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 economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

Which of the following is a stock?

  1. Savings

  2. Production

  3. Consumption of fixed capital

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

Capital is a stock since it is measured at a point of time. Capital is not time dimensional. It is not measured over a specified period of time like flow. Therefore, capital is a stock concept.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

The following statements true or false? Give reasons.
Both 'Expected Obsolescence' and 'Unexpected Obsolescence' are considered for determining the amount of depreciation.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Both 'Expected Obsolescence' and 'Unexpected Obsolescence' are considered for determining the amount of depreciation- this is a false statement since only expected obsolescence is considered for determining the amount of depreciation. It has two components: loss of value of fixed assets due to change in technology and change in demand.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

Depreciation means ___________________.

  1. Destruction of a plant in a fire accident

  2. Loss of fixed assets overtime due to wear and tear

  3. Loss of fixed assets in an earthquake

  4. Closure of the plant due to lockout
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Depreciation means loss of fixed assets overtime due to wear and tear. Depreciation is also called consumption of fixed capital. Loss of fixed assets happen on account of normal wear and tear, normal rate of accidental damages and expected obsolescence.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

Depreciation of fixed capital assets refers to _______________.

  1. Normal wear and tear

  2. Foreseen obsolescence

  3. Normal wear & tear & foreseen obsolescence

  4. Unforeseen obsolescence
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Depreciation of fixed capital assets refers to normal wear and tear and foreseen obsolescence. Depreciation is also called consumption of fixed capital. Loss of fixed assets happen on account of normal wear and tear, normal rate of accidental damages and expected obsolescence.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

Unforeseen obsolescence of fixed capital assets during production is ________________.

  1. Consumption of Fixed Capital

  2. Capital Loss

  3. Income Loss

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Unforeseen obsolescence of fixed capital assets during production is capital loss. Unforeseen obsolescence which may happen due to natural calamity is not taken into account while calculating depreciation and hence, it causes capital loss.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

_______ investment refers to the investment made without reference to income or profit.

  1. Induced

  2. Autonomous

  3. Inventory

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

Autonomous investment is done without taking into account the income of the investor or the profit that can be generated from investment. This type of investment is majorly done with the objective of public welfare or infrastructure development by the government or public sector.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

When interest on capital is allowed _________ is credited.

  1. Capital A/c

  2. Profit and loss A/c

  3. Cash A/c

  4. None
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Journal entries for Interest on Capital: 

Interest on capital is an appropriation (setting apart) of profit. If a firm has earned profit, it will have a credit balance in the P & L Appropriation A/c.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Commission due but not paid to the manager at d end of the years appears under __________ side.

  1. Asset

  2. Liability

  3. Trading A/c Debit side

  4. None
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Outstanding Expense A/c appears on the liability side of the Balance Sheet. While preparing the Trading and Profit and Loss A/c we need to add the amount of outstanding expense to that particular expense.