Accounting MCQs for ICOM

1. The transaction of Expenditure and Income account is recorded in:

(A) Revenue and Capital Nature of the accounting year

(B) Income

(C) Revenue nature of accounting year

(D) Capital nature of the previous year

2. The goodwill is distributed to an old partner in:

(A) Old ratio

(B) New ratio

(C) Sacrifice ratio

(D) A and B

3. The depreciation under the diminishing balance method is:

(A) Constant every year

(B) Decrease every year

(C) Changed every year

(D) Increase every year

4. How capital is obtained:

(A) Creditors account

(B) Cash account

(C) Statement of affairs

(D) Debtors account

5. The prospectus for shares can be issued only:

(A) Chartered company

(B) Private company

(C) Public company

(D) Shareholders

6. The non-trading account is prepared in:

(A) Profit and loss account

(B) Trading account

(C) Expenditure and Income account

(D) Manufacturing account

7. Opening balance is managed by preparing by:

(A) Creditors

(B) Opening statement of affairs

(C) Debtors

(D) Cash book

8. Single entry system is usually prepared by:

(A) Partnership

(B) Government

(C) Company

(D) Consignor

9. Depreciation occurs due to:

(A) Fall in the value of money

(B) Fall in the market value

(C) Physical wear and tear of an asset

(D) To show true financial position

10. A company is formed by:

(A) Directors

(B) Private

(C) Owners

(D) Promoters

11. The Debenture holders are:

(A) Owners

(B) Debtors

(C) Creditors

(D) Customers

12. Provision is created for:

(A) Increase working capital

(B) A and B

(C) Known liability

(D) Unknown liability