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. Which costing method includes both fixed and variable costs in product costs?
A.
Marginal costing
B.
Absorption costing
C.
Direct costing
D.
Activity-based costing
Show solution
Solution
Absorption costing includes both fixed and variable costs in product costs.
Correct Answer:
B
— Absorption costing
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Q. Which costing method is best for short-term decision-making?
A.
Absorption costing
B.
Marginal costing
C.
Activity-based costing
D.
Standard costing
Show solution
Solution
Marginal costing is best for short-term decision-making as it focuses on variable costs and contribution margin.
Correct Answer:
B
— Marginal costing
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Q. Which costing method is most appropriate for a company producing custom-made products?
A.
Job order costing
B.
Process costing
C.
Activity-based costing
D.
Standard costing
Show solution
Solution
Job order costing is suitable for custom-made products as it tracks costs for each individual job.
Correct Answer:
A
— Job order costing
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Q. Which costing method is most appropriate for a company that produces custom-made products?
A.
Job order costing
B.
Process costing
C.
Activity-based costing
D.
Standard costing
Show solution
Solution
Job order costing is suitable for companies that produce custom-made products, as it tracks costs for each individual job.
Correct Answer:
A
— Job order costing
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Q. Which costing method is primarily used for internal decision-making?
A.
Absorption costing
B.
Marginal costing
C.
Standard costing
D.
Job costing
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Solution
Marginal costing is primarily used for internal decision-making as it focuses on variable costs.
Correct Answer:
B
— Marginal costing
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Q. Which depreciation method allocates an equal amount of depreciation expense each year?
A.
Declining Balance
B.
Units of Production
C.
Straight-Line
D.
Sum-of-the-Years'-Digits
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Solution
The Straight-Line method allocates an equal amount of depreciation expense each year.
Correct Answer:
C
— Straight-Line
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Q. Which depreciation method is best suited for assets that have a variable usage pattern?
A.
Straight-Line Method
B.
Declining Balance Method
C.
Units of Production Method
D.
Sum-of-the-Years'-Digits Method
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Solution
The Units of Production Method is best suited for assets with variable usage patterns, as it ties depreciation to actual usage.
Correct Answer:
C
— Units of Production Method
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Q. Which depreciation method is best suited for assets that have a variable usage?
A.
Straight-Line Method
B.
Declining Balance Method
C.
Units of Production Method
D.
Sum-of-the-Years'-Digits Method
Show solution
Solution
The Units of Production Method is best suited for assets with variable usage, as it bases depreciation on actual usage.
Correct Answer:
C
— Units of Production Method
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Q. Which depreciation method is best suited for assets that lose value quickly?
A.
Straight-line method
B.
Declining balance method
C.
Units of production method
D.
Sum-of-the-years'-digits method
Show solution
Solution
The declining balance method is best for assets that lose value quickly as it accelerates depreciation.
Correct Answer:
B
— Declining balance method
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Q. Which depreciation method is most suitable for assets that have a consistent usage pattern?
A.
Straight-line method
B.
Declining balance method
C.
Units of production method
D.
Sum-of-the-years'-digits method
Show solution
Solution
The straight-line method is most suitable for assets with a consistent usage pattern, as it allocates the cost evenly over time.
Correct Answer:
A
— Straight-line method
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Q. Which depreciation method is most suitable for assets that have a predictable pattern of usage?
A.
Straight-line method
B.
Declining balance method
C.
Units of production method
D.
Sum-of-the-years'-digits method
Show solution
Solution
The straight-line method is most suitable for assets with a predictable pattern of usage, as it allocates costs evenly.
Correct Answer:
A
— Straight-line method
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Q. Which depreciation method results in higher depreciation expense in the earlier years of an asset's life?
A.
Straight-Line Method
B.
Declining Balance Method
C.
Units of Production Method
D.
Sum-of-the-Years'-Digits Method
Show solution
Solution
The Declining Balance Method results in higher depreciation expenses in the earlier years due to its accelerated nature.
Correct Answer:
B
— Declining Balance Method
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Q. Which depreciation method would be most appropriate for a vehicle that is expected to have a higher usage in the first few years?
A.
Straight-Line Method
B.
Declining Balance Method
C.
Units of Production Method
D.
Sum-of-the-Years'-Digits Method
Show solution
Solution
The Declining Balance Method is appropriate for assets like vehicles that experience higher usage and wear in the initial years.
Correct Answer:
B
— Declining Balance Method
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Q. Which depreciation method would likely result in the highest expense in the early years of an asset's life?
A.
Straight-Line Method
B.
Declining Balance Method
C.
Units of Production Method
D.
None of the Above
Show solution
Solution
The Declining Balance Method results in higher depreciation expenses in the early years compared to the Straight-Line Method.
Correct Answer:
B
— Declining Balance Method
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Q. Which depreciation method would likely result in the highest total depreciation expense over an asset's life?
A.
Straight-Line Method
B.
Declining Balance Method
C.
Units of Production Method
D.
None of the above
Show solution
Solution
The Declining Balance Method typically results in the highest total depreciation expense over an asset's life due to accelerated depreciation in the early years.
Correct Answer:
B
— Declining Balance Method
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Q. Which factor in the business environment can directly affect consumer purchasing power?
A.
Political stability
B.
Economic conditions
C.
Technological changes
D.
Social trends
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Solution
Economic conditions, such as inflation and employment rates, directly impact consumer purchasing power.
Correct Answer:
B
— Economic conditions
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Q. Which factor in the business environment can directly affect supply chain management?
A.
Political Environment
B.
Social Environment
C.
Technological Environment
D.
Economic Environment
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Solution
The economic environment can directly affect supply chain management through factors like inflation and resource availability.
Correct Answer:
D
— Economic Environment
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Q. Which factor is considered a part of the socio-cultural environment?
A.
Interest rates
B.
Consumer behavior and lifestyle changes
C.
Technological advancements
D.
Government policies
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Solution
Consumer behavior and lifestyle changes are part of the socio-cultural environment, influencing how businesses operate and market their products.
Correct Answer:
B
— Consumer behavior and lifestyle changes
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Q. Which factor is considered a social aspect of the business environment?
A.
Interest rates
B.
Cultural trends
C.
Technological advancements
D.
Legal regulations
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Solution
Cultural trends are a social aspect of the business environment that can influence consumer behavior and preferences.
Correct Answer:
B
— Cultural trends
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Q. Which factor is considered a social element in the business environment?
A.
Consumer behavior trends
B.
Interest rates
C.
Government policies
D.
Technological innovations
Show solution
Solution
Consumer behavior trends are a social element as they reflect the preferences and habits of society, impacting business strategies.
Correct Answer:
A
— Consumer behavior trends
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Q. Which factor is NOT typically considered part of the macro-environment in business?
A.
Political factors
B.
Technological factors
C.
Company policies
D.
Social factors
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Solution
Company policies are internal factors, while the macro-environment includes external factors like political, technological, and social influences.
Correct Answer:
C
— Company policies
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Q. Which financial statement provides a snapshot of a company's financial position at a specific point in time?
A.
Income Statement
B.
Cash Flow Statement
C.
Balance Sheet
D.
Statement of Changes in Equity
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Solution
The Balance Sheet provides a snapshot of a company's financial position at a specific point in time.
Correct Answer:
C
— Balance Sheet
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Q. Which financial statement provides information about a company's working capital?
A.
Income Statement
B.
Cash Flow Statement
C.
Balance Sheet
D.
Statement of Changes in Equity
Show solution
Solution
The Balance Sheet provides information about a company's working capital by listing current assets and current liabilities.
Correct Answer:
C
— Balance Sheet
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Q. Which form is used for filing income tax returns for individuals with income from salary and other sources?
A.
ITR-1
B.
ITR-2
C.
ITR-3
D.
ITR-4
Show solution
Solution
ITR-1 is used for filing income tax returns for individuals with income from salary and other sources.
Correct Answer:
A
— ITR-1
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Q. Which form is used for filing income tax returns for individuals with income from salary and house property?
A.
ITR-1
B.
ITR-2
C.
ITR-3
D.
ITR-4
Show solution
Solution
ITR-1 is used for filing income tax returns for individuals with income from salary and house property.
Correct Answer:
A
— ITR-1
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Q. Which form is used for filing income tax returns for individuals with income from salary, house property, and other sources?
A.
ITR-1
B.
ITR-2
C.
ITR-3
D.
ITR-4
Show solution
Solution
ITR-1 is used for filing income tax returns for individuals with income from salary, house property, and other sources.
Correct Answer:
A
— ITR-1
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Q. Which form of business ownership allows for shared profits and losses?
A.
Sole proprietorship
B.
Partnership
C.
Corporation
D.
Franchise
Show solution
Solution
In a partnership, profits and losses are shared among partners according to their agreement.
Correct Answer:
B
— Partnership
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Q. Which form of business ownership allows for shared profits and responsibilities?
A.
Sole proprietorship
B.
Partnership
C.
Corporation
D.
Franchise
Show solution
Solution
In a partnership, profits and responsibilities are shared among partners.
Correct Answer:
B
— Partnership
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Q. Which form of business ownership allows for shared responsibility and resources?
A.
Sole proprietorship
B.
Partnership
C.
Corporation
D.
Franchise
Show solution
Solution
A partnership allows two or more individuals to share responsibility and resources.
Correct Answer:
B
— Partnership
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Q. Which form of business ownership allows for the easiest transfer of ownership?
A.
Sole proprietorship
B.
Partnership
C.
Corporation
D.
Limited liability company
Show solution
Solution
A corporation allows for the easiest transfer of ownership through the sale of stock.
Correct Answer:
C
— Corporation
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