Accounting Test

What is Accounting Test?

Accounting Test is done to analyze the candidate’s ability to maintain the proper book of accounts i.e. bookkeeping and includes some very basic accounting questions which are in the form of Multiple Choice Questions (MCQ). The candidates are expected to answer by picking up the correct option from the given 4 options in the questions.

The qualification marks are set to be 50% of the total correct answers given. Suppose any candidate manages to clear 50% or more shall be considered fit for the next level of Advanced Accounting course. Accounting depends on practice, and then only this subject can be understood easily by any candidate. Accounting Test is made to check the basic knowledge of the subject in which the candidates wants to pursue their careers.

Accounting Test Questions with Answers

Question #1 – Depreciation on any machinery is implied from the date.

1. The machinery is ready to be put to use.
2. When the machinery was purchased.
3. The machinery was installed.
4. Any of the above-mentioned options.

Answer: The machinery is ready to be put to use.

Question #2 – Among these four, which one is not a subsidiary book.

1. Purchase book.
2. Cashbook.
3. Bill of Receivables Book.
4. Sales Book.

Answer: Cash Book.

Question #3 – Financial Statement is a part of which of the following among these.

1. BookkeepingBookkeepingBookkeeping is the day to day recording of financial transactions such as purchases, sales, receipts, and payments, and it is the first step in the accounting process. It can be prepared in two ways: single-entry and double-entry; however, the double-entry approach is more widely used and recognized in most countries.read more
2. Cash FlowCash FlowCash Flow is the amount of cash or cash equivalent generated & consumed by a Company over a given period. It proves to be a prerequisite for analyzing the business’s strength, profitability, & scope for betterment. read more
3. Accounting
4. All of the above

Answer: Accounting.

Question #4 – The Value of any asset after deducting depreciation from the historical Cost is defined as.

1. Market Value
2. Net Realizable ValueNet Realizable ValueNet Realizable Value is a value at which the asset may be sold in the market by the company after deducting the expected cost of selling the asset in the market. It is a crucial metric for determining the value of a company's ending inventory or receivables.read more
3. Book ValueBook ValueThe book value formula determines the net asset value receivable by the common shareholders if the company dissolves. It is calculated by deducting the preferred stocks and total liabilities from the total assets of the company.read more
4. Face Value

Answer: Book Value.

Question #5 – Apex Co. Ltd has machinery worth $10000 Written down Value, and $1500 as its Cost on 31.03.19. The machinery was sold to a client, and the amount of $100 was transferred to the Capital ReserveCapital ReserveCapital reserve is a reserve that is formed from the company's profits earned from its non-operating activities during a period of time and is retained for the purpose of financing the company's long-term projects or writing off its capital expenses in the future.read more account. Calculate the sale price of the machinery.

1. $11000
2. $5000
3. $16000
4. $26000

Answer: $16000.

Question #6 – Pick up a correct Journal entry for the loan taken from the bank.

1. Bank Account Debit and Cash Account credit.
2. Cash Account Debit and Loan Account credit.
3. Bank account Debit and Loan account credit.
4. Loan Account Debit and Bank account credit.

Answer: Bank account Debit and Loan account credit.

Question #7 – What type of error is this if credit sales wrongly passed through the purchase book?

1. Error of Omission
2. Error of Commission
3. Error of Principle
4. None of the above.

Answer: Error of Commission.

Question #8 – Pick up a correct journal entry for machinery purchased.

1. Bank account Debit and Asset accountAsset AccountAsset Accounts are one of the categories in the General Ledger Accounts holding all the credit & debit details of a Company’s assets. The examples include Short-Term Investments, Prepaid Expenses, Supplies, Land, equipment, furniture & fixtures etc. read more credit.
2. Cash account Debit and Machinery account credit.
3. Machinery account Debit and Sales account credit.
4. Machinery account Debit and Bank account credit.

Answer: Machinery account Debit and Bank account credit.

Question #9 – Steven places an order to Peter or the supply of a certain product that was not yet manufactured. On receipt of the order, Peter goes to the market and purchase all the raw material required, hired some employees to get the things done, and successfully completed the order and delivered the goods to Steven. Now here the question arises that the sale is presumed to be recorded at the time of which event.

1. Delivery of good
2. Purchase of raw material
3. Receipt of good
4. Production of goods

Answer: Delivery of good.

Question #10 – Sales of $1500 to Mr. Xavier were posted to his account at $1400. Now to rectify the mistake of $100, the same should be done by doing what to Xavier’s account.

1. Debited
2. Credited
3. Ignored
4. Either Debit or Credit.

Answer: Debited.

Question #11 – For machinery, if the rate of depreciation is exactly the same, then the amount of depreciation under the Straight Line MethodStraight Line MethodStraight Line Depreciation Method is one of the most popular methods of depreciation where the asset uniformly depreciates over its useful life and the cost of the asset is evenly spread over its useful and functional life. read more Vis-a vis Written Down Value methodWritten Down Value MethodThe Written Down Value method is a depreciation technique that applies a constant rate of depreciation to the net book value of assets each year, resulting in more depreciation expenses recognized in the early years of the asset's life and less depreciation recognized in the later years of the asset's life.read more will be.

1. Equal in all the years
2. Equal in the first year but lower in the subsequent years.
3. Equal in the first year but higher in the subsequent years.
4. Lower in the first year but equal in the subsequent year.

Answer: Equal in the first year but higher in the subsequent years.

Question #12 – Account ReceivableAccount ReceivableAccounts receivables refer to the amount due on the customers for the credit sales of the products or services made by the company to them. It appears as a current asset in the corporate balance sheet.read more is.

1. Nominal accountNominal AccountNominal Accounts are the general ledger accounts which are closed by the end of an accounting period. Their balance at the end of period comes to zero so they don't appear in the balance sheet.read more
2. Real accountReal AccountReal accounts do not close their balances at the end of the financial year but retain and carry forward their closing balance from one accounting year to another. In other words, the closing balance of these accounts in one accounting year becomes the opening balance of the succeeding accounting year.read more
3. Personal account
4. None of the above.

Answer: Real account.

Question #13 – The Cost of machinery is $135000, and its residual value is $5000, the useful life of the machinery is said to be ten years. In the first five years, the company used the depreciation method as the Straight Line Method, and then later on, by discussing with the management, the company decided to take its useful life further for another eight years. Calculate the depreciation amount for the 6^th year.

1. 8000
2. 8125
3. 8200
4. None of the above.

Answer: 8125

Question #14 – Purchase of machinery for cash.

1. Increases the total cash.
2. Decreases the total assetTotal AssetTotal Assets is the sum of a company's current and noncurrent assets. Total assets also equals to the sum of total liabilities and total shareholder funds. Total Assets = Liabilities + Shareholder Equityread more.
3. Remains total asset unchanged
4. Decreases total liability.

Answer: Remains total assets unchanged.

Question #15 – Sale of a building credited to the Sales account. Please pick the correct error for the same.

1. Error of Omission
2. Error of Commission
3. Error of Principle
4. None of the above.

Answer: Error of Principle.

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