Commerce Accountancy

Accounting Principles and Practice

1,227 Questions

Accounting principles and practice questions cover core concepts like assets, depreciation, financial statements, and ledger adjustments. These topics are essential for commerce students preparing for academic and competitive exams. Regular practice ensures a strong grasp of standard accounting standards and business operations.

Asset depreciationFinancial statement adjustmentsAccounting standardsSingle entry systemCapital expenditure

Accounting Principles and Practice Questions

Multiple choice

Which Assets are classifed as Fixed and Current Assets?

  1. Only Current Assets

  2. Only fixed assets

  3. Only past assets

  4. Fixed and Current Assets

  5. None of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

 Fixed Assets are meant for long term use Such as Land, Building and Plant and Machinery etc. While Current Assets are either Cash or Cash Equivalent Or can be converted into Cash within one year

Multiple choice

What is a 'weak unit'?

  1. An industry whose more than 70% of net worth is eroded.

  2. An industry whose about 50% of net worth is eroded.

  3. An industry that has been in existence for not less than 5 years and is found at the end of an accounting year to have accumulated losses to such an extent that its net worth is completely eroded.

  4. An industry whose less than 25% of net worth is eroded.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

An industry that has been in existence for not less than 5 years, and is found at the end of an accounting year to have accumulated losses to such an extent that its net worth is completely eroded.

Multiple choice

The rent payable to the partner for the use of his building should be

  1. debited to profit and loss appropriation account

  2. credited to profit and loss appropriation account

  3. debited to profit and loss account

  4. credited to profit and loss account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

It is the correct answer. The rent paid to the partner is a charge. Thus, it should be debited to this account.

Multiple choice

Depreciation is charged on the _____ of assets.

  1. market value

  2. book value

  3. future value

  4. realisable value
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Depreciation is charged on the book value of assets. Book value refers to the cost of asset to the business less depreciation charged till date.

Multiple choice

The total cost of asset debited at the time of purchase does not include

  1. installation charges

  2. freight paid on bringing asset to the business

  3. interest on loan after the purchase of asset

  4. repair or alteration made at the time of purchase
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

It is the interest paid after the asset has been purchased and installed. Thus, it is a revenue expenditure and is not a part of the cost of asset.

Multiple choice

The amount of depreciation account should be transferred to

  1. profit and loss appropriation account

  2. profit and loss account

  3. trading account

  4. balance sheet
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The amount of depreciation should be ultimately debited to profit and loss account. Depreciation is a charge against the profits.