MCQs / Q&A

Investment in own A/c appears in____________?

A. Asset side
B. Liability side
C. Netted from Capital
D. Profit & Loss A/c

Tax deducted at source A/c appears in___________?

A. Assets side
B. Liability side
C. Profit & Loss A/c
D. Debited to Capital A/c

Cost of goods sold excludes___________?

A. Opening Stock
B. Carriage inward
C. Wages & Salary
D. Postage & Stamps

When a person purchasing goods on credit he becomes a_________in the books of the seller?

A. Debtor
B. Creditor
C. Defaulter
D. Offender

The entry for creating a Provision for bad debts is_____________?

A. Debit Provision for Bad Debts A/c and credit Debtors A/c
B. Debit Debtors A/c and credit Provision for Bad Debts A/c
C. Debit Provision for Bad Debts A/c and credit Profit & Loss A/c
D. Debit Profit and Loss A/c and credit Provision for Bad Debts A/c.

Provision for bad debt is a charge against profit and therefore, the entry for creating
provision for bad debts is done by debiting P&L A/c and crediting provision for bad debts
account.

Bad debts recovered account will be transferred to______________?

A. Debtor‘s Account
B. Profit and Loss Account
C. Provision for Doubtful Debt Account
D. Either (b )or C. above

When Bad debts are recovered the entry is
Cash A/c …………………………………………………… Dr.
To Bad debts recovered A/c
This A/c can either be transferred to P& L A/c or Provisions for Doubtful Debts A/c.

____________is also known as Appraisal system of depreciation?

A. Inventory system
B. Survey system
C. Annuity system
D. Insurance

Which of the following is not depreciated?

A. Building
B. Land
C. Plant and Machinery
D. Office equipment

Which of the following is an external cause of depreciation?

A. Routine repair and maintenance
B. Misuse
C. Obsolescence
D. Wear and tear

Depreciation is calculated on the____________?

A. Cost price of asset
B. Market price
C. Cost+ Transport+ Installation expenses
D. Cost or market values whichever is less