MCQ Collection
Accounting and Finance MCQs
Practice Accounting and Finance questions with answers and explanations.
Choose an option to check your answer.
A.
The office that collects tax
B.
The amount, value, or activity on which a tax is calculated
C.
The deadline for filing
D.
The tax refund only
Show Answer
Correct Answer: B. The amount, value, or activity on which a tax is calculated
Explanation:
A tax base may be income, sales, property value, or another measure.
Choose an option to check your answer.
A.
Tax paid only after an audit
B.
Tax deducted at the source before payment reaches the recipient
C.
Tax charged on unsold inventory
D.
A voluntary savings deposit
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Correct Answer: B. Tax deducted at the source before payment reaches the recipient
Explanation:
Employers, banks, or customers may withhold tax from payments.
Choose an option to check your answer.
A.
A deposit withdrawable only by cheque on demand
B.
A deposit placed for a specified period
C.
A bank loan
D.
A central bank reserve
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Correct Answer: B. A deposit placed for a specified period
Explanation:
Time deposits generally offer a return in exchange for limited access.
Choose an option to check your answer.
A.
A newly approved loan
B.
A loan with seriously overdue payments or doubtful collection
C.
A loan repaid early
D.
A loan secured by property
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Correct Answer: B. A loan with seriously overdue payments or doubtful collection
Explanation:
Nonperforming status indicates significant credit deterioration.
Choose an option to check your answer.
A.
The number of tax offices
B.
The total population
C.
The percentage or amount applied to a tax base
D.
The date of assessment
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Correct Answer: C. The percentage or amount applied to a tax base
Explanation:
The tax rate converts the base into a tax liability.
Choose an option to check your answer.
A.
To eliminate all tax returns
B.
To make every tax final
C.
To collect tax closer to the time income is earned and improve compliance
D.
To replace accounting records
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Correct Answer: C. To collect tax closer to the time income is earned and improve compliance
Explanation:
Withholding provides regular revenue and reduces collection risk.
Choose an option to check your answer.
A.
The bank's total profit
B.
The number of branches
C.
The ability to meet cash withdrawals and payment obligations when due
D.
The market value of buildings
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Correct Answer: C. The ability to meet cash withdrawals and payment obligations when due
Explanation:
A liquid bank holds cash or assets readily convertible into cash.
Choose an option to check your answer.
A.
A deposit from a customer
B.
A bank dividend
C.
An expense and allowance recognizing expected credit losses
D.
A tax refund
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Correct Answer: C. An expense and allowance recognizing expected credit losses
Explanation:
Banks estimate losses in their loan portfolio before specific defaults are resolved.
Choose an option to check your answer.
A.
A system used only for unique contracts
B.
A system excluding overhead
C.
A retail inventory method only
D.
A system averaging costs over large volumes of similar units
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Correct Answer: D. A system averaging costs over large volumes of similar units
Explanation:
Process costing suits continuous, homogeneous production.
Choose an option to check your answer.
A.
The amount of fixed cost
B.
The difference between price and variable cost
C.
Cash reserved for emergencies only
D.
Actual or budgeted sales above break-even sales
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Correct Answer: D. Actual or budgeted sales above break-even sales
Explanation:
Margin of safety measures how far sales can decline before a loss begins.
Choose an option to check your answer.
A.
A legal claim made by the auditor
B.
A tax rate
C.
A bank guarantee
D.
A representation by management embodied in the financial statements
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Correct Answer: D. A representation by management embodied in the financial statements
Explanation:
Assertions concern matters such as existence, completeness, valuation, rights, and presentation.
Choose an option to check your answer.
A.
A guarantee that all errors are prevented
B.
Only the internal audit department
C.
A list of accounting policies
D.
A process designed to provide reasonable assurance over objectives
Show Answer
Correct Answer: D. A process designed to provide reasonable assurance over objectives
Explanation:
Internal control supports reliable reporting, efficient operations, and compliance.
