Expense MCQs
Which of the following is an example of an expense in accounting?
a) Accounts Receivable
b) Inventory
c) Rent
d) Accounts Payable
Answer: c) Rent
Expenses are recorded in which of the following financial statements?
a) Income statement
b) Balance sheet
c) Cash flow statement
d) Statement of retained earnings
Answer: a) Income statement
Which of the following is true regarding expenses?
a) They increase assets.
b) They decrease liabilities.
c) They decrease equity.
d) They have no effect on the accounting equation.
Answer: c) They decrease equity.
Which of the following is a fixed expense?
a) Utilities
b) Advertising
c) Salaries
d) Cost of goods sold
Answer: c) Salaries
Expense MCQs and Answers
An expense is recognized and recorded in accounting when:
a) The payment is made.
b) The goods or services are received.
c) The invoice is issued.
d) The expense is incurred.
Answer: d) The expense is incurred.
Which of the following represents an accrued expense?
a) Prepaid insurance
b) Unearned revenue
c) Wages payable
d) Accounts receivable
Answer: c) Wages payable
Depreciation is an example of which type of expense?
a) Operating expense
b) Non-operating expense
c) Financial expense
d) Extraordinary expense
Answer: a) Operating expense
Which of the following is a period cost?
a) Direct labor
b) Raw materials
c) Sales commissions
d) Manufacturing overhead
Answer: c) Sales commissions
An expense that has been incurred but not yet paid or recorded is called:
a) Accrued expense
b) Prepaid expense
c) Unearned revenue
d) Deferred expense
Answer: a) Accrued expense
Expense MCQs / Accounting MCQs
Which of the following methods is commonly used to allocate and record expenses over multiple accounting periods?
a) LIFO (Last-In, First-Out)
b) FIFO (First-In, First-Out)
c) Straight-line method
d) Weighted average method
Answer: c) Straight-line method
Which of the following is an example of an operating expense?
a) Interest expense
b) Income tax expense
c) Cost of goods sold
d) Depreciation expense
Answer: c) Cost of goods sold
Which of the following is a variable expense?
a) Rent
b) Insurance
c) Utilities
d) Property taxes
Answer: c) Utilities
An expense that has been paid in advance and is gradually recognized over time is called:
a) Accrued expense
b) Prepaid expense
c) Unearned revenue
d) Deferred expense
Answer: b) Prepaid expense
Which of the following represents a non-cash expense?
a) Salaries expense
b) Advertising expense
c) Bad debt expense
d) Amortization expense
Answer: d) Amortization expense
Expense Multiple Choice Questions and Answers
Which of the following is an example of a direct expense?
a) Office supplies
b) Rent
c) Indirect labor
d) Sales commission
Answer: d) Sales commission
Which of the following is a revenue-related expense?
a) Interest expense
b) Rent expense
c) Cost of goods sold
d) Marketing expense
Answer: c) Cost of goods sold
An expense that is not directly tied to the normal operations of a business is called:
a) Operating expense
b) Non-operating expense
c) Financial expense
d) Extraordinary expense
Answer: b) Non-operating expense
Which of the following is an example of a discretionary expense?
a) Rent
b) Salaries
c) Advertising
d) Utilities
Answer: c) Advertising
Which of the following is an example of a period cost?
a) Direct materials
b) Rent expense
c) Manufacturing overhead
d) Wages of production workers
Answer: b) Rent expense
Expense MCQs and Answers
An expense that is not expected to generate any future economic benefit is called:
a) Accrued expense
b) Prepaid expense
c) Non-recurring expense
d) Sunk expense
Answer: d) Sunk expense
Which of the following is an example of a variable cost?
a) Rent
b) Depreciation
c) Insurance
d) Direct labor
Answer: d) Direct labor
Which of the following expenses is classified as an administrative expense?
a) Cost of goods sold
b) Sales commissions
c) Rent expense
d) Office supplies expense
Answer: d) Office supplies expense
Which of the following is an example of an indirect expense?
a) Utilities
b) Advertising
c) Raw materials
d) Salaries
Answer: a) Utilities
Which of the following represents a prepaid expense?
a) Salaries payable
b) Accounts payable
c) Prepaid rent
d) Unearned revenue
Answer: c) Prepaid rent
Expense MCQs with Answers
Which of the following expenses is typically associated with manufacturing companies?
a) Rent expense
b) Research and development expense
c) Distribution expense
d) Cost of goods manufactured
Answer: d) Cost of goods manufactured
Which of the following expenses is considered a selling expense?
a) Advertising
b) Utilities
c) Depreciation
d) Interest expense
Answer: a) Advertising
Which of the following expenses is considered a non-operating expense?
a) Cost of goods sold
b) Interest expense
c) Salaries expense
d) Rent expense
Answer: b) Interest expense
Which of the following represents an accrued expense?
a) Accounts receivable
b) Unearned revenue
c) Prepaid insurance
d) Salaries payable
Answer: d) Salaries payable
Expense in Accounting MCQs
An expense that is directly associated with the production of goods or services is called:
a) Period cost
b) Manufacturing cost
c) Overhead cost
d) Operating cost
Answer: b) Manufacturing cost
Which of the following is an example of a discretionary fixed expense?
a) Rent
b) Depreciation
c) Research and development costs
d) Insurance
Answer: c) Research and development costs