactions are directly recorded and a ledger, it plays the role as a Cash Account (a ledger). Hence statement
D. is true.

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Accounting MCQs / Q&A, CASH BOOK MCQS, Ledger