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Past Papers and Online Practice Quiz for Account Branch
Find here the best notes with past papers and past experience of Account MCQs, which are very helpful and important for PAF Account Branch tests. Moreover, these questions (MCQs) help in the preparation of account tests for the Pak Army and Pak Navy also.
If you have applied for the PAF Account Branch, then you must read the following MCQs. The syllabus includes Commerce, Finance, and Accounting.
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MCQs of Accounts Branch (Part-1)
Q: Identify which of the following organizations prepares "The Doing Business Report" every year:
(A) World Bank
(B) Asian Development Bank (ADB)
(C) International Monetary Fund (IMF)
(D) World Trade Organization (WTO)
Answer: (A) World Bank.
Q: Accounting for Intangible Assets is related to which Accounting Standard (AS)?
(A) AS - 10
(B) AS - 12
(C) AS - 24
(D) AS - 26
Answer: (D) AS - 26.
Q: Recording of capital contributed by the owner as a liability ensures the adherence to which principle?
(A) Consistency
(B) Going concern
(C) Separate entity
(D) Materiality
Answer: (C) Separate Entity.
Q: Bad loans in banking terminology are generally known as:
(A) BPOs
(B) Prime Asset
(C) NPAs
(D) CBS
Answer: (C) NPAs (Non-Performing Assets).
Q: Identify the minimum number of members required for the registration of a cooperative society:
(A) Two
(B) Seven
(C) Ten
(D) Twenty
Answer: (C) Ten.
Q: A machinery is purchased for Rs. 3,00,000 and Rs. 50,000 is spent on its installation. What will be the total amount of capital expenditure?
(A) Rs. 3,00,000
(B) Rs. 3,50,000
(C) Rs. 3,55,000
(D) None of these
Answer: (B) Rs. 3,50,000.
Q: Which of the following errors are NOT disclosed by a Trial Balance?
(A) Compensatory Errors
(B) Errors of Principle
(C) Errors of Omission
(D) All the three
Answer: (D) All the three.
Q: Identify the country where the Double Entry System was first introduced:
(A) America
(B) Japan
(C) India
(D) Italy
Answer: (D) Italy.
Q: Select the option that best describes what a management audit implies:
(A) Complete audit
(B) Detailed audit
(C) Efficiency audit
(D) Interim audit
Answer: (C) Efficiency audit.
Q: Where does an auditor of a cooperative society submit the final audit report?
(A) To the managing committee of the society only
(B) To the Registrar of Cooperative Societies only
(C) To the State Assembly concerned
(D) To the Registrar of Cooperative Societies and a copy to the society
Answer: (B) To the Registrar of Cooperative Societies of the State concerned only.
MCQs of Accounts Branch (Part-2)
Q: Select the correct definition of a Work Sheet:
(a) Balance Sheet
(b) Fund Flows Statement
(c) A combination of Profit and Loss Account and Balance Sheet items
(d) None of these
Answer: (c) A combination of Profit and Loss Account and Balance Sheet items.
Q: Identify the correct mathematical formula to compute the Quick Ratio:
(a) Quick Assets/Quick Liabilities
(b) Quick Liabilities Current Assets
(c) Current Assets/ Current Liabilities
Answer: (a) Quick Assets/Quick Liabilities.
Q: Every limited Company in Pakistan is required by law to include the following along with financial reports:
(a) Ratio Analysis
(b) Chairman’s Review
(c) None of these.
Answer: (c) None of these.
Q: Select what is included in the process of Verification:
a. Checking Vouchers
b. Examining audit report
c. None of the above
Answer: (c) None of the above.
Q: State whether True or False: Rent of the premises constitutes variable expenses for cost allocation.
(a) True
(b) False
Answer: (b) False.
Q: Sugar used in a sugarcane company is categorized as:
(a) Variable cost
(b) Fixed cost
(c) None of these
Answer: (a) Variable cost.
Q: An auditor is liable under the following circumstances:
(a) Third Party Liabilities
(b) Fraud perpetrated in highly sophisticated circumstances
(c) None of these
Answer: (a) Third Party Liabilities.
Q: State whether True or False: Agricultural income is taxable under the Income Tax Laws of Pakistan.
(a) True
(b) False
Answer: (b) False.
Q: True or False: Principal and markup payment within one year constitutes long term liability for disclosure.
(a) True
(b) False
Answer: (b) False.
Q: Ordinarily, select the number of partners allowed in a partnership in Pakistan under the Partnership Act 1932:
(a) 10
(b) 20
(c) 30
(d) None of these
Answer: (b) 20.
Q: State whether True or False: Working Capital finance can be termed as “Running Finance” in a limited company.
(a) True
(b) False
Answer: (a) True.
Q: True or False: Income from Capital gains arising out of trading on a stock exchange in Pakistan is taxable these days.
(a) True
(b) False
Answer: (a) True.
Q: Identify the correct method to calculate Conversion Cost:
(a) Labour Plus Materials
(b) Labour plus overheads
(c) None of these
Answer: (b) Labour plus overheads.
Q: Select the correct formula for the Current Ratio:
(a) Current Liabilities/Current Assets
(b) Current Assets/Current Liabilities
(c) None of these
Answer: (b) Current Assets/Current Liabilities.
Q: Choose the correct calculation for the Acid Test Ratio:
(a) Current Assets/Current Liabilities
(b) Fixed Assets/Current Liabilities
(c) Liquid Assets/Current Liabilities
(d) None of these
Answer: (c) Liquid Assets/Current Liabilities.
Q: Determine if Deferred Cost is classified as:
(a) Liability
(b) Asset
(c) None of these
Answer: (b) Asset.
Q: Banks are governed under which law for the preparation of financial statements?
(a) Banking Companies Ordinance, 1962
(b) State Bank of Pakistan Act
(c) None of these
Answer: (a) Banking Companies Ordinance, 1962.
Q: Identify the formula used to compute Return on Investment:
[Image of return on investment ROI formula]
(a) Investment/Profit x 100
(b) Profit x 100/Investment
(c) None of these
Answer: (b) Profit x 100/Investment.
Q: Select the correct components for calculating Prime Cost:
(a) Manufacturing Cost/Cost of Goods Sold
(b) Direct Method plus factory overheads
(c) Direct labour + Direct Material
(d) None of these
Answer: (c) Direct labour + Direct Material.
Q: Process Costing is very much applicable in which of the following?
(a) Construction Industry
(b) Pharmaceutical Industry
(c) Air line company
(d) None of these
Answer: (b) Pharmaceutical Industry.
Q: Identify the meaning of Random Sampling in auditing:
(a) Selection through convenience sampling
(b) Selection through scientific sampling approach
(c) None of these
Answer: (b) Selection through scientific sampling approach.
Q: Increase in income constitutes:
(a) Inflows
(b) Outflows
(c) None of these
Answer: (a) Inflows.
Q: Identify the correct full form for M & A:
(a) Mergers & Analysis
(b) Mergers & Acquisitions
(c) Mergers & Allocation
(d) None of these
Answer: (b) Mergers & Acquisitions.
Q: An endowment insurance policy can be taken in respect of:
(a) Fire insurance
(b) Accident insurance
(c) Life insurance
(d) None of these
Answer: (c) Life insurance.
Q: Maximum number of partners in a partnership firm set up in Pakistan under Partnership Act, 1932 is:
(a) 5
(b) 25
(c) 20
(d) None of these
Answer: (c) 20.
Q: Depreciation is based on:
(a) Economic life of asset
(b) Declared life of asset by supplier
(c) Normal life of asset
(d) None of these
Answer: (a) Economic life of asset.
Q: Inventory turnover is calculated as under:
(a) Cost of Goods sold/Closing Inventory
(b) Gross profit/Closing Inventory
(c) Sales/Opening Inventory
(d) None of these
Answer: (a) Cost of Goods sold/Closing Inventory.
Q: The measureable value of an alternative use of resources is referred to as:
(a) An opportunity cost
(b) An imputed cost
(c) A different cost
(d) A sunk cost
Answer: (a) An opportunity cost.
Q: Identify the term for a quantitative expression of management objectives:
(a) Organizational chart
(b) Management chart
(c) Budget
(d) Procedural chart
Answer: (c) Budget.
Q: Select the best definition for a Cost Center:
(a) A unit of production in relation to which costs are ascertained
(b) A location which is responsible for controlling direct costs
(c) Part of the factory overhead system by which costs are gathered
(d) Any location or department which incurs cost
Answer: (d) Any location or department which incurs cost.
Q: At break-even (400 units, VC Rs.400, FC Rs.200), what will the 401st unit contribute to profit?
(a) Rs. 0.00
(b) Rs. 0.50
(c) Rs. 1.00
(d) Rs. 1.50
Answer: (b) Rs. 0.50.
Q: In utilizing currently idle capacity, which of the following costs is irrelevant?
(a) Materials
(b) Depreciation
(c) Direct labour
(d) Variable factory overhead
Answer: (b) Depreciation.
Q: Select the statement that accurately describes a Fixed Cost:
(a) May change in total when such change is not related to production
(b) Will not change in total because it is not related to production
(c) Is constant per unit for each unit of change in production
(d) May change in total, depending on production within relevant range
Answer: (a) May change in total when such change is not related to changes in production.
Q: Completion of a job results in which journal entry?
(a) DR finished goods …….. CR WIP
(b) DR Cost of goods ……... CR finished goods
(c) DR WIP ……………..….….. CR FOH control
(d) DR FOH control …….….. CR FOH applied
Answer: (a) DR finished goods …….. CR WIP.
Q: Operating cost is often named as:
(a) Manufacturing cost plus commercial expenses
(b) Prime cost plus factory overheads
(c) Direct material plus direct labour
(d) Selling plus administrative expenses
Answer: (a) Manufacturing cost plus commercial expenses.
MCQs of Accounts Branch (Part-3)
Q: Expenses such as rent and depreciation of a building are shared by several departments; these are:
(a) Indirect expenses
(b) Direct expenses
(c) Joint expenses
(d) All of the above
(e) None of these
Answer: (c) Joint expenses.
Q: If under applied FOH is closed to cost of goods sold, identify the correct journal entry:
(a) DR Cost of goods sold …….. CR FOH control
(b) DR FOH control ……..……….. CR Cost of goods sold
(c) DR FOH control ……..……….. CR Profit % loss account
(d) None of these
Answer: (a) DR Cost of goods sold …….. CR FOH control.
Q: Select the correct term for the time lag between indenting and receiving material:
(a) Lead time
(b) Idle time
(c) Stock out time
(d) None of these
Answer: (a) Lead time.
Q: Direct material cost plus direct labour cost is technically called:
(a) Prime cost
(b) Conversion cost
(c) Product cost
(d) All of these
(e) None of these
Answer: (a) Prime cost.
Q: A segment of the business that generates both revenue and cost is known as:
(a) Profit Center
(b) Cost Center
(c) Cost driver
(d) All of these
(e) None of these
Answer: (a) Profit Center.
Q: Select the correct method through which audit of a bank is generally conducted:
(a) Routine checking
(b) Vouching
(c) Balance sheet audit
(d) None of these
Answer: (c) Balance sheet audit.
Q: Economic resources of a business expected to provide future benefit are referred to as:
(a) Liabilities
(b) Owner’s equity
(c) Withdrawals
(d) Assets
(e) None of these
Answer: (d) Assets.
Q: Choose the correct classification for books of original entry:
(a) Ledger
(b) Work sheets
(c) Journal
(d) None of these
Answer: (c) Journal.
Q: Unpaid and unrecorded expenses are classified as:
(a) Prepaid expenses
(b) Accrued expenses
(c) Additional expenses
(d) None of these
Answer: (b) Accrued expenses.
Q: Select the effect that the investment of personal assets by the owner has:
(a) Increases total assets and increases owner’s equity
(b) Increases total assets only
(c) Has no effect on assets but increases owner’s equity
(d) Increase assets and liabilities
Answer: (a) Increases total assets and increases owner’s equity.
Q: Identify the account type that would usually have a debit balance:
(a) Cash
(b) Creditors
(c) Accounts payable
(d) Salaries Expenses
(e) None of these
Answer: (a) Cash.
Q: Identify the components included in Quick Assets:
(a) Cash
(b) Accounts Receivable
(c) Inventories
(d) Only (a) and (b)
Answer: (d) Only (a) and (b).
Q: Determine the correct calculation for Conversion cost:
a. Material Cost + Overhead Cost
b. Direct Labour + Material Cost
c. Labour Cost + Overhead Cost
Answer: (c) Labour Cost + Overhead Cost.
Q: Select the option that best describes Operating Profit:
a. Profit after deducting financial costs
b. Profit after deducting taxes
c. Profit after deducting normal operating expenses including depreciation
Answer: (c) Profit after deducting normal operating expenses including depreciation.
Q: Identify the meaning of a Stratified audit sample:
a. Randomly selected items for audit
b. Purposively selected items for audit
c. Items carefully selected from each group
Answer: (c) Items carefully selected from each group.
Q: Income Tax is levied on:
a. Agricultural Income
b. Presumptive Income
c. None of above
Answer: (b) Presumptive Income.
Q: If a firm has paid super-tax, its partners may follow any one of the following behaviours:
a. No need to pay income tax, even if it exceeds limit.
b. Pay income tax, even if it does not exceed income.
c. Pay income tax as required under the law.
Answer: (c) Pay income tax as required under the law.
Q: A resident multinational company need not:
a. Pay income tax, if caused under Double Taxation agreement.
b. If not enjoying tax exemption under Ordinance 1979.
c. None of above
Answer: (a) Pay income tax, if caused under Double Taxation agreement.
Q: Income Tax rates are the same for:
a. Limited Companies
b. Banking Companies
c. None of above
Answer: (c) None of above.
Q: Super Tax on companies is:
a. In vogue in Pakistan
b. Not in vogue in Pakistan
c. None of above
Answer: (b) Not in vogue in Pakistan.
Q: Current Ratio is calculated as:
a. Fixed Assets/Current Liabilities
b. Current Liabilities/Current Assets
c. Current Assets/Current Liabilities
Answer: (c) Current Assets/Current Liabilities.
Q: Short-term loan can be described as:
a. If the period is three years
b. If the period is less than one year
c. If the period is over one year
Answer: (b) If the period is less than one year.
Q: A partnership, under current law in Pakistan, can have partners:
a. 50
b. 20
c. 100
Answer: (b) 20.
Q: Combination can be best described as:
a. Restructuring of Capital of a Company
b. Reduction of Capital of a Company
c. Amalgamation of two different types of businesses
Answer: (c) Amalgamation of two different types of businesses.
Q: Sources of funds can be increased by:
a. Describing selling prices
b. Increasing expenditure
c. None of above
Answer: (c) None of above.
Q: Double entry book-keeping was fathered by:
(a) F.W.Taylor
(b) Henry Fayol
(c) Lucas Pacioli.
Answer: (c) Lucas Pacioli.
Q: Funds Flow Statement and sources and application statement are:
(a) Synonymous
(b) Antagonistic
(c) None of these.
Answer: (a) Synonymous.
Q: Depreciation in spirit is similar to:
(a) Depletion
(b) Amortization
(c) Depression.
Answer: (b) Amortization.
Q: Balance Sheet is always prepared:
(a) for the year ended.
(b) As on a specified date.
(c) None of these.
Answer: (b) As on a specified date.
Q: In Insurance, the following Profit and Loss Accounts are prepared:
(a) Separate for Fire, Marine, and Accidents etc.
(b) Consolidated for Fire, Marine, and Accidents etc.
(c) None of these.
Answer: (a) Separate for Fire, Marine, and Accidents etc.
Q: Flexible budget is a budget with the following features:
(a) Changes with volume of production.
(b) Changes with variable expenses
(c) Changes in Direct material.
Answer: (a) Changes with volume of production.
Q: Break Even can be calculated as under:
[Image of the break-even point formula]
(a) VC_FC- TR TC
(b) FCI- VC TR
(c) None of these
Answer: (c) None of these.
Q: Quick Ratio can be computed as under:
(a) Quick Assets/Quick Liabilities
(b) Quick Liabilities/Current Assets
(c) Current Assets/Current Liabilities
Answer: (a) Quick Assets/Quick Liabilities.
Q: In straight line method of depreciation, the WDV at end of life is:
(a) Rupee one
(b) Rupee zero
(c) None of these
Answer: (b) Rupee zero.
Q: Sales budget must be prepared:
(a) Independently
(b) Depending on production capacity
(c) Based on Sales forecasts of market
Answer: (c) Based on Sales forecasts of market.
Q: Consolidation of subsidiary accounts for unlisted Holding companies is:
(a) Compulsory
(b) Voluntary
(c) Required.
Answer: (c) Required.
Q: Retained earning is synonymous to:
(a) Accumulated profit and loss account
(b) Profit for the year
(c) None of these.
Answer: (a) Accumulated profit and loss account.
Q: The requirements of an audit report for a Banking Company is under:
(a) Banking Companies Ordinance, 1962.
(b) Companies Ordinance, 1984.
(c) Under (a) and (b) above.
Answer: (c) Under (a) and (b) above.
Q: Deferred Taxation is:
(a) Fixed asset
(b) Fixed liabilities
(c) Part of Owners Equity.
Answer: (b) Fixed liabilities.
Q: Investment Corporation of Pakistan follows:
(a) Open-end mutual funds
(b) Closed-end mutual funds
(c) None of these.
Answer: (b) Closed-end mutual funds.
Q: Directors Report is ---- in respect of financial report constituent:
(a) Mandatory for a limited Company
(b) Voluntary for a limited Company
(c) None of these.
Answer: (a) Mandatory for a limited Company.
Q: Limited Companies in Pakistan are required by law to include:
(a) Ratio Analysis
(b) Chairman’s Review
(c) None of these.
Answer: (c) None of these.
Q: Cash budget excludes the following:
(a) Non-Cash items
(b) Cash items
(c) Purchase on Credit items.
Answer: (a) Non-Cash items.
Q: NGOs are legally required to:
(a) Prepare accounts in a prescribed manner.
(b) Prepare accounts as desired by donors.
(c) None of these
Answer: (a) Prepare accounts in a prescribed manner.
Q: The main source(s) of Generally Accepted Accounting Principles (GAAP) is/are:
(A) Company Law
(B) Accounting standards
(C) Both A and B
(D) None of these
Answer: (C) Both A and B.
Q: Standards used to prepare financial statements by most countries:
(A) International Financial Reporting Standards
(B) International Financial Accounting Standards
(C) International Accounting & Auditing Standards
(D) International Risk Reporting Standards
Answer: (A) International Financial Reporting Standards.
Q: The correct form of Accounting equation is:
(A) Assets + Liabilities = Equity
(B) Assets – Liabilities = Equity
(C) Assets – Receivable = Equity
(D) Assets + Receivable = Equity
Answer: (B) Assets – Liabilities = Equity.
Q: What would be the total sale on the financial statement for the given transaction?
(A) $0
(B) $5,000
(C) $10,000
(D) $15,000
Answer: (D) $15,000.
Q: Advance payments are recognized as:
(A) receivable
(B) payable
(C) bad debt
(D) none of these
Answer: (B) payable.
Q: What from the following is NOT a current asset?
(A) Patent rights
(B) Inventory
(C) Cash
(D) Trade receivables
Answer: (A) Patent rights.
Q: What from the following is NOT a non-current asset?
(A) Capital
(B) Property
(C) Patent rights
(D) Inventory
Answer: (D) Inventory.
Q: What from the following is/are NOT tangible asset(s)?
(A) I only
(B) II only
(C) I and II only
(D) I, II and III
Answer: (C) I and II only.
Q: The cost of the machine based on given price and charges is?
(A) $1,000
(B) $1,500
(C) $2,000
(D) $2,500
Answer: (D) $2,500.
Q: Depreciable amount is calculated as:
(A) Cost of asset + Residual value
(B) Cost of asset – Residual value
(C) Residual value – Cost of asset
(D) None of these
Answer: (B) Cost of asset – Residual value.
More Notes of PAF Account Branch in PDF
Free PDF Notes-1 of Accounts Branch
Free PDF Notes-2 of Accounts Branch
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