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Adjusting and Closing Entries MCQs for Competitive Exams

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Adjusting and Closing Entries MCQs for Competitive Exams

Practice with answers, explanations, and exam-focused revision notes.

33 MCQs Page 2

Topic Notes: Adjusting and Closing Entries

These notes summarize the key preparation context before you attempt the MCQs. Review the topic focus, then practice the questions below with answers and explanations.

Quick Overview

Adjusting and Closing Entries MCQs in Commerce are useful for candidates who need targeted practice for CSS, PMS, FPSC, PPSC, NTS, entry tests, and other competitive exams in Pakistan. This topic page is designed for quick revision, repeated practice, and exam-focused preparation.

Attempt the questions page by page, check the correct answers, read the explanations where available, and compare your weak areas with past papers and mock test performance. Consistent MCQ practice improves speed, confidence, and retention for objective exam sections.

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11
How does a reduction in the provision for bad debts affect a company's net income?
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12
If the initial net profit is Rs. 3,60,000, with outstanding salary of Rs. 20,000 and prepaid insurance of Rs. 26,000, what is the adjusted net profit?
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13
Where should prepaid rent be reported if it appears in the trial balance?
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14
On which balance sheet item is the provision for bad debts typically calculated?
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15
What is the impact on net profit if a firm fails to record bad debts?
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16
A company purchased 8% bonds with a face value of Rs. 10,00,000 for Rs. 12,00,000 on January 1, 2003. Interest is paid semi-annually on June 30 and December 31. For the financial year ending March 31, 2003, what amount of accrued interest should be recognized?
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17
When recording an adjustment for interest on capital, which account is credited?
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18
In financial reporting, how are outstanding salaries categorized?
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19
Which accounts are impacted when recording an adjusting entry for prepaid expenses?
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20
What is the correct adjusting entry to record outstanding rent at the end of an accounting period?
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