Sole Proprietors & Partnership Firms – 30 Easy MCQs

Here are the 40 Solved MCQs of the Sole Proprietors & Partnership Firms. These MCQs will develop your concept and help to improvise your exams preparation. A soft copy of these MCQs is also available.

Sole Proprietors & Partnership Firms (1-15 MCQs)

The assets which are easily convertible into cash are known as

  • Liquid asset
  • Fixed asset
  • Floating asset
  • Current asset

Bank overdraft should be classified as

  • Fixed asset
  • Current asset
  • Current liability
  • Liquid asset

Stock in trade is a

  • Current asset
  • Fixed asset
  • Floating asset
  • Current liability

Trade payable is a

  • Current liability
  • Fixed asset
  • Floating asset
  • Current asset

Goodwill should be classified as

  • Current asset
  • Liquid asset
  • Intangible asset
  • Fixed asset

Profit and loss account of business shows the

  • Gross profit earned
  • Net profit earned
  • Capital employed
  • Balance of all account

Outstanding wage is an item of

  • Current liability
  • Current asset
  • Non-current liability
  • Non-current asset

The assets that have no value but appear in the book are termed as

  • Intangible assets
  • Current assets
  • Fictitious assets
  • Wasting assets

The correct accounting equation is

  • Capital = Assets – Liabilities
  • Capital = Assets + Liabilities
  • Liabilities = Assets + Capital
  • Assets = Liabilities – Capital

Purchase of furniture results in

  • Increase in liabilities
  • Increase in capital
  • Increase in assets
  • Decrease in assets

Investment by the owner results in an increase in capital and an increase in

  • Asset
  • Liability
  • Both of the above
  • None of the above

Which of the following transaction will increase an asset and also decrease an asset?

  • Stores purchased on cash
  • Declaration of dividend
  • Stores purchased on account
  • Payment of promissory note with cash

The transaction which will result in a decrease in assets and decrease in liabilities is

  • Redemption of debentures
  • Payment of loan taken from the bank
  • Materials return to the supplier on account
  • All of the above

Sale of land for cash below cost results in

  • Decrease in total assets
  • Increase in total assets
  • No change in total assets
  • None of the above

Collection of an account receivable results in

  • Decrease in total assets
  • Increase in total assets
  • No change in total assets
  • None of the above

Quiz with Answers

1

Final Accounts – Sole Proprietors & Partnership Firms

Quiz with Answers

1 / 30

The assets which are easily convertible into cash are known as

2 / 30

Bank overdraft should be classified as

3 / 30

Stock in trade is a

4 / 30

Trade payable is a

5 / 30

Goodwill should be classified as

6 / 30

Profit and loss account of business shows the

7 / 30

Outstanding wages is an item of

8 / 30

Assets which have no value but appear in the book are termed as

9 / 30

The correct accounting equation is

10 / 30

Purchase of furniture results in

11 / 30

Investment by the owner results in an increase in capital and an increase in

12 / 30

Which of the following transaction will increase an asset and also decrease an asset?

13 / 30

The transaction which will result in decrease in assets and decrease in liabilities is

14 / 30

Sale of land for cash below cost results in

15 / 30

Collection of an account receivable results in

16 / 30

Payment of a liability results in

17 / 30

Purchase of machinery for cash results in

18 / 30

Subscriptions collected in advance by a publisher should be classified as

19 / 30

Interest earned but not received should be classified as

20 / 30

Life insurance premiums received by an insurance company should be classified as

21 / 30

All of the following are included in stock except

22 / 30

For the purpose of final account, stock is valued according to

23 / 30

Which of the following item(s) appearing in the trial balance, should be debited to the trading account?

24 / 30

Which of the following accounts would have zero balance after closing entries have been posted?

25 / 30

Which of the following would have zero balance after closing entries are posted?

26 / 30

Which of the following accounts would not have zero balance after closing entries have been posted?

27 / 30

Insurance premium paid on the life policy of a partner is

28 / 30

The balance sheet shows the financial position of business

29 / 30

An example of an intangible asset is

30 / 30

Sale-Purchase-Operating expenses are equal to

Sole Proprietors & Partnership Firms (16-30 MCQs)

  1. Payment of a liability results in
    1. Decrease in total assets
    1. Increase in total assets
    1. No change in total assets
    1. None of the above
  2. Purchase of machinery for cash results in
    1. Decrease in total assets
    1. Increase in total assets
    1. No change in total assets
    1. None of the above
  3. Subscriptions collected in advance by a publisher should be classified as
    1. Accrued liability
    1. Accrued assets
    1. Prepaid expense
    1. Unearned revenue
  4. Interest earned but not received should be classified as
    1. Unearned revenue
    1. Prepaid expense
    1. Accrued asset
    1. Accrued liability
  5. Life insurance premiums received by an insurance company should be classified as
    1. Accrued asset
    1. Accrued liability
    1. Prepaid expense
    1. Unearned revenue
  6. All of the following are included in stock except
    1. Goods out on approval
    1. Goods meant for resale
    1. Goods in the hands of an agent
    1. Goods sold awaiting delivery to the buyer
  7. For the purpose of final account, stock is valued according to
    1. FIFO basis
    1. LIFO basis
    1. Base stock method
    1. Any of the above
  8. Which of the following item(s) appearing in the trial balance, should be debited to trading account?
    1. Wages and salaries
    1. Advance payments
    1. Wages outstanding
    1. Salaries and wages
  9. Which of the following accounts would have zero balance after closing entries have been posted?
    1. Machinery account
    1. Interest earned account
    1. Accumulated depreciation account
    1. Account payable
  10. Which of the following would have zero balance after closing entries are posted?
    1. Delivery truck
    1. Prepaid insurance
    1. Salary and wages expenses
    1. Interest receivable
  11. Which of the following accounts would not have zero balance after closing entries have been posted?
    1. Rent paid
    1. Office furniture
    1. Interest payable
    1. All of the above
  12. Insurance premium paid on the life policy of a partner is
    1. Debited to capital account of the partner
    1. Credited to profit and loss account
    1. Credited to partner’s capital account
    1. None of the above
  13. Balance sheet shows the financial position of business
    1. As on a particular date
    1. For unpredictable period
    1. For a given period
    1. None of the above
  14. An example of an intangible asset is
    1. Debit balance of profit and loss account
    1. Goodwill
    1. Preliminary expenses
    1. Deferred revenue expenditures
  15. Sale-Purchase-Operating expenses are equal to
    1. Gross profit
    1. Net operating profit
    1. Net profit
    1. Gross operating profit
Sole Proprietors & Partnership Firms
Sole Proprietors & Partnership Firms

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