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

Directions: Choose the correct option for the given question.

Depreciation is the diminution in the value of a fixed asset mainly due to ______ and lapse of time.

  1. obsolescence

  2. change in fashion

  3. use

  4. all of the above

  5. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Depreciation is the systematic allocation of the cost of a fixed asset over its useful life. The primary causes include physical wear and tear from use, as well as the passage of time.

Multiple choice

Prepaid expenses are shown under

  1. current liabilities

  2. current assets

  3. expenses

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

 Expenses are paid in advance treated as assets & are short term so shown under Current Assets.

Multiple choice

Wasting assets are

  1. assets which cannot be seen

  2. assets which are not really assets

  3. assets which have only a definite usefulness in the shape of minerals which they can yield

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 Wasting assets are the assets which only have a definite usefulness, until they can yield. or be productive. For example, the usefulness of an oil well, is finished, once the entire oil is extracted from it.

Multiple choice

Depreciation is concerned with

  1. wasting assets

  2. fictitious assets

  3. tangible fixed assets

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 Depreciation is concerned with fixed assets like, machinery, furniture, plant, truck, car etc. Their values fall down with the use and passage of time.

Multiple choice

Plant and machinery are the examples of

  1. fictitous assets

  2. current assets

  3. liquid assets

  4. fixed assets
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Fixed assets held for long time use in businss itself for the purpose of providing or producing of goods or services.

Multiple choice

Depreciation is a/an _____ expenditure.

  1. variable

  2. fixed

  3. direct

  4. indirect

  5. semi-variable
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Depreciation is considered a fixed cost because it is a non-cash expense that remains constant regardless of the level of production or sales volume. It is allocated over the useful life of an asset.

Multiple choice

Value added is the change in

  1. face value

  2. market value

  3. book value

  4. realisable value

  5. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Value added is defined as the difference between the value of output and the value of intermediate inputs. This represents the increase in market value created during the production process.