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Accounting Test

By Milan JhaMilan Jha | Reviewed By Dheeraj VaidyaDheeraj Vaidya, CFA, FRM

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. Bookkeeping
  2. Cash Flow
  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.

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  1. Market Value
  2. Net Realizable Value
  3. Book Value
  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 Reserve 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 account 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 Method Vis-a vis Written Down Value method 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 Receivable is.

  1. Nominal account
  2. Real account
  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 6th 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 asset.
  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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