MCQs FROM BILL OF EXCHANGE

 SBSIRCommerce Present 

Here are 30 Short Answer Questions (SAQs) with answers based on the *Bill of Exchange* chapter of Accountancy,

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1. **Q1: What is a Bill of Exchange?**

   - **a.** A written order for unconditional payment

   - **b.** A verbal agreement between parties

   - **c.** A written promise for conditional payment  

   **Answer:** a. A written order for unconditional payment

2. **Q2: Who is the drawer in a Bill of Exchange?**

   - **a.** The person who pays the bill

   - **b.** The person who draws the bill

   - **c.** The bank

   **Answer:** b. The person who draws the bill

3. **Q3: Who is the drawee in a Bill of Exchange?**

   - **a.** The person on whom the bill is drawn

   - **b.** The person who draws the bill

   - **c.** The creditor

   **Answer:** a. The person on whom the bill is drawn

4. **Q4: Who is the payee in a Bill of Exchange?**

   - **a.** The person who pays the bill

   - **b.** The person to whom payment is made

   - **c.** The person who draws the bill

   **Answer:** b. The person to whom payment is made

5. **Q5: What is the tenure of a Bill of Exchange called?**

   - **a.** Maturity period

   - **b.** Usance period

   - **c.** Grace period

   **Answer:** b. Usance period

6. **Q6: What are the extra three days given after the maturity date of a bill called?**

   - **a.** Maturity period

   - **b.** Usance period

   - **c.** Grace days

   **Answer:** c. Grace days

7. **Q7: When is a bill considered to be "Dishonored"?**

   - **a.** When the drawee refuses to accept or pay

   - **b.** When the drawer accepts it

   - **c.** When the bank pays it

   **Answer:** a. When the drawee refuses to accept or pay

8. **Q8: Which party can endorse a Bill of Exchange?**

   - **a.** Drawer

   - **b.** Drawee

   - **c.** Payee

   **Answer:** c. Payee

9. **Q9: What is meant by "Noting" in the context of a dishonored bill?**

   - **a.** Recording of bill details by the bank

   - **b.** A formal recording of dishonor

   - **c.** Payment of the bill

   **Answer:** b. A formal recording of dishonor

10. **Q10: Which authority is approached for noting the dishonor of a bill?**

   - **a.** Payee

   - **b.** Notary Public

   - **c.** Bank

   **Answer:** b. Notary Public

11. **Q11: What is an “Accommodation Bill”?**

   - **a.** A bill for accommodation of goods

   - **b.** A bill drawn for mutual financial help without consideration

   - **c.** A bill accepted by the bank

   **Answer:** b. A bill drawn for mutual financial help without consideration

12. **Q12: What does "Discounting of a Bill" mean?**

   - **a.** Paying the bill on time

   - **b.** Selling the bill to a bank before maturity at a discount

   - **c.** Dishonoring the bill

   **Answer:** b. Selling the bill to a bank before maturity at a discount

13. **Q13: Who is liable for payment on the maturity of a bill?**

   - **a.** Drawer

   - **b.** Drawee

   - **c.** Endorser

   **Answer:** b. Drawee

14. **Q14: What is "Acceptance" of a bill?**

   - **a.** When the payee accepts the payment

   - **b.** When the drawee agrees to the bill

   - **c.** When the drawer acknowledges the bill

   **Answer:** b. When the drawee agrees to the bill

15. **Q15: What is the "Maturity Date" of a bill?**

   - **a.** Date of drawing the bill

   - **b.** Date on which the bill is payable

   - **c.** Date when the bill is endorsed

   **Answer:** b. Date on which the bill is payable

16. **Q16: What is an "Inland Bill"?**

   - **a.** A bill drawn within the same country

   - **b.** A bill drawn on a foreign party

   - **c.** A bill drawn by a bank

   **Answer:** a. A bill drawn within the same country

17. **Q17: What is a "Foreign Bill"?**

   - **a.** A bill drawn on a party in the same country

   - **b.** A bill drawn on a party outside the country

   - **c.** A bill drawn by the government

   **Answer:** b. A bill drawn on a party outside the country

18. **Q18: Which party is responsible for “Noting” charges?**

   - **a.** Drawer

   - **b.** Drawee

   - **c.** Endorser

   **Answer:** a. Drawer

19. **Q19: What is "Renewal of a Bill"?**

   - **a.** Extension of payment time after maturity

   - **b.** Dishonoring a bill

   - **c.** Payment of the bill on time

   **Answer:** a. Extension of payment time after maturity

20. **Q20: When is a Bill of Exchange termed as "Settled"?**

   - **a.** When it is endorsed

   - **b.** When the payment is made on maturity

   - **c.** When it is discounted

   **Answer:** b. When the payment is made on maturity

21. **Q21: What is the purpose of drawing a Bill of Exchange?**

   - **a.** To keep a record of goods sold

   - **b.** To provide evidence of credit transactions

   - **c.** To secure a loan

   **Answer:** b. To provide evidence of credit transactions

22. **Q22: What is the meaning of "Retiring a Bill"?**

   - **a.** Settling the bill before the due date

   - **b.** Dishonoring the bill

   - **c.** Accepting a new bill

   **Answer:** a. Settling the bill before the due date

23. **Q23: Who bears the discounting charges in case of a discounted bill?**

   - **a.** Drawee

   - **b.** Drawer

   - **c.** Bank

   **Answer:** b. Drawer

24. **Q24: What is the accounting treatment for a dishonored bill?**

   - **a.** Credit drawee’s account

   - **b.** Debit drawee’s account

   - **c.** Credit drawer’s account

   **Answer:** b. Debit drawee’s account

25. **Q25: Which act governs the Bill of Exchange in India?**

   - **a.** Companies Act, 2013

   - **b.** Indian Contract Act, 1872

   - **c.** Negotiable Instruments Act, 1881

   **Answer:** c. Negotiable Instruments Act, 1881

26. **Q26: Can a Bill of Exchange be transferred?**

   - **a.** No, it cannot be transferred

   - **b.** Yes, through endorsement

   - **c.** Only through legal proceedings

   **Answer:** b. Yes, through endorsement

27. **Q27: What is "Endorsement in Full"?**

   - **a.** When the payee transfers the bill to a specific person

   - **b.** When the bill is fully paid

   - **c.** When the bill is dishonored

   **Answer:** a. When the payee transfers the bill to a specific person

28. **Q28: What does "Without Recourse" mean in a bill?**

   - **a.** Drawee cannot be held responsible

   - **b.** Drawer has no further liability after endorsing

   - **c.** Drawee refuses to pay

   **Answer:** b. Drawer has no further liability after endorsing

29. **Q29: What is a "Promissory Note"?**

   - **a.** An unconditional written promise to pay

   - **b.** An agreement for a loan

   - **c.** A bank statement

   **Answer:** a. An unconditional written promise to pay

30. **Q30: What happens when a bill is dishonored 

by non-acceptance?**

   - **a.** Drawee must pay penalty

   - **b.** Noting and protesting occur

   - **c.** The bill is renewed

   **Answer:** b. Noting and protesting occur

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Mcqs : Emerging Modes of Business**

 Business**

1. Emerging modes of business refer to:

   - A) New types of physical stores

   - B) New methods of conducting business (Correct Answer)

   - C) Traditional brick-and-mortar businesses

2. The primary driver behind emerging modes of business is:

   - A) Global warming

   - B) Technological advancements (Correct Answer)

   - C) Urbanization

3. E-business is conducted:

   - A) Face-to-face

   - B) Over the internet (Correct Answer)

   - C) In physical markets

4. E-business involves:

   - A) Buying and selling only physical products

   - B) Buying, selling, and providing services online (Correct Answer)

   - C) Exclusively providing consulting services

5. The scope of e-business includes:

   - A) Selling products only

   - B) Facilitating transactions and communication (Correct Answer)

   - C) Manufacturing products

6. Which of the following activities is part of e-business?

   - A) Manufacturing goods

   - B) Online customer support (Correct Answer)

   - C) Packaging goods

7. A key difference between e-business and traditional business is:

   - A) Location dependence (Correct Answer)

   - B) Product variety

   - C) Customer relations

8. E-business is preferred over traditional business for:

   - A) More personal customer interactions

   - B) Lower operating costs (Correct Answer)

   - C) Limited market reach

9. Which of the following is true about traditional business?

   - A) It operates without geographical limitations

   - B) It relies on physical stores and direct interactions (Correct Answer)

   - C) It is conducted solely online

10. E-business allows for:

   - A) Limited working hours

   - B) 24/7 availability (Correct Answer)

   - C) Physical presence for transactions

11. Traditional businesses typically involve:

   - A) High operating costs (Correct Answer)

   - B) Low infrastructure requirements

   - C) No customer interaction

12. Outsourcing refers to:

   - A) Performing all business functions internally

   - B) Hiring external firms to perform certain functions (Correct Answer)

   - C) Selling business assets

13. A common example of outsourcing is:

   - A) Customer support services (Correct Answer)

   - B) Production management

   - C) Corporate governance

14. Outsourcing is mainly done to:

   - A) Increase operational costs

   - B) Focus on core competencies (Correct Answer)

   - C) Lose control over the business

15. Which is not an advantage of outsourcing?

   - A) Access to expertise

   - B) Higher operational control (Correct Answer)

   - C) Cost reduction

16. KPO stands for:

   - A) Knowledge Process Outsourcing (Correct Answer)

   - B) Key Process Optimization

   - C) Knowledge Priority Outsourcing

17. KPO focuses on:

   - A) Basic routine tasks

   - B) High-level specialized knowledge (Correct Answer)

   - C) Simple manufacturing processes

18. An example of KPO is:

   - A) Call center services

   - B) Research and development (Correct Answer)

   - C) Packaging

19. KPO services require:

   - A) Generalized skill sets

   - B) Specialized expertise and knowledge (Correct Answer)

   - C) Physical infrastructure

20. KPO is primarily beneficial for:

   - A) Reducing labor costs

   - B) Accessing strategic insights (Correct Answer)

   - C) Short-term profits

21. E-business and KPO are different because:

   - A) KPO involves physical products

   - B) E-business focuses on online sales, while KPO deals with specialized knowledge (Correct Answer)

   - C) Both rely on routine tasks

22. Which of the following is not part of KPO?

   - A) Data analysis

   - B) Customer order fulfillment (Correct Answer)

   - C) Financial consultancy

23. KPO services are generally more:

   - A) Transaction-based

   - B) Knowledge-intensive (Correct Answer)

   - C) Labor-intensive

24. E-business enables:

   - A) Personalized customer interactions

   - B) Wider customer reach online (Correct Answer)

   - C) Specialized consulting services

25. KPO involves industries like:

   - A) Retail

   - B) Legal, finance, and healthcare (Correct Answer)

   - C) Hospitality

26. A major reason for the rise in KPO is:

   - A) Global competition

   - B) Increasing demand for specialized knowledge (Correct Answer)

   - C) Decline in traditional businesses

27. Outsourcing helps businesses to:

   - A) Manage all operations in-house

   - B) Focus on strategic growth (Correct Answer)

   - C) Reduce employee count

28. India is a hub for KPO due to:

   - A) Cheap labor

   - B) Availability of highly skilled professionals (Correct Answer)

   - C) Free trade agreements

29. One disadvantage of outsourcing is:

   - A) Access to global expertise

   - B) Loss of control over outsourced functions (Correct Answer)

   - C) Reduction in operational costs

30. KPO differs from traditional o

utsourcing by focusing on:

   - A) Labor-intensive work

   - B) Knowledge and expertise (Correct Answer)

   - C) Physical infrastructure development

MCQS Business Services

 Chapter Business Services**

1. Business services refer to:

   - A) Tangible goods

   - B) Intangible services (Correct Answer)

   - C) Manufacturing goods

2. The main focus of business services is on:

   - A) Production

   - B) Customer satisfaction (Correct Answer)

   - C) Inventory management

3. Business services support:

   - A) Only retail businesses

   - B) Both businesses and consumers (Correct Answer)

   - C) Only manufacturers

4. Business services are:

   - A) Tangible

   - B) Intangible (Correct Answer)

   - C) Physical products

5. One key feature of business services is:

   - A) Can be stored

   - B) Cannot be stored (Correct Answer)

   - C) Can be resold

6. Business services are produced and consumed:

   - A) Simultaneously (Correct Answer)

   - B) Separately

   - C) After a time lag

7. The quality of business services depends on:

   - A) Standardization

   - B) Provider’s ability (Correct Answer)

   - C) Product design

8. Which is not a type of business service?

   - A) Banking

   - B) Manufacturing (Correct Answer)

   - C) Insurance

9. Which of the following is a business service?

   - A) IT services (Correct Answer)

   - B) Raw material supply

   - C) Finished goods

10. An example of business process outsourcing service is:

   - A) Production line

   - B) Payroll processing (Correct Answer)

   - C) Sales

11. Which of the following is a financial service?

   - A) Banking (Correct Answer)

   - B) Transport

   - C) Telecommunication

12. Which service involves the transfer of risks?

   - A) Banking

   - B) Insurance (Correct Answer)

   - C) Marketing

13. Which business service helps in facilitating smooth movement of goods?

   - A) Insurance

   - B) Warehousing (Correct Answer)

   - C) Accounting

14. Communication services involve:

   - A) Storage of goods

   - B) Exchange of information (Correct Answer)

   - C) Security services

15. Courier services fall under the category of:

   - A) Financial services

   - B) Communication services (Correct Answer)

   - C) Insurance services

16. A service that provides protection against risks is:

   - A) Accounting

   - B) Insurance (Correct Answer)

   - C) Marketing

17. The term “business services” covers services like:

   - A) Banking, Insurance, Warehousing (Correct Answer)

   - B) Manufacturing, Processing, Selling

   - C) Construction, Infrastructure, Agriculture

18. Which of the following is an example of a banking service?

   - A) Manufacturing loans

   - B) Providing credit (Correct Answer)

   - C) Transporting goods

19. Marketing research services are classified under:

   - A) Financial services

   - B) Marketing services (Correct Answer)

   - C) Security services

20. Which of the following is a communication service?

   - A) Mobile networks (Correct Answer)

   - B) Manufacturing services

   - C) Financial advisory

MCQs from Private,Public Global

 Here are 30 multiple-choice questions (MCQs) with answers based on the chapter "Private, Public, and Global Enterprises" from Business Studies:

---

### 1. Which of the following is a feature of private sector enterprises?

A. Owned and controlled by the government  

B. Profit-oriented  

C. Funded by taxes  

**Answer: B. Profit-oriented**

### 2. A government company is defined as any company in which the government owns at least:

A. 25% of shares  

B. 51% of shares  

C. 75% of shares  

**Answer: B. 51% of shares**

### 3. Which of the following is an example of a public sector enterprise in India?

A. Tata Steel  

B. Indian Oil Corporation  

C. Infosys  

**Answer: B. Indian Oil Corporation**

### 4. Which of the following is NOT a feature of a public sector enterprise?

A. Owned by the government  

B. Profit is the sole objective  

C. Public accountability  

**Answer: B. Profit is the sole objective**

### 5. In which type of enterprise is ownership and management typically separated?

A. Private company  

B. Public sector enterprise  

C. Joint Hindu Family business  

**Answer: B. Public sector enterprise**

### 6. Which form of enterprise allows for foreign direct investment (FDI)?

A. Only public sector enterprises  

B. Only private sector enterprises  

C. Both public and private sector enterprises  

**Answer: C. Both public and private sector enterprises**

### 7. The term 'global enterprise' refers to:

A. Small local businesses  

B. Multinational corporations (MNCs)  

C. Government-controlled companies  

**Answer: B. Multinational corporations (MNCs)**

### 8. What is the primary objective of public sector enterprises?

A. Profit maximization  

B. Social welfare  

C. Market competition  

**Answer: B. Social welfare**

### 9. Which of the following is an example of a global enterprise?

A. Reliance Industries  

B. Walmart  

C. State Bank of India  

**Answer: B. Walmart**

### 10. Which type of enterprise is characterized by operations in multiple countries?

A. Private enterprise  

B. Public enterprise  

C. Global enterprise  

**Answer: C. Global enterprise**

### 11. The major source of funding for public sector enterprises is:

A. Shareholders' equity  

B. Government grants and taxes  

C. Bank loans  

**Answer: B. Government grants and taxes**

### 12. Which of the following is a benefit of public sector enterprises?

A. Focus on profitability  

B. Greater social responsibility  

C. Flexibility in decision-making  

**Answer: B. Greater social responsibility**

### 13. A government company is incorporated under which act?

A. Indian Companies Act, 1956  

B. Indian Partnership Act, 1932  

C. Factories Act, 1948  

**Answer: A. Indian Companies Act, 1956**

### 14. What is the primary goal of private sector enterprises?

A. Maximizing profits  

B. Providing public services  

C. Ensuring economic equality  

**Answer: A. Maximizing profits**

### 15. Which of the following is an example of a joint venture between a public and private company in India?

A. Maruti Suzuki  

B. Bharat Heavy Electricals Limited (BHEL)  

C. Hindustan Unilever Limited  

**Answer: A. Maruti Suzuki**

### 16. Which type of enterprise is primarily driven by consumer demand and market competition?

A. Public sector enterprise  

B. Private sector enterprise  

C. Cooperative enterprise  

**Answer: B. Private sector enterprise**

### 17. What is the major advantage of global enterprises?

A. Limited competition  

B. Access to international markets  

C. Government support  

**Answer: B. Access to international markets**

### 18. Which of the following is a limitation of public sector enterprises?

A. Flexibility in operations  

B. Excessive government interference  

C. High profitability  

**Answer: B. Excessive government interference**

### 19. What is the characteristic of multinational corporations (MNCs)?

A. Operates in one country  

B. Operates in multiple countries  

C. Funded only by the government  

**Answer: B. Operates in multiple countries**

### 20. The process of transferring ownership of public sector enterprises to the private sector is known as:

A. Nationalization  

B. Liberalization  

C. Privatization  

**Answer: C. Privatization**

### 21. Which of the following is an example of a private sector enterprise in India?

A. Hindustan Aeronautics Limited  

B. Tata Motors  

C. National Thermal Power Corporation (NTPC)  

**Answer: B. Tata Motors**

### 22. What is the primary objective of multinational corporations (MNCs)?

A. Social welfare  

B. Maximizing global market share and profits  

C. Maintaining domestic market operations  

**Answer: B. Maximizing global market share and profits**

### 23. Which type of enterprise is typically more efficient due to reduced bureaucracy?

A. Public sector enterprise  

B. Private sector enterprise  

C. Joint sector enterprise  

**Answer: B. Private sector enterprise**

### 24. Public sector enterprises play a major role in:

A. Controlling inflation  

B. Developing infrastructure  

C. Supporting private sector companies  

**Answer: B. Developing infrastructure**

### 25. A key disadvantage of multinational corporations (MNCs) in host countries is:

A. Generation of employment  

B. Exploitation of resources  

C. Transfer of technology  

**Answer: B. Exploitation of resources**

### 26. Which of the following is an example of a global enterprise in the IT sector?

A. Google  

B. Indian Oil Corporation  

C. Tata Power  

**Answer: A. Google**

### 27. What is the major benefit of joint sector enterprises?

A. Total control by the government  

B. Combination of public and private sector expertise  

C. Profit distribution only to the government  

**Answer: B. Combination of public and private sector expertise**

### 28. Which of the following is a characteristic of public sector enterprises?

A. Limited liability  

B. Transparency and public accountability  

C. No government involvement  

**Answer: B. Transparency and public accountability**

### 29. The expansion of private enterprises in a liberalized economy leads to:

A. Increased government control  

B. Greater competition and innovation  

C. Reduced employment opportunities  

**Answer: B. Greater competition and innovation**

### 30. 

In a joint venture, the partners can be:

A. Only public companies  

B. Private and public enterprises  

C. Only foreign companies  

**Answer: B. Private and public enterprises**

MCQs from Forms of Business

 Here are 30 multiple-choice questions (MCQs) based on the topic "Forms of Business Organization" from Business Studies, with answers included:

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### 1. Which of the following is the simplest form of business organization?

A. Partnership  

B. Corporation  

C. Sole Proprietorship  

**Answer: C. Sole Proprietorship**

### 2. Which form of business is owned and managed by a single person?

A. Sole Proprietorship  

B. Joint Hindu Family Business  

C. Cooperative Society  

**Answer: A. Sole Proprietorship**

### 3. In which form of business organization is liability unlimited?

A. Corporation  

B. Sole Proprietorship  

C. Joint Stock Company  

**Answer: B. Sole Proprietorship**

### 4. Which form of business organization has perpetual succession?

A. Partnership  

B. Company  

C. Sole Proprietorship  

**Answer: B. Company**

### 5. Which of the following is NOT a characteristic of a partnership?

A. Limited liability  

B. Mutual agency  

C. Sharing of profits  

**Answer: A. Limited liability**

### 6. What document governs the operations of a partnership firm?

A. Articles of Incorporation  

B. Partnership Agreement  

C. Memorandum of Association  

**Answer: B. Partnership Agreement**

### 7. A partnership where all partners have unlimited liability is called:

A. General Partnership  

B. Limited Liability Partnership  

C. Joint Stock Company  

**Answer: A. General Partnership**

### 8. The minimum number of partners required to form a partnership is:

A. One  

B. Two  

C. Five  

**Answer: B. Two**

### 9. In a Joint Stock Company, the liability of shareholders is:

A. Unlimited  

B. Limited to the amount of capital invested  

C. Limited to personal assets  

**Answer: B. Limited to the amount of capital invested**

### 10. The ownership of a company is divided into:

A. Shares  

B. Bonds  

C. Contracts  

**Answer: A. Shares**

### 11. What type of business organization is created by a special act of the Parliament or State Legislature?

A. Sole Proprietorship  

B. Government Company  

C. Cooperative Society  

**Answer: B. Government Company**

### 12. Which of the following is an advantage of a sole proprietorship?

A. Unlimited liability  

B. Easy to form and dissolve  

C. Shared profits  

**Answer: B. Easy to form and dissolve**

### 13. In which form of business organization is ownership and management usually separate?

A. Sole Proprietorship  

B. Partnership  

C. Company  

**Answer: C. Company**

### 14. A partner who only contributes capital but does not take part in the management is called:

A. Active Partner  

B. Sleeping Partner  

C. Nominal Partner  

**Answer: B. Sleeping Partner**

### 15. The maximum number of members in a private company is:

A. 20  

B. 50  

C. 200  

**Answer: C. 200**

### 16. A business organization formed by a group of people to promote the welfare of its members is called:

A. Corporation  

B. Cooperative Society  

C. Sole Proprietorship  

**Answer: B. Cooperative Society**

### 17. Which of the following is a feature of a Joint Hindu Family Business?

A. Managed by karta  

B. Liability of members is unlimited  

C. Members cannot inherit the business  

**Answer: A. Managed by karta**

### 18. A company whose shares are not offered to the general public is called a:

A. Public Company  

B. Private Company  

C. Cooperative Society  

**Answer: B. Private Company**

### 19. A partner who lends their name to the partnership but does not take an active role is called:

A. Active Partner  

B. Nominal Partner  

C. Dormant Partner  

**Answer: B. Nominal Partner**

### 20. A cooperative society is governed by the principle of:

A. Maximum profit  

B. One man, one vote  

C. Unlimited liability  

**Answer: B. One man, one vote**

### 21. In a company form of business, the top decision-making authority is the:

A. Board of Directors  

B. Managing Director  

C. Shareholders  

**Answer: A. Board of Directors**

### 22. The liability of the members in a cooperative society is:

A. Limited  

B. Unlimited  

C. Joint and several  

**Answer: A. Limited**

### 23. Which of the following is an example of a government-owned company?

A. Reliance Industries  

B. Indian Oil Corporation  

C. Tata Consultancy Services  

**Answer: B. Indian Oil Corporation**

### 24. Which form of business organization requires registration under the Companies Act?

A. Partnership  

B. Cooperative Society  

C. Company  

**Answer: C. Company**

### 25. Which of the following forms of business organization is NOT considered a legal entity separate from its owners?

A. Corporation  

B. Sole Proprietorship  

C. Limited Liability Partnership  

**Answer: B. Sole Proprietorship**

### 26. A company that sells shares to the public is referred to as:

A. Private Company  

B. Public Company  

C. Joint Venture  

**Answer: B. Public Company**

### 27. Which form of business organization combines the benefits of limited liability with the flexibility of a partnership?

A. Sole Proprietorship  

B. Limited Liability Partnership (LLP)  

C. Cooperative Society  

**Answer: B. Limited Liability Partnership (LLP)**

### 28. The document that defines the relationship between the company and outsiders is called:

A. Articles of Association  

B. Memorandum of Association  

C. Partnership Agreement  

**Answer: B. Memorandum of Association**

### 29. Which of the following is a disadvantage of a sole proprietorship?

A. Unlimited liability  

B. Difficulty in decision-making  

C. High cost of formation  

**Answer: A. Unlimited liability**

### 30. Which form of business organization is governed by the Indian Partnership Act, 1932?

A. Company  

B. Partnership  

C. Cooperative Society  

**Answer: B. Partnership**

-

general topics of "Evolution and Fundamentals of Business"

 Here are 30 multiple-choice questions (MCQs) based on the general topics of "Evolution and Fundamentals of Business" with answers included:

### 1. What is the primary objective of any business?

A. Providing employment  

B. Maximizing profit  

C. Social welfare  

**Answer: B. Maximizing profit**

### 2. Which of the following is a feature of business?

A. Involves risk  

B. No need for capital  

C. Not subject to laws  

**Answer: A. Involves risk**

### 3. The term "business" is derived from which word?

A. Busy  

B. Busyness  

C. Businessman  

**Answer: A. Busy**

### 4. The earliest form of business was based on:

A. Barter system  

B. Online trade  

C. Industrial production  

**Answer: A. Barter system**

### 5. Which of the following is NOT a classification of business activities?

A. Industry  

B. Commerce  

C. Insurance  

**Answer: C. Insurance**

### 6. Who defines business as “a continuous human activity directed towards producing or acquiring wealth through buying and selling of goods”?

A. Peter Drucker  

B. Wheeler  

C. Henry Fayol  

**Answer: B. Wheeler**

### 7. What is the primary characteristic of trade?

A. Risk-taking  

B. Buying and selling  

C. Production of goods  

**Answer: B. Buying and selling**

### 8. Which economic activity deals with the production, distribution, and consumption of goods and services?

A. Business  

B. Accounting  

C. Finance  

**Answer: A. Business**

### 9. Which one of the following is NOT a part of commerce?

A. Trade  

B. Warehousing  

C. Manufacturing  

**Answer: C. Manufacturing**

### 10. The evolution of business can be divided into how many stages?

A. Four  

B. Three  

C. Five  

**Answer: A. Four**

### 11. Which of the following is considered as the secondary sector in business?

A. Manufacturing  

B. Agriculture  

C. Mining  

**Answer: A. Manufacturing**

### 12. Which of the following is a part of tertiary sector?

A. Construction  

B. Banking  

C. Fishing  

**Answer: B. Banking**

### 13. Which of the following is an example of a business involved in the primary sector?

A. Retailing  

B. Agriculture  

C. Advertising  

**Answer: B. Agriculture**

### 14. What is meant by the term 'entrepreneurship'?

A. Risk-free business  

B. Employment for all  

C. Taking risks to start a new business  

**Answer: C. Taking risks to start a new business**

### 15. Which type of business involves the extraction of natural resources?

A. Tertiary  

B. Primary  

C. Secondary  

**Answer: B. Primary**

### 16. In which era did the industrial revolution begin?

A. 18th century  

B. 20th century  

C. 16th century  

**Answer: A. 18th century**

### 17. Which of the following is an intangible product?

A. Software  

B. Clothes  

C. Automobiles  

**Answer: A. Software**

### 18. Which of the following is an example of service business?

A. Banking  

B. Mining  

C. Manufacturing  

**Answer: A. Banking**

### 19. The term 'commerce' includes:

A. Production of goods  

B. Distribution and exchange of goods  

C. Agricultural activities  

**Answer: B. Distribution and exchange of goods**

### 20. Which business function is responsible for managing finances?

A. Human Resources  

B. Marketing  

C. Accounting  

**Answer: C. Accounting**

### 21. Which of the following is NOT a feature of a business?

A. Profit motive  

B. Certainty of returns  

C. Risk factor  

**Answer: B. Certainty of returns**

### 22. The process of transferring products from producers to consumers is known as:

A. Production  

B. Commerce  

C. Marketing  

**Answer: B. Commerce**

### 23. Which business activity includes branding and advertising?

A. Finance  

B. Human Resources  

C. Marketing  

**Answer: C. Marketing**

### 24. A business entity that focuses on selling to other businesses is known as:

A. B2C (Business to Consumer)  

B. B2B (Business to Business)  

C. B2G (Business to Government)  

**Answer: B. B2B (Business to Business)**

### 25. Which form of business is owned by shareholders?

A. Partnership  

B. Corporation  

C. Sole Proprietorship  

**Answer: B. Corporation**

### 26. The term “capital” in business refers to:

A. Human resources  

B. Financial resources  

C. Physical resources  

**Answer: B. Financial resources**

### 27. What is the key factor differentiating goods from services?

A. Goods are intangible, services are tangible  

B. Goods are tangible, services are intangible  

C. Both are intangible  

**Answer: B. Goods are tangible, services are intangible**

### 28. Which of the following is an example of e-commerce?

A. Physical stores  

B. Online shopping  

C. Factory production  

**Answer: B. Online shopping**

### 29. Which function of business is concerned with recruitment and training?

A. Marketing  

B. Finance  

C. Human Resources  

**Answer: C. Human Resources**

### 30. The fu

ndamental business strategy aimed at gaining a competitive advantage in the market is called:

A. Marketing  

B. Corporate strategy  

C. Branding  

**Answer: B. Corporate strategy

SAQs 1)Introduction to Accounting" and 2)"Journal, Ledger, Trial Balance":

 Here are 25 short answer-type questions with answers from the chapters 1)Introduction to Accounting" and 2)"Journal, Ledger, Trial Balance":

### 1. **Introduction to Accounting**

---

**Q1.** What is accounting?  

**A1.** Accounting is the process of recording, summarizing, analyzing, and reporting financial transactions of a business.

**Q2.** What are the primary objectives of accounting?  

**A2.** The objectives of accounting are to maintain systematic records, determine profit or loss, ascertain financial position, and provide information for decision-making.

**Q3.** Define bookkeeping.  

**A3.** Bookkeeping is the recording of financial transactions in a systematic manner, forming a part of the accounting process.

**Q4.** What is the difference between bookkeeping and accounting?  

**A4.** Bookkeeping involves recording financial transactions, while accounting includes recording, classifying, summarizing, and interpreting the financial data.

**Q5.** Name the main branches of accounting.  

**A5.** The main branches are financial accounting, cost accounting, management accounting, and tax accounting.

**Q6.** What is the accounting equation?  

**A6.** The accounting equation is: **Assets = Liabilities + Equity**.

**Q7.** What are assets?  

**A7.** Assets are resources owned by a business that are expected to bring future economic benefits.

**Q8.** Define liabilities.  

**A8.** Liabilities are obligations or debts that a business owes to outsiders, which must be settled in the future.

**Q9.** What is capital in accounting terms?  

**A9.** Capital refers to the amount invested by the owner(s) in the business and is represented by the owner’s equity in the firm.

**Q10.** What are revenues?  

**A10.** Revenues are the earnings of a business from the sale of goods or services.

**Q11.** What is the accrual concept in accounting?  

**A11.** The accrual concept states that revenue and expenses should be recorded when they are earned or incurred, regardless of when the cash is received or paid.

**Q12.** Explain the matching principle.  

**A12.** The matching principle dictates that expenses should be recorded in the same period as the revenues they help generate.

**Q13.** What is GAAP?  

**A13.** GAAP stands for Generally Accepted Accounting Principles, which are the standard guidelines for financial accounting.

**Q14.** Define financial statements.  

**A14.** Financial statements are formal reports of the financial activities of a business, including the balance sheet, income statement, and cash flow statement.

**Q15.** What is the going concern concept?  

**A15.** The going concern concept assumes that a business will continue to operate indefinitely, unless there is evidence to the contrary.

**Q16.** What is a balance sheet?  

**A16.** A balance sheet is a financial statement that shows a company’s assets, liabilities, and capital at a specific point in time.

**Q17.** What is the difference between current and non-current assets?  

**A17.** Current assets are those expected to be converted into cash within a year, while non-current assets are long-term resources, such as property or equipment.

**Q18.** Define depreciation.  

**A18.** Depreciation is the systematic allocation of the cost of a tangible asset over its useful life.

**Q19.** What are the types of accounting errors?  

**A19.** The types of accounting errors include errors of omission, errors of commission, and compensating errors.

**Q20.** What is the role of accounting in decision-making?  

**A20.** Accounting provides financial information that helps stakeholders make informed decisions regarding investments, operations, and management.

**Q21.** What is the prudence concept?  

**A21.** The prudence concept states that one should not overestimate income or assets, and all potential losses should be accounted for.

**Q22.** What is a trial balance?  

**A22.** A trial balance is a statement that lists all the ledger accounts and their balances at a particular date to check the arithmetical accuracy of the books.

**Q23.** What are the qualitative characteristics of accounting information?  

**A23.** The qualitative characteristics are relevance, reliability, comparability, and understandability.

**Q24.** Define an income statement.  

**A24.** An income statement is a financial report that shows the revenue and expenses of a business for a specific period, indicating profit or loss.

**Q25.** What is double-entry bookkeeping?  

**A25.** Double-entry bookkeeping is a system of accounting where every transaction is recorded in at least two accounts, involving a debit in one and a credit in another.

---

2. Journal, Ledger, Trial Balance

Q1. What is a journal in accounting?  

**A1.** A journal is a chronological record of financial transactions, also known as the book of original entry.

**Q2.** What is the purpose of a journal entry?  

**A2.** A journal entry records the dual aspect of a transaction (debit and credit) and initiates the process of recording it in the ledger.

**Q3.** Define ledger.  

**A3.** A ledger is a book or computerized record where all the journal entries related to a particular account are summarized.

**Q4.** What is posting in accounting?  

**A4.** Posting is the process of transferring the entries from the journal to the respective accounts in the ledger.

**Q5.** What is a compound journal entry?  

**A5.** A compound journal entry involves more than one debit or credit account in a single transaction.

**Q6.** Explain the format of a journal entry.  

**A6.** A journal entry format includes the date, the accounts to be debited and credited, the amounts, and a brief description of the transaction.

**Q7.** What is the rule of debit and credit for assets?  

**A7.** The rule is: debit an increase in assets, and credit a decrease in assets.

**Q8.** What is the rule of debit and credit for liabilities?  

**A8.** The rule is: debit a decrease in liabilities, and credit an increase in liabilities.

**Q9.** Why is a ledger referred to as the "principal book"?  

**A9.** The ledger is called the "principal book" because it contains all the information necessary to prepare financial statements.

**Q10.** What is a trial balance used for?  

**A10.** A trial balance is used to ensure that total debits equal total credits, thus checking the accuracy of the ledger accounts.

**Q11.** Define the cash book.  

**A11.** A cash book is a specialized journal that records all cash receipts and payments.

**Q12.** What is a subsidiary ledger?  

**A12.** A subsidiary ledger contains detailed information about specific accounts, such as accounts receivable or payable, which are summarized in the general ledger.

**Q13.** What are closing entries?  

**A13.** Closing entries are journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts.

**Q14.** What is an adjusted trial balance?  

**A14.** An adjusted trial balance is prepared after adjusting entries are made, ensuring that the ledger accounts are up-to-date.

**Q15.** Define suspense account.  

**A15.** A suspense account is a temporary account used to record discrepancies or incomplete transactions until they can be properly classified.

**Q16.** What is meant by rectification of errors?  

**A16.** Rectification of errors involves correcting mistakes made in the books of accounts.

**Q17.** What is the importance of the journal in accounting?  

**A17.** The journal is important because it ensures that every transaction is recorded in chronological order, with both debit and credit aspects.

**Q18.** What is a ledger folio?  

**A18.** A ledger folio is the page number of the ledger where the journal entry is posted, serving as a reference.

**Q19.** What is a contra entry?  

**A19.** A contra entry involves a transaction that affects both sides of the cash book, such as cash withdrawn from the bank.

**Q20.** What is the format of a trial balance?  

**A20.** A trial balance is formatted with two columns: one for debit balances and the other for credit balances.

**Q21.** Explain the term "debit balance."  

**A21.** A debit balance means that the total debits in an account exceed the total credits.

**Q22.** What is a credit balance?  

**A22.** A credit balance means that the total credits in an account exceed the total debits.

**Q23.** What is an opening entry?  

**A23.** An opening entry is the first journal entry made in a new accounting period to record the balances carried over from the previous period.

**Q24.** Define balancing of ledger accounts.  

**A24.** Balancing of ledger accounts involves finding the difference between the total debits and total credits and bringing down the balance for the next period.

**Q25.** What is the purpose of the genera

l journal?  

**A25.** The general journal records non-recurring transactions that do not fit into specialized journals, such as adjusting or closing entries.

(MCQs) with answer from Introduction to Computerized Accounting System (CAS

 

SBSIRCOMMERCE PRESENT 

Here are 40 multiple-choice questions (MCQs) with answer from Introduction to Computerized Accounting System (CAS)**

Introduction to Computerized Accounting System (CAS)**

1. What is the primary function of a computerized accounting system (CAS)?

   - a) Data storage

   - b) Inventory control

   - c) Recording, processing, and generating financial information

   - d) Payroll management  

   **Answer: c) Recording, processing, and generating financial information**

2. Which of the following is NOT a component of CAS?

   - a) Hardware

   - b) Software

   - c) Accounting standards

   - d) People  

   **Answer: c) Accounting standards**

3. **Which of the following is an advantage of CAS?**

   - a) Prone to manual errors

   - b) Time-consuming

   - c) Faster data processing

   - d) Limited to large organizations  

   **Answer: c) Faster data processing**

4. **What is a limitation of CAS?**

   - a) Reduces data accuracy

   - b) Requires constant electricity supply

   - c) Eliminates the need for accountants

   - d) Has no training requirement  

   **Answer: b) Requires constant electricity supply**

5. **Which of the following is NOT a feature of CAS?**

   - a) Data redundancy

   - b) Real-time data processing

   - c) Automated report generation

   - d) Backup and security features  

   **Answer: a) Data redundancy**

6. Accounting Information System (AIS) helps in:**

   - a) Automating payroll processes

   - b) Storing inventory data

   - c) Collecting, storing, and processing financial data

   - d) Managing employee records  

   **Answer: c) Collecting, storing, and processing financial data**

7. What is the role of Management Information System (MIS)?**

   - a) To track employee attendance

   - b) To support decision-making by providing relevant data

   - c) To handle banking transactions

   - d) To manage customer relationships  

   **Answer: b) To support decision-making by providing relevant data.

8. **Which of the following is used to ensure that total debits equal total credits in the accounting records?**

   - a) Balance Sheet

   - b) Trial Balance

   - c) Profit and Loss Account

   - d) Cash Flow Statement  

   **Answer: b) Trial Balance**

9. **In which financial statement is net income or net loss calculated?**

   - a) Trial Balance

   - b) Profit and Loss Account

   - c) Balance Sheet

   - d) Cash Flow Statement  

   **Answer: b) Profit and Loss Account**

10. **A Balance Sheet reflects:**

    - a) Revenue and expenses

    - b) Cash inflows and outflows

    - c) Assets, liabilities, and equity

    - d) All business transactions  

    **Answer: c) Assets, liabilities, and equity**

11. **Spreadsheets are commonly used for:**

    - a) Preparing financial statements

    - b) Making payments to suppliers

    - c) Conducting market research

    - d) Hiring employees  

    **Answer: a) Preparing financial statements

12. **Which of the following is an advantage of computerized accounting over manual accounting?**

    - a) Easier to make mistakes

    - b) Slower processing of data

    - c) Faster access to financial reports

    - d) No need for backups  

    **Answer: c) Faster access to financial reports**

13. **Manual accounting requires:**

    - a) Specialized software

    - b) Ledger books and calculators

    - c) High-level programming knowledge

    - d) Automatic report generation  

    **Answer: b) Ledger books and calculators**

14. **One disadvantage of manual accounting is:**

    - a) Increased data security

    - b) Limited scope for errors

    - c) Time-consuming and prone to mistakes

    - d) Cost-effective  

    **Answer: c) Time-consuming and prone to mistakes**

15. In computerized accounting, the risk of losing data can be mitigated by:

    - a) Using ledger books

    - b) Regular data backups

    - c) Keeping hard copies of all records

    - d) Relying on manual entries  

    **Answer: b) Regular data backups**

16. Which of the following is a key factor when selecting an accounting software package?

    - a) Brand popularity

    - b) Compatibility with organizational needs

    - c) Number of available themes

    - d) Size of the software installation file  

    **Answer: b) Compatibility with organizational needs**

17. **Which factor is least important when selecting accounting software for a small business?**

    - a) User-friendliness

    - b) Scalability

    - c) Ability to handle multiple currencies

    - d) Cost  

    **Answer: c) Ability to handle multiple currencies**

18. **For a large corporation with complex needs, the best type of accounting software would be:**

    - a) Ready-to-use

    - b) Customized

    - c) Tailor-made

    - d) Freeware  

    **Answer: c) Tailor-made**

19. **Which of the following is a disadvantage of selecting unsuitable accounting software?**

    - a) High productivity

    - b) Ease of use

    - c) Financial reporting inaccuracies

    - d) Enhanced security  

    **Answer: c) Financial reporting inaccuracies**

20. **Which of the following is an example of ready-to-use accounting software?**

    - a) Tally

    - b) SAP

    - c) Oracle

    - d) Excel  

    **Answer: a) Tally**

21. **Tailor-made accounting software is best suited for:**

    - a) Small retail stores

    - b) Large businesses with unique requirements

    - c) Freelancers

    - d) Startups  

    **Answer: b) Large businesses with unique requirements**

22. **A customized accounting system is:**

    - a) Designed for general use

    - b) Built to suit the specific needs of an organization

    - c) Free for small businesses

    - d) Limited to non-profit organizations  

    **Answer: b) Built to suit the specific needs of an organization**

23. **The major disadvantage of tailor-made accounting software is:**

    - a) Its flexibility

    - b) The cost involved in development and maintenance

    - c) High speed of processing

    - d) Limited features  

    **Answer: b) The cost involved in development and maintenance**

24. **Ready-to-use accounting software is characterized by:**

    - a) Limited customization options

    - b) High cost and complexity

    - c) Inability to handle multiple clients

    - d) Exclusivity to large businesses  

    **Answer: a) Limited customization options**

25. **Which of the following is NOT an advantage of computerized accounting software?**

    - a) Real-time data access

    - b) Data redundancy

    - c) Automated financial reporting

    - d) Accurate data processing  

    **Answer: b) Data redundancy

26. **Which of the following factors affects the selection of an accounting software package?**

    - a) Organizational size and complexity

    - b) The color of the interface

    - c) Internet speed

    - d) Social media presence of the software  

    **Answer: a) Organizational size and complexity**

27. **An organization with a limited budget should consider:**

    - a) Tailor-made software

    - b) A free or low-cost ready-to-use software

    - c) Hiring a large development team

    - d) Customized software only  

    **Answer: b) A free or low-cost ready-to-use software**

28. **Which of the following types of businesses is most likely to use a customized accounting system?**

    - a) A small grocery store

    - b) A global corporation with diverse operations

    - c) A freelancer

    - d) A new startup  

    **Answer: b) A global corporation with diverse operations**

29. **Scalability in accounting software refers to:**

    - a) The ability to change its appearance

    - b) The software’s capacity to handle growing business needs

    - c) The price of the software

    - d) Its ability to work without internet  

    **Answer: b) The software’s capacity to handle growing business needs**

30. **Which of the following is NOT typically a consideration when selecting accounting software?**

    - a) Data security

    - b) Ease of use

    - c) The number of employees in the software development team

    - d) Integration with other business systems  

    **Answer: c) The number of employees in the software development team

31. **Which of the following best describes the term "real-time processing" in CAS?**

   - a) Data is processed at a specific scheduled time

   - b) Data is processed immediately as transactions occur

   - c) Data is processed manually

   - d) Data is processed monthly  

   **Answer: b) Data is processed immediately as transactions occur**

32. **Which of the following is a key advantage of using CAS over manual accounting systems?**

   - a) Lower implementation costs

   - b) Easier data retrieval and report generation

   - c) Lower training requirements

   - d) Minimal software updates  

   **Answer: b) Easier data retrieval and report generation**

33. **Which of the following accounting processes can be automated with CAS?**

   - a) Budgeting and forecasting

   - b) Customer relationship management

   - c) Payroll and tax calculations

   - d) Legal compliance procedures  

   **Answer: c) Payroll and tax calculations**

34. **One of the key differences between manual and computerized accounting is:**

   - a) Computerized accounting is more prone to errors

   - b) Manual accounting offers faster processing

   - c) Computerized accounting allows for automation of repetitive tasks

   - d) Manual accounting has built-in error detection systems  

   **Answer: c) Computerized accounting allows for automation of repetitive tasks**

35. **Which of the following is a challenge faced in manual accounting?**

   - a) Automation of ledger entries

   - b) Difficulty in maintaining records as business grows

   - c) Availability of financial reports in real-time

   - d) Easy backup and recovery of data  

   **Answer: b) Difficulty in maintaining records as business grows**

36. **Which of the following factors would most likely influence a small business when choosing accounting software?**

   - a) High scalability

   - b) Complex customization options

   - c) Ease of use and low cost

   - d) Ability to manage global transactions  

   **Answer: c) Ease of use and low cost**

37. **The ability of accounting software to integrate with other business applications is important because:**

   - a) It reduces software licensing costs

   - b) It eliminates the need for financial reports

   - c) It allows seamless sharing of data across different systems

   - d) It helps in reducing data security risks  

   **Answer: c) It allows seamless sharing of data across different systems**

38. **One disadvantage of a ready-to-use accounting system is:**

   - a) High implementation cost

   - b) Inability to customize according to specific business needs

   - c) Requires in-depth programming knowledge

   - d) Does not support financial report generation  

   **Answer: b) Inability to customize according to specific business needs**

39. Customized accounting software is best suited for businesses that:**

   - a) Require quick deployment with standard features

   - b) Have highly specific and unique accounting needs

   - c) Have limited financial transactions

   - d) Prefer free software options  

   **Answer: b) Have highly specific and unique accounting needs.

40. **Tally is an example of:**

   - a) Tailor-made accounting software

   - b) Ready-to-use accounting software

   - c) Customized accounting software

   - d) Spreadsheet software  

   **Answer: b) Ready-to-use accounting software**

MCQs Depreciation

 Here is a set of 30 MCQs from the chapter on Depreciation for Accountancy .

---

1. **Depreciation is applicable to which of the following assets?**  

   a) Current Assets  

   b) Fixed Assets  

   c) Liquid Assets  

   d) None of the above  

   **Answer:** b) Fixed Assets

2. **Depreciation refers to the __________ in the value of an asset.**  

   a) Appreciation  

   b) Decrease  

   c) Constant  

   d) Increase  

   **Answer:** b) Decrease

3. **Which method of depreciation assumes equal wear and tear of the asset over its useful life?**  

   a) Diminishing Balance Method  

   b) Straight-Line Method  

   c) Sum of the Years' Digits Method  

   d) None of the above  

   **Answer:** b) Straight-Line Method

4. **Which method calculates depreciation based on the book value of an asset?**  

   a) Written Down Value Method  

   b) Straight-Line Method  

   c) Annuity Method  

   d) Sinking Fund Method  

   **Answer:** a) Written Down Value Method

5. **Under which method does the amount of depreciation decrease every year?**  

   a) Straight-Line Method  

   b) Diminishing Balance Method  

   c) Sum of the Years' Digits Method  

   d) None of the above  

   **Answer:** b) Diminishing Balance Method

6. **The amount of depreciation remains the same every year under which method?**  

   a) Straight-Line Method  

   b) Written Down Value Method  

   c) Double Declining Balance Method  

   d) None of the above  

   **Answer:** a) Straight-Line Method

7. **Which of the following is *not* a cause of depreciation?**  

   a) Wear and tear  

   b) Obsolescence  

   c) Maintenance  

   d) Exhaustion of natural resources  

   **Answer:** c) Maintenance

8. **Depreciation is charged to __________.**  

   a) Profit and Loss Account  

   b) Trading Account  

   c) Balance Sheet  

   d) Capital Account  

   **Answer:** a) Profit and Loss Account

9. **Which of the following is an example of intangible assets?**  

   a) Machinery  

   b) Furniture  

   c) Goodwill  

   d) Inventory  

   **Answer:** c) Goodwill

10. **In which method does the depreciation amount change each year, but the total depreciation over the asset's life remains the same?**  

   a) Straight-Line Method  

   b) Units of Production Method  

   c) Diminishing Balance Method  

   d) Written Down Value Method  

   **Answer:** d) Written Down Value Method

11. **Which accounting concept requires the recording of depreciation?**  

   a) Going Concern Concept  

   b) Accrual Concept  

   c) Prudence Concept  

   d) Cost Concept  

   **Answer:** a) Going Concern Concept

12. **The formula for calculating depreciation under the straight-line method is:**  

   a) (Cost of Asset - Scrap Value) / Useful Life  

   b) (Cost of Asset + Scrap Value) / Useful Life  

   c) (Cost of Asset - Accumulated Depreciation) / Useful Life  

   d) None of the above  

   **Answer:** a) (Cost of Asset - Scrap Value) / Useful Life

13. **What is the objective of providing depreciation?**  

   a) To account for the decrease in market value  

   b) To match revenue with the cost of using an asset  

   c) To increase the value of the asset  

   d) To estimate future replacement costs  

   **Answer:** b) To match revenue with the cost of using an asset

14. **Accumulated depreciation appears in the balance sheet as a __________.**  

   a) Current Liability  

   b) Current Asset  

   c) Deduction from the fixed asset  

   d) Contingent Liability  

   **Answer:** c) Deduction from the fixed asset

15. **Which of the following is true regarding depreciation?**  

   a) It is a cash expense  

   b) It reflects the physical deterioration of an asset  

   c) It increases the value of the asset  

   d) It is provided only in the year of purchase  

   **Answer:** b) It reflects the physical deterioration of an asset

16. **Which method of depreciation provides for a higher depreciation charge in the earlier years?**  

   a) Straight-Line Method  

   b) Double Declining Balance Method  

   c) Annuity Method  

   d) Revaluation Method  

   **Answer:** b) Double Declining Balance Method

17. **Which method is based on the usage or output of the asset?**  

   a) Straight-Line Method  

   b) Written Down Value Method  

   c) Units of Production Method  

   d) Sinking Fund Method  

   **Answer:** c) Units of Production Method

18. **Under which method does the residual value of the asset remain constant over the years?**  

   a) Written Down Value Method  

   b) Straight-Line Method  

   c) Units of Production Method  

   d) Revaluation Method  

   **Answer:** b) Straight-Line Method

19. **Depreciation charged on a revalued asset is based on the __________.**  

   a) Original cost  

   b) Market price  

   c) Revalued amount  

   d) Salvage value  

   **Answer:** c) Revalued amount

20. **The diminishing balance method is also known as:**  

   a) Reducing Balance Method  

   b) Straight-Line Method  

   c) Annuity Method  

   d) Sum of Years' Digits Method  

   **Answer:** a) Reducing Balance Method

21. **Which of the following is not considered while calculating depreciation?**  

   a) Original cost of the asset  

   b) Useful life of the asset  

   c) Market value of the asset  

   d) Residual value  

   **Answer:** c) Market value of the asset

22. **Which method does not use time as a basis for charging depreciation?**  

   a) Straight-Line Method  

   b) Units of Production Method  

   c) Double Declining Balance Method  

   d) Written Down Value Method  

   **Answer:** b) Units of Production Method

23. **What is the correct treatment of depreciation in financial statements?**  

   a) It is debited to the capital account  

   b) It is shown as an asset in the balance sheet  

   c) It is deducted from the asset's value in the balance sheet  

   d) It is added to the value of the asset  

   **Answer:** c) It is deducted from the asset's value in the balance sheet

24. **Obsolescence as a cause of depreciation refers to:**  

   a) Wear and tear due to use  

   b) Reduction in usefulness due to technological advancement  

   c) Exhaustion of natural resources  

   d) Maintenance of assets  

   **Answer:** b) Reduction in usefulness due to technological advancement

25. **Which of the following methods provides a decreasing charge for depreciation over the useful life of the asset?**  

   a) Straight-Line Method  

   b) Sum of the Years' Digits Method  

   c) Revaluation Method  

   d) None of the above  

   **Answer:** b) Sum of the Years' Digits Method

26. **The residual value is the estimated amount that can be recovered from an asset at the end of its useful life after deducting depreciation. This statement is:**  

   a) True  

   b) False  

   **Answer:** a) True

27. **When is depreciation accounted for in financial statements?**  

   a) Only at the time of sale  

   b) At the end of each accounting period  

   c) When the asset is fully depreciated  

   d) Only when required by law  

   **Answer:** b) At the end of each accounting period

28. **Which of the following is an indirect expense in the Profit and Loss Account?**  

   a) Purchase of goods  

   b) Wages  

   c) Depreciation  

   d) Rent received  

   **Answer:** c) Depreciation

29. **An asset costing Rs. 10,000 has a useful life of 5 years and a residual value of Rs. 1,000. The annual depreciation under the straight-line method will be:**  

   a) Rs. 1,800  

   b) Rs. 1,500  

   c) Rs. 2,000  

   d) Rs. 1,900  

   **Answer

:** d) Rs. 1,800

30. **Depreciation is considered as which type of cost?**  

   a) Variable Cost  

   b) Fixed Cost  

   c) Semi-Variable Cost  

   d) None of the above  

   **Answer:** b) Fixed Cost

-

MCQs Trading,P/L ,B/S

 20 multiple-choice questions (MCQs) based on the chapter of Trading, Profit & Loss Account, and Balance Sheet 

SBSIRCOMMERCE PRESENT 

### 1. **What is the main objective of preparing a Trading Account?**

   - a) To ascertain net profit

   - b) To determine gross profit or gross loss

   - c) To calculate net worth

   - d) To assess capital employed  

   **Answer:** b) To determine gross profit or gross loss

---

### 2. **Wages paid for factory workers are shown in which account?**

   - a) Profit & Loss Account

   - b) Balance Sheet

   - c) Trading Account

   - d) Cash Flow Statement  

   **Answer:** c) Trading Account

---

### 3. **Which of the following is NOT a part of the Balance Sheet?**

   - a) Capital

   - b) Stock

   - c) Gross Profit

   - d) Debtors  

   **Answer:** c) Gross Profit

---

### 4. **Where are closing stock values shown in the financial statements?**

   - a) Trading Account (debit side) and Profit & Loss Account

   - b) Trading Account (credit side) and Balance Sheet (assets side)

   - c) Only in Profit & Loss Account

   - d) Only in Balance Sheet  

   **Answer:** b) Trading Account (credit side) and Balance Sheet (assets side)

---

### 5. **Which of the following is an indirect expense?**

   - a) Wages

   - b) Salaries

   - c) Carriage Inwards

   - d) Factory Rent  

   **Answer:** b) Salaries

---

### 6. **In which account is the adjustment of bad debts made?**

   - a) Trading Account

   - b) Profit & Loss Account

   - c) Balance Sheet (Liabilities Side)

   - d) Trading Account (Credit Side)  

   **Answer:** b) Profit & Loss Account

---

### 7. **What is the formula to calculate Gross Profit?**

   - a) Net Sales - Cost of Goods Sold

   - b) Net Sales - Opening Stock

   - c) Purchases - Direct Expenses

   - d) Net Sales - Closing Stock  

   **Answer:** a) Net Sales - Cost of Goods Sold

---

### 8. **Where is prepaid insurance recorded in the Balance Sheet?**

   - a) Current Liabilities

   - b) Fixed Assets

   - c) Current Assets

   - d) Long-term Liabilities  

   **Answer:** c) Current Assets

---

### 9. **Which account shows both the net profit and net loss of a business?**

   - a) Trading Account

   - b) Profit & Loss Account

   - c) Balance Sheet

   - d) Capital Account  

   **Answer:** b) Profit & Loss Account

---

### 10. **Which of the following is treated as a liability?**

   - a) Prepaid expenses

   - b) Outstanding expenses

   - c) Closing stock

   - d) Capital  

   **Answer:** b) Outstanding expenses

---

### 11. **Interest received on investments is shown in which account?**

   - a) Trading Account

   - b) Profit & Loss Account (Credit Side)

   - c) Balance Sheet (Liabilities Side)

   - d) Balance Sheet (Assets Side)  

   **Answer:** b) Profit & Loss Account (Credit Side)

---

### 12. **Which of the following will be shown on the debit side of the Trading Account?**

   - a) Sales

   - b) Purchases Returns

   - c) Carriage Inwards

   - d) Discount Received  

   **Answer:** c) Carriage Inwards

---

### 13. **Net Profit is transferred to which account at the end of the financial year?**

   - a) Trading Account

   - b) Profit & Loss Account

   - c) Balance Sheet (Liabilities Side)

   - d) Capital Account  

   **Answer:** d) Capital Account

---

### 14. **What is the treatment of depreciation in the financial statements?**

   - a) Shown in Trading Account

   - b) Shown as an asset in the Balance Sheet

   - c) Shown as an expense in the Profit & Loss Account

   - d) Added to the cost of fixed assets  

   **Answer:** c) Shown as an expense in the Profit & Loss Account

---

### 15. **Which of the following is considered a fictitious asset?**

   - a) Goodwill

   - b) Discount on issue of shares

   - c) Cash in hand

   - d) Debtors  

   **Answer:** b) Discount on issue of shares

---

### 16. **The portion of profit not distributed to shareholders is called?**

   - a) Dividends

   - b) Retained Earnings

   - c) Reserves and Surplus

   - d) Capital  

   **Answer:** b) Retained Earnings

---

### 17. **Which of the following is an example of direct expenses?**

   - a) Office rent

   - b) Carriage Outwards

   - c) Factory Rent

   - d) Bank Charges  

   **Answer:** c) Factory Rent

---

### 18. **Which of the following is NOT a liability?**

   - a) Creditors

   - b) Debtors

   - c) Outstanding Rent

   - d) Bills Payable  

   **Answer:** b) Debtors

---

### 19. **Which of the following is deducted from gross profit to determine net profit?**

   - a) Carriage Inwards

   - b) Carriage Outwards

   - c) Wages

   - d) Purchases  

   **Answer:** b) Carriage Outwards

---

### 20. **The net worth of a company is represented by:**

   - a) Fixed Assets - Current Liabilities

   - b) Total Assets - Total Liabilities

   - c) Current Assets - Current Liabilities

   - d) Current Liabilities + C

apital  

   **Answer:** b) Total Assets - Total Liabilities

---

These MCQs cover key concepts related to Trading, Profit & Loss Account, and Balance Sheet topics in Accountancy.