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 a company has a trial balance that shows total debits of $50,000 and total credits of $48,000, what is the discrepancy?
A.
$1,000 debit error
B.
$2,000 credit error
C.
$2,000 debit error
D.
$1,000 credit error
Show solution
Solution
The discrepancy is $2,000, indicating that there is a credit error since total debits exceed total credits.
Correct Answer:
B
— $2,000 credit error
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Q. If a company has a trial balance with total debits of $15,000 and total credits of $12,000, what is the amount of the discrepancy?
A.
$3,000
B.
$1,500
C.
$2,000
D.
$5,000
Show solution
Solution
Discrepancy = Total Debits - Total Credits = $15,000 - $12,000 = $3,000.
Correct Answer:
A
— $3,000
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Q. If a company has a trial balance with 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.
Debits exceed credits
D.
Credits exceed debits
Show solution
Solution
If total debits equal total credits, it can be concluded that the accounts are balanced.
Correct Answer:
A
— The accounts are balanced
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Q. If a company has a trial balance with total debits of $50,000 and total credits of $48,000, what is the discrepancy?
A.
$1,000 debit
B.
$2,000 credit
C.
$2,000 debit
D.
$1,000 credit
Show solution
Solution
The discrepancy is $2,000 debit, as the total debits exceed the total credits by that amount.
Correct Answer:
C
— $2,000 debit
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Q. If a company has a trial balance with total debits of $50,000 and total credits of $48,000, what does this indicate?
A.
The accounts are balanced
B.
There is an error in the accounts
C.
The company is profitable
D.
The company has a cash surplus
Show solution
Solution
If total debits do not equal total credits, it indicates that there is an error in the accounts that needs to be investigated.
Correct Answer:
B
— There is an error in the accounts
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Q. If a company has current assets of $150,000 and current liabilities of $75,000, what is its current ratio?
A.
2:1
B.
1:2
C.
1:1
D.
3:1
Show solution
Solution
Current Ratio = Current Assets / Current Liabilities = 150,000 / 75,000 = 2:1.
Correct Answer:
A
— 2:1
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Q. If a company has fixed costs of $10,000 and a contribution margin per unit of $50, how many units must be sold to break even?
A.
100 units
B.
200 units
C.
150 units
D.
250 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. If a company has fixed costs of $5,000 and variable costs of $15 per unit, what is the marginal cost per unit?
A.
$5
B.
$15
C.
$20
D.
$25
Show solution
Solution
Marginal cost is equal to variable cost per unit, which is $15.
Correct Answer:
B
— $15
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Q. If a company has fixed costs of $5,000 and variable costs of $15 per unit, what is the total cost for producing 200 units?
A.
$5,000
B.
$10,000
C.
$10,500
D.
$8,000
Show solution
Solution
Total cost = Fixed costs + (Variable cost per unit * Number of units) = $5,000 + ($15 * 200) = $5,000 + $3,000 = $8,000.
Correct Answer:
C
— $10,500
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Q. If a company has fixed costs of $50,000 and a contribution margin of $20 per unit, how many units must it sell to break even?
A.
1,000 units
B.
2,500 units
C.
5,000 units
D.
10,000 units
Show solution
Solution
To find the break-even point, divide fixed costs by the contribution margin: $50,000 / $20 = 2,500 units.
Correct Answer:
B
— 2,500 units
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Q. If a company has fixed costs of $60,000 and a contribution margin ratio of 40%, what is the sales required to break even?
A.
$150,000
B.
$100,000
C.
$75,000
D.
$200,000
Show solution
Solution
Break-even sales = Fixed Costs / Contribution Margin Ratio = $60,000 / 0.40 = $150,000.
Correct Answer:
A
— $150,000
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Q. If a company has total assets of $1,000,000 and total liabilities of $600,000, what is the owner's equity?
A.
$400,000
B.
$600,000
C.
$1,000,000
D.
$200,000
Show solution
Solution
Owner's Equity = Total Assets - Total Liabilities = 1,000,000 - 600,000 = $400,000.
Correct Answer:
A
— $400,000
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Q. If a company has total costs of $200,000 and sells 4,000 units, what is the average cost per unit?
A.
$50
B.
$40
C.
$60
D.
$30
Show solution
Solution
Average Cost per Unit = Total Costs / Number of Units = $200,000 / 4,000 = $50.
Correct Answer:
A
— $50
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Q. If a company has total sales of $500,000 and the total market sales are $2,000,000, what is its market share?
A.
25%
B.
50%
C.
75%
D.
10%
Show solution
Solution
Market share = (500,000 / 2,000,000) * 100 = 25%.
Correct Answer:
A
— 25%
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Q. If a company has total sales of $500,000 and total expenses of $400,000, what is the profit margin?
A.
10%
B.
20%
C.
25%
D.
30%
Show solution
Solution
Profit Margin = (Total Sales - Total Expenses) / Total Sales x 100 = ($500,000 - $400,000) / $500,000 x 100 = 20%.
Correct Answer:
B
— 20%
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Q. If a company has variable costs of $5 per unit and fixed costs of $2,000, what is the total cost for producing 500 units?
A.
$2,500
B.
$4,000
C.
$5,000
D.
$3,000
Show solution
Solution
Total cost = (Variable cost per unit * Number of units) + Fixed costs = ($5 * 500) + $2,000 = $4,000
Correct Answer:
B
— $4,000
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Q. If a company produces 1,000 units at a total cost of $15,000, what is the average cost per unit?
A.
$10
B.
$15
C.
$20
D.
$25
Show solution
Solution
Average cost per unit = Total cost / Number of units = $15,000 / 1,000 = $15.
Correct Answer:
A
— $10
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Q. If a company produces 200 units and incurs total variable costs of $4,000, what is the variable cost per unit?
A.
$15
B.
$20
C.
$25
D.
$30
Show solution
Solution
Variable cost per unit = Total variable costs / Number of units = $4,000 / 200 = $20.
Correct Answer:
B
— $20
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Q. If a company purchased a building for $200,000 and expects it to last 20 years with a salvage value of $20,000, what is the annual straight-line depreciation?
A.
$9,000
B.
$10,000
C.
$8,500
D.
$11,000
Show solution
Solution
Annual Depreciation = (Cost - Salvage Value) / Useful Life = ($200,000 - $20,000) / 20 = $9,000.
Correct Answer:
B
— $10,000
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Q. If a company sells 1,000 units at $20 each and has variable costs of $12 per unit, what is the contribution margin?
A.
$8,000
B.
$12,000
C.
$20,000
D.
$8
Show solution
Solution
Contribution margin = (Selling Price - Variable Cost) * Quantity = ($20 - $12) * 1,000 = $8,000.
Correct Answer:
A
— $8,000
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Q. If a company sells 1,000 units at $50 each and has variable costs of $30 per unit, what is the total contribution?
A.
$20,000
B.
$30,000
C.
$50,000
D.
$10,000
Show solution
Solution
Total contribution = (Selling Price - Variable Cost) * Quantity = ($50 - $30) * 1000 = $20,000.
Correct Answer:
A
— $20,000
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Q. If a company sells 1,000 units at a selling price of $25 per unit and variable costs of $15 per unit, what is the total contribution?
A.
$10,000
B.
$5,000
C.
$15,000
D.
$25,000
Show solution
Solution
Total contribution = (Selling Price - Variable Cost) * Number of Units = ($25 - $15) * 1,000 = $10,000.
Correct Answer:
A
— $10,000
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Q. If a company sells 1,000 units at a selling price of $50 each and has variable costs of $30 per unit, what is the total contribution?
A.
$20,000
B.
$30,000
C.
$50,000
D.
$10,000
Show solution
Solution
Total contribution = (Selling Price - Variable Cost) * Number of Units = ($50 - $30) * 1,000 = $20,000.
Correct Answer:
A
— $20,000
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Q. If a company sells 150 units of inventory using LIFO, with the most recent purchases at $10, $12, and $15, what is the total cost of goods sold?
A.
$1,800
B.
$1,650
C.
$1,500
D.
$1,200
Show solution
Solution
Under LIFO, the cost of goods sold for the last 150 units sold is (100 units at $15) + (50 units at $12) = $1,500 + $600 = $2,100.
Correct Answer:
B
— $1,650
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Q. If a company sells 3,000 units at a selling price of $20 per unit and incurs total variable costs of $30,000, what is the total contribution?
A.
$30,000
B.
$60,000
C.
$90,000
D.
$20,000
Show solution
Solution
Total contribution = (Selling price - Variable cost per unit) x Number of units = ($20 - $10) x 3,000 = $30,000.
Correct Answer:
B
— $60,000
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Q. If a company sells 500 units at a selling price of $100 and has variable costs of $60 per unit, what is the total contribution?
A.
$20,000
B.
$25,000
C.
$30,000
D.
$35,000
Show solution
Solution
Contribution per unit = Selling Price - Variable Cost = $100 - $60 = $40. Total Contribution = Contribution per unit * Number of units = $40 * 500 = $20,000.
Correct Answer:
B
— $25,000
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Q. If a company sells 500 units at a selling price of $15 each and incurs variable costs of $6 per unit, what is the total contribution?
A.
$4,500
B.
$3,000
C.
$7,500
D.
$2,250
Show solution
Solution
Total contribution = (Selling price - Variable cost) * Number of units = ($15 - $6) * 500 = $4,500.
Correct Answer:
A
— $4,500
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Q. If a company sells 500 units of a product at a price of $20 each, what is the total revenue?
A.
$10,000
B.
$5,000
C.
$15,000
D.
$20,000
Show solution
Solution
Total Revenue = Price per unit x Number of units sold = $20 x 500 = $10,000.
Correct Answer:
A
— $10,000
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Q. If a company sells a product for $150 and the cost price is $100, what is the profit percentage?
A.
25%
B.
50%
C.
33.33%
D.
20%
Show solution
Solution
Profit = Selling Price - Cost Price = 150 - 100 = 50. Profit Percentage = (Profit/Cost Price) * 100 = (50/100) * 100 = 50%.
Correct Answer:
B
— 50%
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Q. If a company sells a product for $50 and has variable costs of $30, what is the break-even point in units if fixed costs are $20,000?
A.
1,000
B.
800
C.
600
D.
400
Show solution
Solution
Break-even point (units) = Fixed costs / (Selling price - Variable cost) = $20,000 / ($50 - $30) = 1,000 units
Correct Answer:
B
— 800
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