MCQ Collection
Accounting and Finance MCQs
Practice Accounting and Finance questions with answers and explanations.
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A.
All private household debt
B.
Only unpaid taxes
C.
Outstanding borrowing obligations of government
D.
The value of public buildings
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Correct Answer: C. Outstanding borrowing obligations of government
Explanation:
Governments borrow by issuing securities or taking loans.
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A.
A tax with the same average rate for everyone
B.
A tax whose rate falls as income rises
C.
A fixed fee unrelated to ability to pay
D.
A tax whose average rate rises as the tax base increases
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Correct Answer: D. A tax whose average rate rises as the tax base increases
Explanation:
Progressive taxation places a larger percentage burden on higher bases.
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A.
A refund issued automatically
B.
A bank statement
C.
A customs invoice only
D.
A formal declaration of taxable information and tax liability
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Correct Answer: D. A formal declaration of taxable information and tax liability
Explanation:
A tax return reports income, deductions, credits, and tax due or refundable.
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A.
The ability to print currency
B.
The speed of cash withdrawals only
C.
The number of depositors
D.
The condition in which assets exceed liabilities and capital absorbs losses
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Correct Answer: D. The condition in which assets exceed liabilities and capital absorbs losses
Explanation:
A solvent bank has positive net worth after recognizing losses.
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A.
The number of branches across a country
B.
The distance between ATMs
C.
The gap between assets and equity
D.
The difference between lending returns and deposit or funding costs
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Correct Answer: D. The difference between lending returns and deposit or funding costs
Explanation:
The interest spread is a major component of bank income.
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A.
Dividing authorization, custody, recording, and review among different people
B.
Giving one employee complete control
C.
Separating departments by building
D.
Rotating external auditors daily
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Correct Answer: A. Dividing authorization, custody, recording, and review among different people
Explanation:
Segregation reduces the opportunity for one person to commit and conceal errors or fraud.
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A.
A tax applying the same rate to all levels of the tax base
B.
A tax rate that rises with income
C.
A tax rate that falls with income
D.
A tax charged only on imports
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Correct Answer: A. A tax applying the same rate to all levels of the tax base
Explanation:
A proportional tax keeps the percentage rate constant.
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A.
Illegal concealment or misrepresentation to reduce tax
B.
Legal use of available deductions
C.
Choosing a lawful business structure
D.
Making an advance payment
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Correct Answer: A. Illegal concealment or misrepresentation to reduce tax
Explanation:
Tax evasion includes hiding income, false invoices, and deliberate underreporting.
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A.
Managing monetary policy, currency, reserves, and financial stability
B.
Selling consumer goods
C.
Preparing corporate accounts
D.
Collecting all private debts
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Correct Answer: A. Managing monetary policy, currency, reserves, and financial stability
Explanation:
Central banks typically issue currency and influence money and credit conditions.
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A.
A written instruction directing a bank to pay a specified amount
B.
A deposit certificate
C.
A loan agreement
D.
A government bond
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Correct Answer: A. A written instruction directing a bank to pay a specified amount
Explanation:
A cheque orders payment from the drawer's account to a payee.
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A.
Allow one person to receive, record, and reconcile cash
B.
Separate cash handling from recording and reconciliation
C.
Delay bank deposits
D.
Use unnumbered receipts
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Correct Answer: B. Separate cash handling from recording and reconciliation
Explanation:
Separating custody and recordkeeping improves accountability.
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A.
A tax whose rate rises with income
B.
A tax taking a larger percentage of income from lower-income taxpayers
C.
A tax paid only by companies
D.
A tax refunded to everyone
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Correct Answer: B. A tax taking a larger percentage of income from lower-income taxpayers
Explanation:
A tax can be regressive in economic effect even if its statutory rate is uniform.
