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. What is the basic exemption limit for individual taxpayers below 60 years of age in India for the financial year 2022-23?
A.
2.5 lakhs
B.
3 lakhs
C.
5 lakhs
D.
10 lakhs
Show solution
Solution
The basic exemption limit for individual taxpayers below 60 years of age is 2.5 lakhs.
Correct Answer:
A
— 2.5 lakhs
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Q. What is the break-even point in CVP analysis?
A.
The point where total revenue equals total costs
B.
The point where fixed costs are covered
C.
The point where variable costs exceed fixed costs
D.
The point where profit is maximized
Show solution
Solution
The break-even point is where total revenue equals total costs, resulting in neither profit nor loss.
Correct Answer:
A
— The point where total revenue equals total costs
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Q. What is the break-even point in sales dollars if the break-even point in units is 1,000 and the selling price per unit is $25?
A.
$15,000
B.
$20,000
C.
$25,000
D.
$30,000
Show solution
Solution
Break-even Sales = Break-even Units * Selling Price per Unit = 1,000 * $25 = $25,000.
Correct Answer:
C
— $25,000
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Q. What is the break-even point in sales dollars if the fixed costs are $100,000 and the contribution margin ratio is 40%?
A.
$250,000
B.
$400,000
C.
$100,000
D.
$150,000
Show solution
Solution
Break-even point in sales dollars = Fixed Costs / Contribution Margin Ratio = $100,000 / 0.40 = $250,000.
Correct Answer:
A
— $250,000
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Q. What is the break-even point in sales dollars?
A.
Fixed costs divided by contribution margin ratio
B.
Total costs divided by total sales
C.
Total variable costs divided by contribution margin
D.
Sales revenue minus total costs
Show solution
Solution
The break-even point in sales dollars is calculated by dividing fixed costs by the contribution margin ratio.
Correct Answer:
A
— Fixed costs divided by contribution margin ratio
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Q. What is the break-even point in units if fixed costs are $10,000 and the contribution margin per unit is $50?
A.
100 units
B.
200 units
C.
300 units
D.
400 units
Show solution
Solution
Break-even point (units) = Fixed costs / Contribution margin per unit = $10,000 / $50 = 200 units.
Correct Answer:
B
— 200 units
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Q. What is the break-even point in units if fixed costs are $10,000 and the contribution margin per unit is $25?
A.
400 units
B.
500 units
C.
600 units
D.
300 units
Show solution
Solution
Break-even point (units) = Fixed costs / Contribution margin per unit = $10,000 / $25 = 400 units.
Correct Answer:
B
— 500 units
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Q. What is the break-even point in units if fixed costs are $10,000, selling price per unit is $50, and variable cost per unit is $30?
A.
500 units
B.
1,000 units
C.
250 units
D.
750 units
Show solution
Solution
Break-even point (units) = Fixed Costs / (Selling Price - Variable Cost) = $10,000 / ($50 - $30) = 500 units.
Correct Answer:
B
— 1,000 units
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Q. What is the break-even point in units if fixed costs are $100,000, variable cost per unit is $20, and selling price per unit is $50?
A.
2,000 units
B.
1,500 units
C.
4,000 units
D.
5,000 units
Show solution
Solution
Break-even point (units) = Fixed Costs / (Selling Price - Variable Cost) = $100,000 / ($50 - $20) = 2,000 units.
Correct Answer:
A
— 2,000 units
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Q. What is the break-even point in units if fixed costs are $12,000 and the contribution margin per unit is $40?
A.
300 units
B.
400 units
C.
500 units
D.
600 units
Show solution
Solution
Break-even point (units) = Fixed costs / Contribution margin per unit = $12,000 / $40 = 300 units.
Correct Answer:
B
— 400 units
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Q. What is the break-even point in units if fixed costs are $20,000 and contribution margin per unit is $5?
A.
4,000 units
B.
5,000 units
C.
2,000 units
D.
10,000 units
Show solution
Solution
Break-even point (units) = Fixed Costs / Contribution Margin per unit = $20,000 / $5 = 4,000 units.
Correct Answer:
B
— 5,000 units
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Q. What is the break-even point in units if fixed costs are $40,000, selling price per unit is $80, and variable cost per unit is $50?
A.
800 units
B.
1,000 units
C.
1,200 units
D.
600 units
Show solution
Solution
Break-even point (units) = Fixed Costs / (Selling Price - Variable Cost) = $40,000 / ($80 - $50) = 1,000 units.
Correct Answer:
B
— 1,000 units
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Q. What is the break-even point in units if fixed costs are $50,000, selling price per unit is $25, and variable cost per unit is $15?
A.
2,500 units
B.
5,000 units
C.
3,000 units
D.
4,000 units
Show solution
Solution
Break-even point = Fixed Costs / (Selling Price - Variable Cost) = 50000 / (25 - 15) = 2500 units.
Correct Answer:
A
— 2,500 units
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Q. What is the break-even point in units if fixed costs are $50,000, variable cost per unit is $20, and selling price per unit is $50?
A.
1,000 units
B.
2,000 units
C.
1,500 units
D.
2,500 units
Show solution
Solution
Break-even point = Fixed Costs / (Selling Price - Variable Cost) = 50,000 / (50 - 20) = 1,000 units.
Correct Answer:
B
— 2,000 units
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Q. What is the break-even point in units?
A.
Total fixed costs divided by contribution margin per unit
B.
Total variable costs divided by selling price
C.
Total sales revenue divided by total costs
D.
Total fixed costs divided by selling price
Show solution
Solution
The break-even point in units is calculated by dividing total fixed costs by the contribution margin per unit.
Correct Answer:
A
— Total fixed costs divided by contribution margin per unit
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Q. What is the contribution margin if the selling price is $200 and variable costs are $120?
A.
$80
B.
$120
C.
$200
D.
$320
Show solution
Solution
Contribution Margin = Selling Price - Variable Costs = $200 - $120 = $80.
Correct Answer:
A
— $80
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Q. What is the contribution margin if the selling price is $200, variable costs are $120, and fixed costs are $50?
A.
$80
B.
$120
C.
$50
D.
$200
Show solution
Solution
Contribution Margin = Selling Price - Variable Costs = $200 - $120 = $80.
Correct Answer:
A
— $80
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Q. What is the contribution margin in CVP analysis?
A.
Sales revenue minus fixed costs
B.
Sales revenue minus variable costs
C.
Total costs minus total revenue
D.
Net income before taxes
Show solution
Solution
The contribution margin is calculated as sales revenue minus variable costs.
Correct Answer:
B
— Sales revenue minus variable costs
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Q. What is the contribution margin in marginal costing?
A.
Sales Revenue - Variable Costs
B.
Sales Revenue - Fixed Costs
C.
Total Costs - Profit
D.
Sales Revenue - Total Costs
Show solution
Solution
The contribution margin is calculated as Sales Revenue minus Variable Costs.
Correct Answer:
A
— Sales Revenue - Variable Costs
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Q. What is the contribution margin per unit if the selling price is $80 and variable costs are $50?
A.
$30
B.
$50
C.
$80
D.
$20
Show solution
Solution
Contribution Margin per unit = Selling Price - Variable Costs = $80 - $50 = $30.
Correct Answer:
A
— $30
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Q. What is the correct journal entry for the distribution of profits among partners?
A.
Debit Profit and Loss Account, Credit Partner's Capital Accounts
B.
Debit Partner's Capital Accounts, Credit Profit and Loss Account
C.
Debit Partner's Capital Accounts, Credit Cash
D.
Debit Cash, Credit Partner's Capital Accounts
Show solution
Solution
The distribution of profits is recorded by debiting the profit and loss account and crediting the partners' capital accounts.
Correct Answer:
A
— Debit Profit and Loss Account, Credit Partner's Capital Accounts
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Q. What is the double declining balance method of depreciation?
A.
A method that accelerates depreciation.
B.
A method that spreads depreciation evenly.
C.
A method that only applies to intangible assets.
D.
A method that does not consider salvage value.
Show solution
Solution
The double declining balance method accelerates depreciation by applying a constant rate to the declining book value of the asset.
Correct Answer:
A
— A method that accelerates depreciation.
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Q. What is the double-entry accounting principle?
A.
Every transaction affects only one account
B.
Every transaction affects two or more accounts
C.
Only cash transactions are recorded
D.
Only credit transactions are recorded
Show solution
Solution
The double-entry accounting principle states that every transaction affects at least two accounts.
Correct Answer:
B
— Every transaction affects two or more accounts
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Q. What is the due date for filing income tax returns for individuals for the financial year 2022-23?
A.
30th September 2023
B.
31st July 2023
C.
31st March 2023
D.
15th August 2023
Show solution
Solution
The due date for filing income tax returns for individuals is 31st July of the assessment year.
Correct Answer:
B
— 31st July 2023
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Q. What is the due date for filing income tax returns for individuals in India for the financial year 2022-23?
A.
30th June 2023
B.
31st July 2023
C.
31st August 2023
D.
31st December 2023
Show solution
Solution
The due date for filing income tax returns for individuals in India for the financial year 2022-23 is 31st July 2023.
Correct Answer:
B
— 31st July 2023
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Q. What is the effect of a $500 error in recording a cash sale on the trial balance?
A.
Trial balance will show a $500 debit excess
B.
Trial balance will show a $500 credit excess
C.
Trial balance will balance correctly
D.
Trial balance will show a $1000 error
Show solution
Solution
If a cash sale of $500 is recorded incorrectly, it will create a $500 debit excess in the trial balance.
Correct Answer:
A
— Trial balance will show a $500 debit excess
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Q. What is the effect of a $500 purchase of inventory on the trial balance?
A.
Increase in assets and increase in liabilities
B.
Increase in assets and decrease in equity
C.
Increase in assets and increase in expenses
D.
No effect on the trial balance
Show solution
Solution
A $500 purchase of inventory increases assets (inventory) and increases liabilities (accounts payable) if not paid in cash.
Correct Answer:
A
— Increase in assets and increase in liabilities
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Q. What is the effect of a depreciation expense on the financial statements?
A.
Increases net income
B.
Decreases net income
C.
Increases cash flow
D.
No effect on net income
Show solution
Solution
Depreciation expense reduces net income as it is an expense that is deducted from revenues.
Correct Answer:
B
— Decreases net income
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Q. What is the effect of a double entry error on the trial balance?
A.
It will still balance
B.
It will cause an imbalance
C.
It will not affect the trial balance
D.
It will only affect the income statement
Show solution
Solution
A double entry error will cause an imbalance in the trial balance because it affects the equality of debits and credits.
Correct Answer:
B
— It will cause an imbalance
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Q. What is the effect of a partner withdrawing from a partnership on the capital accounts?
A.
Increase in total capital
B.
Decrease in total capital
C.
No effect on total capital
D.
Increase in liabilities
Show solution
Solution
When a partner withdraws, it typically results in a decrease in total capital as their capital account is settled.
Correct Answer:
B
— Decrease in total capital
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