Financial Accounting MCQ
Multiple Choice Questions and Answers
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A. No entry is passed in the books of the consignor
B. Entry is passed in the books of both the consignor and the consignee
C. Entry is passed in the books of only the consignor
D. Entry is passed in the books of either the consignor or the consignee.
ANS: B
2 In Consignment Accounts, Bad debts are ___________.
A. Debited to general commission A/c and credited to consignment Debtor's A/c, when there is no del credere commission.
B. Debited to consignment debtors A/c and credited to Consignor's A/c, when there is no del credere commission
C. No entry is passed
D. Debited to Consignor's A/c and credited to Consignment Debtor's A/c, when there is no del credere commission
ANS: D
3 In consignment Accounting, to consign means _________.
A. to receive
B. to purchase
C. to send
D. to transfer
ANS: C
4 In consignment Accounting, if discount is treated as "Consignment expenses" it is debited to ___________.
A. Consignee A/c
B. Consignment A/c
C. Profit & loss A/c
D. Consignor A/c
ANS: B
5 If the consignor carries on Trading business, then the balance of goods sent on consignment A/c is transferred to __________.
A. Profit & loss A/c
B. Trading A/c
C. Purchase A/c
D. Consignment A/c
ANS: C
6 Closing stock with consignee is shown in the Balance sheet of ___________.
A. Consignee
B. Consignor
C. Agency
D. Profit
ANS: B
7 When the consignor sends goods to consignee he prepares a __________.
A. Account sales
B. Cash memo
C. Proforma Invoice
D. Credit memo
ANS: C
8 Del credere commission is paid then
__________ A/c should be debited for credit sales.
A. Consigneee
B. Consignment
C. Consignment
D. Debtors Consignor
ANS: A
9 Consignor sends to consignee __________.
A. Sales A/c
B. Account Sales
C. Proforma Invoice
D. Invoice
ANS: C
10 Unless otherwise agreed, Del-credere is allowed on _______.
A. Net sales
B. Gross sales
C. Gross credit sales
D. Net Credit sales
ANS: A
11 Which of the following statement is not True ?
A. If Del-credere commission is allowed, bad debt will not be recorded in the books of consignor
B. If Del-credere commission is allowed, bad debt will be debited in consignment account
C. Del-credere commission is allowed by consignor to consignee
D. Del-credere commission is generally relevant for credit sales
ANS: B
12 For recording closing stock held by consignee which account must be debited _______.
A. Consignment A/c
B. Consignee A/c
C. Sales A/c
D. Consignment stock A/c
ANS: D
13 With reference to consignment, loading is the difference between ________.
A. Selling price and cost price
B. Selling Price and Invoice price
C. Invoice price and cost price
D. Invoice price and Net realisable value
ANS: C
14 The owner of the consignment stock is ___________.
A. Consignor
B. Consignee
C. Debtors
D. Suppliers
ANS: A
15 Which of the following expenses is not considered as part of cost of stock ?
A. Packing, loading and insurance paid by the consignor
B. Inward consignment freight paid by the consignee
C. Transport charges upto godown paid by consignee
D. Insurance charges paid by consignee
ANS: D
16 Head Office at Mumbai keeps a single 'Pune Branch A/c' which is used to record all items relating to the branch.
A. Pune branch is an independent branch whose accounts are kept under the 'Debtors' method.
B. Pune branch is dependent branch whose accounts are kept under the 'Debtors' method.
C. Pune branch is a dependent branch whose accounts are kept under the 'Stock and Debtors' method.
D. Pune branch is a independent branch whose accounts are kept under the 'Stock and Debtors' method.
ANS: B
17 The following entry is passed for a dependent branch at Pune following the Debtors method -
Goods sent to Pune Branch A/c…....................................................Dr
To Pune Branch A/c
A. This entry may indicate - Goods returned to HO by the Pune Branch
B. Goods returned to HO directly by the Pune branch customers
C. Goods sent by Pune branch to another branch
D. All of the above
ANS: D
18 The Head office sends goods to its branch at a loading of 25% on sales
A. The loading is 1/3rd of cost
B. The loading is 1/4th of cost
C. The loading is 50% of cost
D. The loading 20% of sales
ANS: A
19 The following entry is passed for a dependent branch at Pune following the Debtors method -
Pune Branch A/c…....................................................Dr
To Goods sent to Pune Branch A/c
This entry may indicate -
A. Goods sent to Pune branch by Head office
B. Goods sends to Pune Branch by another branch
C. Either Goods sent to Pune branch by Head office or Goods sends to Pune Branch by another branch
D. Neither Goods sent to Pune branch by Head office nor Goods sends to Pune Branch by another branch
ANS: C
20 The following entry is passed for a dependent branch at Pune following the Debtors method -
Pune Branch A/c…....................................................Dr
To Cash / Bank A/c
This entry may indicate -
A. Cash sent to Pune Branch by HO
B. Cash received from Pune branch by another branch
C. Cash received from Pune branch by HO
D. Expenses of HO paid by Pune branch
ANS: A
21 Under the 'Debtor' method, closing balance in the Branch account indicates
A. amount due from the branch
B. Profit or loss at the branch
C. Closing stock at the branch
D. Opening stock at the branch
ANS: B
22 Under the 'Debtor' method, Goods returned by debtors to branch
A. Will not be recorded by the HO in the Branch A/c
B. Will be debited to Goods sent Branch A/c and credited to the Branch A/c
C. Will be debited to Goods sent Branch A/c and credited to the Branch Debtors A/c
D. Will be debited to Branch Stock A/c and credited to the Branch Debtors A/c
ANS: A
23 When the Head office sends the goods at invoice price to dependent branch, the Head office opens the following accounts for that branch in its books under the Debtors method
A. Branch A/c b. Goods sent to Branch A/c c. Branch stock A/c
B. Branch A/c b. Goods sent to Branch A/c c. Branch Debtors A/c
C. Branch A/c b. Goods sent to Branch A/c
D. Branch A/c b. Goods sent to Branch A/c c. Stock Reserve A/c
ANS: D
24 When the Head Office sends the goods at Invoice price to a dependent branch, the loading on goods sent by HO to branch is adjusted by passing the following entry
A. Branch A/c _______________ Dr
To Stock reserve A/c
B. Goods sent to branch A/c___________Dr
To Branch A/c
C. Stock Reserve A/c ______________Dr
To Branch A/c
D. Branch A/c ______ Dr
To Goods sent to Branch A/c
ANS: B
25 Head office sends the goods at invoice price to a dependent branch. The total of Cash remitted to HO ANS: Cash balance with branch ANS: Closing stock with branch (at invoice price) is more than the total (at invoice price) of Opening stock with branch and goods sent to branch. This indicates
A. Likely fraud / error involving cash and / or stock
B. Cash and stock on the last day of the year with the branch
C. Profit for the year earned by the branch
D. Loss for the year recorded by the branch
A. Consigneee
B. Consignment
C. Consignment
D. Debtors Consignor
ANS: A
9 Consignor sends to consignee __________.
A. Sales A/c
B. Account Sales
C. Proforma Invoice
D. Invoice
ANS: C
10 Unless otherwise agreed, Del-credere is allowed on _______.
A. Net sales
B. Gross sales
C. Gross credit sales
D. Net Credit sales
ANS: A
11 Which of the following statement is not True ?
A. If Del-credere commission is allowed, bad debt will not be recorded in the books of consignor
B. If Del-credere commission is allowed, bad debt will be debited in consignment account
C. Del-credere commission is allowed by consignor to consignee
D. Del-credere commission is generally relevant for credit sales
ANS: B
12 For recording closing stock held by consignee which account must be debited _______.
A. Consignment A/c
B. Consignee A/c
C. Sales A/c
D. Consignment stock A/c
ANS: D
13 With reference to consignment, loading is the difference between ________.
A. Selling price and cost price
B. Selling Price and Invoice price
C. Invoice price and cost price
D. Invoice price and Net realisable value
ANS: C
14 The owner of the consignment stock is ___________.
A. Consignor
B. Consignee
C. Debtors
D. Suppliers
ANS: A
15 Which of the following expenses is not considered as part of cost of stock ?
A. Packing, loading and insurance paid by the consignor
B. Inward consignment freight paid by the consignee
C. Transport charges upto godown paid by consignee
D. Insurance charges paid by consignee
ANS: D
16 Head Office at Mumbai keeps a single 'Pune Branch A/c' which is used to record all items relating to the branch.
A. Pune branch is an independent branch whose accounts are kept under the 'Debtors' method.
B. Pune branch is dependent branch whose accounts are kept under the 'Debtors' method.
C. Pune branch is a dependent branch whose accounts are kept under the 'Stock and Debtors' method.
D. Pune branch is a independent branch whose accounts are kept under the 'Stock and Debtors' method.
ANS: B
17 The following entry is passed for a dependent branch at Pune following the Debtors method -
Goods sent to Pune Branch A/c…....................................................Dr
To Pune Branch A/c
A. This entry may indicate - Goods returned to HO by the Pune Branch
B. Goods returned to HO directly by the Pune branch customers
C. Goods sent by Pune branch to another branch
D. All of the above
ANS: D
18 The Head office sends goods to its branch at a loading of 25% on sales
A. The loading is 1/3rd of cost
B. The loading is 1/4th of cost
C. The loading is 50% of cost
D. The loading 20% of sales
ANS: A
19 The following entry is passed for a dependent branch at Pune following the Debtors method -
Pune Branch A/c…....................................................Dr
To Goods sent to Pune Branch A/c
This entry may indicate -
A. Goods sent to Pune branch by Head office
B. Goods sends to Pune Branch by another branch
C. Either Goods sent to Pune branch by Head office or Goods sends to Pune Branch by another branch
D. Neither Goods sent to Pune branch by Head office nor Goods sends to Pune Branch by another branch
ANS: C
20 The following entry is passed for a dependent branch at Pune following the Debtors method -
Pune Branch A/c…....................................................Dr
To Cash / Bank A/c
This entry may indicate -
A. Cash sent to Pune Branch by HO
B. Cash received from Pune branch by another branch
C. Cash received from Pune branch by HO
D. Expenses of HO paid by Pune branch
ANS: A
21 Under the 'Debtor' method, closing balance in the Branch account indicates
A. amount due from the branch
B. Profit or loss at the branch
C. Closing stock at the branch
D. Opening stock at the branch
ANS: B
22 Under the 'Debtor' method, Goods returned by debtors to branch
A. Will not be recorded by the HO in the Branch A/c
B. Will be debited to Goods sent Branch A/c and credited to the Branch A/c
C. Will be debited to Goods sent Branch A/c and credited to the Branch Debtors A/c
D. Will be debited to Branch Stock A/c and credited to the Branch Debtors A/c
ANS: A
23 When the Head office sends the goods at invoice price to dependent branch, the Head office opens the following accounts for that branch in its books under the Debtors method
A. Branch A/c b. Goods sent to Branch A/c c. Branch stock A/c
B. Branch A/c b. Goods sent to Branch A/c c. Branch Debtors A/c
C. Branch A/c b. Goods sent to Branch A/c
D. Branch A/c b. Goods sent to Branch A/c c. Stock Reserve A/c
ANS: D
24 When the Head Office sends the goods at Invoice price to a dependent branch, the loading on goods sent by HO to branch is adjusted by passing the following entry
A. Branch A/c _______________ Dr
To Stock reserve A/c
B. Goods sent to branch A/c___________Dr
To Branch A/c
C. Stock Reserve A/c ______________Dr
To Branch A/c
D. Branch A/c ______ Dr
To Goods sent to Branch A/c
ANS: B
25 Head office sends the goods at invoice price to a dependent branch. The total of Cash remitted to HO ANS: Cash balance with branch ANS: Closing stock with branch (at invoice price) is more than the total (at invoice price) of Opening stock with branch and goods sent to branch. This indicates
A. Likely fraud / error involving cash and / or stock
B. Cash and stock on the last day of the year with the branch
C. Profit for the year earned by the branch
D. Loss for the year recorded by the branch
ANS: A
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