Accounting Multiple Choice Questions and Answers

1. In which year was the Limited Liability Act passed?

1. 1494
2. 1855
3. 1844
4. 1948

2. Return on Investment Ratio (ROI) =

1. (Gross profit / Net sales) x 100
2. (Gross profit x Sales / Fixed assets) x 100
3. (Net profit / Sales) x 100
4. (Net profit / Total assets) x 100

3. Which account is not a liability account?

1. Accounts payable
2. Accrued expenses
3. Cash
4. Notes payable

4. Which of the following is not a liability?

1. Accrued Accountancy Fees
2. Hire Purchase Creditor
3. Bank Overdraft
4. Depreciation on Motor Vehicle

5. Which of the following is not a credit balance?

1. Accumulated Depreciation of Fixtures and Fittings
2. Sales Income
3. Interest Paid
4. Interest Received

6. Sales expenditure budget is prepared by estimating the expense(s) of

1. Advertisement
2. Market analysis
3. Salesmans salary
4. All of the above

7. Which of these is not included as a separate item in the basic accounting equation?

1. Assets
2. Liabilities
3. Revenues
4. Stockholders equity

8. Balance sheet is a statement of

1. Assets
2. Liability
3. Capital
4. All of the above

9. Which of the following balance sheet equations is wrong?

1. Assets + Liabilities = Capital
2. Assets - Liabilities = Capital
3. Assets - Capital = Liabilities
4. Liabilities + Capital = Assets

10. Which of the following source books will not be required in a cash business?

1. Bank Account
2. Petty Cash Account
3. Sales Ledger
4. Nominal Ledger