Accounting Equation MCQ

Accounting Equation MCQ

  • Sharad Jaiswal
  • 17th Jun, 2021

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

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Practice Best Accounting Equation MCQ Questions:

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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