Commerce & Accountancy MCQ & Objective Questions
Commerce & Accountancy is a vital subject for students aiming to excel in their school exams and competitive assessments. Mastering this field not only enhances your understanding of financial principles but also significantly boosts your exam scores. Practicing MCQs and objective questions is essential, as it helps you identify important questions and reinforces your exam preparation through targeted practice questions.
What You Will Practise Here
Fundamental concepts of accounting and financial statements
Key principles of commerce including trade, marketing, and economics
Important formulas related to profit and loss, balance sheets, and cash flow
Definitions of key terms such as assets, liabilities, and equity
Diagrams illustrating accounting processes and business models
Theory areas covering the role of commerce in the economy
Analysis of case studies relevant to real-world commerce scenarios
Exam Relevance
Commerce & Accountancy is a significant part of the curriculum for CBSE, State Boards, and various competitive exams like NEET and JEE. Questions often focus on practical applications of concepts, requiring students to solve numerical problems and interpret financial data. Common question patterns include multiple-choice questions that test both theoretical knowledge and practical understanding, making it crucial to be well-prepared.
Common Mistakes Students Make
Misunderstanding the difference between assets and liabilities
Confusing terms related to accounting principles
Overlooking the importance of accurate calculations in numerical questions
Neglecting to review the impact of transactions on financial statements
FAQs
Question: What are the key topics I should focus on in Commerce & Accountancy?Answer: Focus on financial statements, accounting principles, and key formulas to excel in this subject.
Question: How can I improve my performance in Commerce & Accountancy exams?Answer: Regular practice of MCQs and understanding the concepts thoroughly will enhance your performance.
Start solving practice MCQs today to test your understanding and boost your confidence in Commerce & Accountancy. Remember, consistent practice is the key to success in your exams!
Q. If an investment of $50,000 generates a net profit of $10,000, what is the ROI?
A.
20%
B.
15%
C.
25%
D.
10%
Show solution
Solution
ROI = (10,000 / 50,000) * 100 = 20%.
Correct Answer:
A
— 20%
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Q. If fixed costs are $50,000 and the contribution margin per unit is $25, how many units must be sold to break even?
A.
1,000 units
B.
2,000 units
C.
2,500 units
D.
3,000 units
Show solution
Solution
Break-even point (units) = Fixed Costs / Contribution Margin per unit = $50,000 / $25 = 2,000 units.
Correct Answer:
B
— 2,000 units
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Q. If inventory is valued at $10,000 and the company sells goods worth $4,000, what will be the new inventory value assuming no other changes?
A.
$10,000
B.
$6,000
C.
$4,000
D.
$14,000
Show solution
Solution
New inventory value = Initial Inventory - Cost of Goods Sold = $10,000 - $4,000 = $6,000.
Correct Answer:
B
— $6,000
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Q. If the actual cost of production is $120,000 and the budgeted cost is $100,000, what is the cost variance?
A.
$20,000 Favorable
B.
$20,000 Unfavorable
C.
$10,000 Favorable
D.
$10,000 Unfavorable
Show solution
Solution
Cost Variance = Actual Cost - Budgeted Cost = $120,000 - $100,000 = $20,000 Unfavorable.
Correct Answer:
B
— $20,000 Unfavorable
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Q. If the budgeted cost for direct materials is $50,000 and the actual cost is $55,000, what is the direct materials price variance?
A.
$5,000 Favorable
B.
$5,000 Unfavorable
C.
$10,000 Favorable
D.
$10,000 Unfavorable
Show solution
Solution
Direct materials price variance = Actual Cost - Budgeted Cost = $55,000 - $50,000 = $5,000 Unfavorable.
Correct Answer:
B
— $5,000 Unfavorable
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Q. If the budgeted fixed costs are $50,000 and the actual fixed costs are $55,000, what is the fixed cost variance?
A.
$5,000 Favorable
B.
$5,000 Unfavorable
C.
$50,000 Favorable
D.
$50,000 Unfavorable
Show solution
Solution
The fixed cost variance is calculated as Actual Fixed Costs - Budgeted Fixed Costs, which is $55,000 - $50,000 = $5,000 Unfavorable.
Correct Answer:
B
— $5,000 Unfavorable
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Q. If the budgeted fixed overhead is $200,000 and the actual fixed overhead is $210,000, what is the fixed overhead variance?
A.
$10,000 Favorable
B.
$10,000 Unfavorable
C.
$20,000 Favorable
D.
$20,000 Unfavorable
Show solution
Solution
Fixed overhead variance = Actual Fixed Overhead - Budgeted Fixed Overhead = $210,000 - $200,000 = $10,000 Unfavorable.
Correct Answer:
B
— $10,000 Unfavorable
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Q. If the budgeted overhead is $200,000 and the actual overhead is $180,000, what is the overhead variance?
A.
$20,000 Favorable
B.
$20,000 Unfavorable
C.
$40,000 Favorable
D.
$40,000 Unfavorable
Show solution
Solution
Overhead variance = Actual Overhead - Budgeted Overhead = $180,000 - $200,000 = -$20,000, which is favorable.
Correct Answer:
A
— $20,000 Favorable
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Q. If the budgeted overhead is $200,000 and the actual overhead is $220,000, what is the overhead variance?
A.
$20,000 Favorable
B.
$20,000 Unfavorable
C.
$40,000 Favorable
D.
$40,000 Unfavorable
Show solution
Solution
Overhead variance = Actual Overhead - Budgeted Overhead = $220,000 - $200,000 = $20,000 Unfavorable.
Correct Answer:
B
— $20,000 Unfavorable
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Q. If the closing inventory is valued at $10,000 and the cost of goods sold is $40,000, what is the gross profit if sales are $60,000?
A.
$20,000
B.
$10,000
C.
$30,000
D.
$50,000
Show solution
Solution
Gross Profit is calculated as Sales minus Cost of Goods Sold, which is $60,000 - $40,000 = $20,000.
Correct Answer:
A
— $20,000
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Q. If the contribution margin per unit is $20 and fixed costs are $40,000, how many units must be sold to break even?
A.
1,500
B.
2,000
C.
2,500
D.
3,000
Show solution
Solution
Break-even Point (Units) = Fixed Costs / Contribution Margin per Unit = $40,000 / $20 = 2,000 units.
Correct Answer:
B
— 2,000
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Q. If the contribution margin per unit is $40 and fixed costs are $20,000, how many units need to be sold to achieve a target profit of $10,000?
A.
750 units
B.
500 units
C.
600 units
D.
400 units
Show solution
Solution
Required units = (Fixed Costs + Target Profit) / Contribution Margin per Unit = ($20,000 + $10,000) / $40 = 750 units.
Correct Answer:
A
— 750 units
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Q. If the cost price of an item is $150 and it is sold for $180, what is the percentage profit?
A.
20%
B.
15%
C.
25%
D.
30%
Show solution
Solution
Profit = Selling Price - Cost Price = 180 - 150 = $30. Percentage Profit = (Profit / Cost Price) * 100 = (30 / 150) * 100 = 20%.
Correct Answer:
A
— 20%
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Q. If the fixed costs are $12,000 and the variable cost per unit is $20, how many units must be sold to achieve a target profit of $8,000 if the selling price is $50?
A.
400 units
B.
500 units
C.
600 units
D.
700 units
Show solution
Solution
Required sales = (Fixed costs + Target profit) / Contribution margin per unit = ($12,000 + $8,000) / ($50 - $20) = $20,000 / $30 = 667 units.
Correct Answer:
B
— 500 units
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Q. If the marginal cost of producing an additional unit is $10 and the selling price is $15, what is the profit from selling that unit?
A.
$5
B.
$10
C.
$15
D.
$0
Show solution
Solution
Profit from selling the unit = Selling price - Marginal cost = $15 - $10 = $5.
Correct Answer:
A
— $5
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Q. If the selling price is $250 and the variable cost is $150, what is the contribution margin ratio?
A.
40%
B.
50%
C.
60%
D.
70%
Show solution
Solution
Contribution Margin = Selling Price - Variable Cost = $250 - $150 = $100. Contribution Margin Ratio = Contribution Margin / Selling Price = $100 / $250 = 0.4 or 40%.
Correct Answer:
C
— 60%
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Q. If the selling price is $300 and the variable cost is $180, what is the contribution margin per unit?
A.
$120
B.
$180
C.
$300
D.
$60
Show solution
Solution
Contribution Margin per Unit = Selling Price - Variable Cost = $300 - $180 = $120.
Correct Answer:
A
— $120
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Q. If the selling price of an item is $240 and the profit is 20%, what is the cost price?
A.
$200
B.
$180
C.
$220
D.
$240
Show solution
Solution
Let Cost Price = x. Selling Price = x + 0.2x = 1.2x. 1.2x = 240. x = 240/1.2 = $200.
Correct Answer:
A
— $200
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Q. If the selling price per unit is $10 and the marginal cost per unit is $6, what is the contribution margin per unit?
Show solution
Solution
Contribution margin per unit = Selling price - Marginal cost = $10 - $6 = $4.
Correct Answer:
A
— $4
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Q. If the selling price per unit is $100 and the variable cost per unit is $60, what is the margin of safety in dollars if the break-even sales are $40,000?
A.
$20,000
B.
$30,000
C.
$10,000
D.
$15,000
Show solution
Solution
Margin of safety = Actual sales - Break-even sales. Actual sales = Selling price per unit * Number of units sold. If 1,000 units are sold, Actual sales = $100 * 1,000 = $100,000. Margin of safety = $100,000 - $40,000 = $60,000.
Correct Answer:
A
— $20,000
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Q. If the selling price per unit is $15 and the variable cost per unit is $5, what is the contribution margin per unit?
A.
$10
B.
$5
C.
$15
D.
$0
Show solution
Solution
Contribution margin per unit = Selling price - Variable cost = $15 - $5 = $10.
Correct Answer:
A
— $10
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Q. If the total fixed costs are $12,000 and the contribution margin ratio is 40%, what is the sales revenue needed to break even?
A.
$30,000
B.
$40,000
C.
$50,000
D.
$60,000
Show solution
Solution
Break-even sales revenue = Fixed costs / Contribution margin ratio = $12,000 / 0.40 = $30,000.
Correct Answer:
B
— $40,000
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Q. If the total variable costs for producing 2,000 units are $24,000, what is the variable cost per unit?
A.
$12
B.
$10
C.
$8
D.
$6
Show solution
Solution
Variable cost per unit = Total variable costs / Number of units = $24,000 / 2,000 = $12
Correct Answer:
B
— $10
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Q. If the trial balance does not balance, what is the first step an accountant should take?
A.
Prepare the financial statements
B.
Check for arithmetic errors
C.
Review the journal entries
D.
Consult with a supervisor
Show solution
Solution
The first step an accountant should take is to check for arithmetic errors in the trial balance to identify discrepancies.
Correct Answer:
B
— Check for arithmetic errors
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Q. If the trial balance does not balance, what is the first step to identify the error?
A.
Recalculate the totals
B.
Check the ledger accounts
C.
Review the journal entries
D.
Consult with an accountant
Show solution
Solution
The first step to identify the error when the trial balance does not balance is to recalculate the totals to ensure accuracy.
Correct Answer:
A
— Recalculate the totals
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Q. If the trial balance does not balance, what is the first step to investigate?
A.
Check for missing transactions
B.
Recalculate the totals
C.
Review the journal entries
D.
Verify account balances
Show solution
Solution
The first step is to check for missing transactions, as this could cause the trial balance to be unbalanced.
Correct Answer:
B
— Recalculate the totals
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Q. If the trial balance does not balance, which of the following could be a reason?
A.
A transaction was recorded twice
B.
A transaction was omitted
C.
An incorrect amount was posted
D.
All of the above
Show solution
Solution
All of the above reasons can cause a trial balance to not balance, indicating errors in the accounting records.
Correct Answer:
D
— All of the above
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Q. If the trial balance shows a credit balance of $7,000 for Accounts Payable and a debit balance of $4,000 for Cash, what is the total balance of the trial balance?
A.
$3,000
B.
$11,000
C.
$7,000
D.
$4,000
Show solution
Solution
The total balance of the trial balance is $7,000 (credit) + $4,000 (debit) = $11,000.
Correct Answer:
B
— $11,000
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Q. If the trial balance shows total debits of $100,000 and total credits of $95,000, what is the amount of the discrepancy?
A.
$5,000 debit
B.
$5,000 credit
C.
$10,000 debit
D.
$10,000 credit
Show solution
Solution
The discrepancy is the difference between total debits and total credits, which is $100,000 - $95,000 = $5,000 debit.
Correct Answer:
A
— $5,000 debit
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Q. If the trial balance shows total debits of $50,000 and total credits of $50,000, what can be concluded?
A.
The accounts are balanced
B.
There is an error
C.
More debits than credits
D.
More credits than debits
Show solution
Solution
If total debits equal total credits, the accounts are balanced.
Correct Answer:
A
— The accounts are balanced
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