Commerce Accountancy

Accounting Principles and Practice

1,241 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

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A clerk from ABC Inc., receives a customer receipt that does not have sufficient information to identify the customer or invoice. Which is the correct method of entering the receipt in Oracle Accounts Receivable?

  1. A. Enter the receipt as an unapplied receipt.

  2. B. Enter the receipt as an unidentified receipt.

  3. C. Enter the receipt as an on-account receipt.

  4. D. Enter the receipt as a miscellaneous receipt.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

An unidentified receipt in Oracle Accounts Receivable is used when a payment is received without enough information to match it to a specific customer or invoice. This differs from unapplied receipts (customer known but not applied to specific invoices), on-account receipts (payments applied to customer's account balance), and miscellaneous receipts (non-invoice payments like interest or donations). The unidentified receipt type is specifically designed for this scenario.

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For the transaction related activities such as adjustments and discounts receivables derives the balancing segment value from the __________ account that is associated with the transactions

  1. A. Revenue

  2. B. Receivables

  3. C. Unapplied Cash

  4. D. Unbilled Receivables
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For adjustments and discounts in Oracle Receivables, the balancing segment value is derived from the Receivables account associated with the transaction. This ensures that accounting entries for these transaction-related activities maintain proper segment balancing. The Revenue account is for recording income, Unapplied Cash handles unapplied receipts, and Unbilled Receivables is for recognized revenue not yet billed - none of these are used for adjustments and discounts.

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Identify a statement that apply to Oracle Collections.

  1. A. It is a Web-based self-service application.

  2. B. It can be used to place an invoice in dispute.

  3. C. It enables customers to see their own Oracle Receivables account information, such as balances.

  4. D. It enables you to create transactions
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Oracle Collections is a module that allows collectors to manage customer accounts, including placing invoices in dispute when customers contest charges. Option A describes the iReceivables self-service application (customer-facing), Option C also describes iReceivables, and Option D is incorrect because Collections is for collecting on existing transactions, not creating new ones. Placing invoices in dispute is a core Collections functionality.

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You want an invoice to be due in four stages. To accomplish this, what should you do when creating the invoice?

  1. A. Assign an invoicing rule with four schedules

  2. B. Create four lines, and assign different payment terms to each line

  3. C. Assign payment terms that have four payment schedules

  4. D. Assign payment terms that have four discount periods defined
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Payment terms with multiple payment schedules allow invoices to be due in stages. By assigning payment terms that have four payment schedules defined, the invoice will automatically split into four due dates. Invoicing rules determine revenue recognition timing over multiple schedules, not payment due dates. Creating multiple lines with different payment terms would fragment the invoice logically rather than creating staged payment terms for a single invoice.

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A miscellaneous receipt is entered by mistake and posted to GL. What is the best method to reverse the miscellaneous receipt

  1. A. Carry out the standard reversal of the miscellaneous receipt

  2. B. Carry out the debit memo reversal of the miscellaneous receipt

  3. C. Create receivable activity adjustment for the reversal of the miscellaneous receipt

  4. D. Create a journal entry in general ledger to reverse the accounting impact created by the posting of the miscellaneous receipt.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Standard reversal is the correct method to reverse a miscellaneous receipt. Debit memo reversals apply to standard invoice-applied receipts when the customer's balance must be reinstated, and GL adjustments or manual adjustments bypass subledger integrity and fail to properly correct the receipt's subledger state.

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Non-invoice related transactions such as investment and interest income are known as _________ in Receivables.

  1. A. Standard Receipts

  2. B. miscellaneous receipts

  3. C. Cash Receipts

  4. D. Interest Receipts
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In Oracle Receivables, non-invoice related receipts, such as interest, investments, or refunds, are classified as miscellaneous receipts. Standard receipts are applied against specific customer invoices, and Cash Receipts or Interest Receipts are not the formal subledger terms for this category.

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___________is an asset that you construct over a period of time

  1. A. CIP Asset

  2. B. Capitalized Asset

  3. C. Expense Asset

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

CIP (Construction in Progress) Assets are capital assets that are being constructed or developed over an extended period before being placed in service. Unlike regular capitalized assets which are typically purchased ready-to-use, CIP assets track costs incurred during the construction phase.

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Whoch of the following is a manual asset addition method

  1. A. Quick Addition

  2. B. Detail Addition

  3. C. All of the above

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

Oracle Assets provides two manual methods for adding assets: Quick Additions (for simple assets requiring minimal information) and Detail Additions (for complex assets needing complete financial and depreciation details). Therefore, both options are correct.

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Which statement is true about retirement of an asset

  1. A. You retire assets by units or cost.

  2. B. You perform a mass retirement by retiring a group of assets.

  3. C. You retire an asset fully or partially when it is lost, stolen, damaged, sold, returned, or for any other reason that causes you to stop using it.

  4. D. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

All three statements are accurate features of asset retirement in Oracle Assets. Users can retire assets by specifying units or cost, perform mass retirements for groups, and initiate retirements for reasons like theft, damage, sale, or return.

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___________________report Forecasts depreciation for multiple scenarios using different depreciation criteria

  1. A. Forecast Depreciation

  2. B. Depreciation Forecast

  3. C. What - If Depreciation Analysis

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

The What-If Depreciation Analysis report allows users to simulate depreciation calculations using different depreciation methods, useful lives, or other criteria across multiple scenarios. This helps in planning and decision-making without affecting actual book depreciation.

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Which statement is incorrect about Calculate Gain and losses program

  1. A. Calculate gain or losses resulting from retirement

  2. B. Calulate the loss caused due to addition

  3. C. Calculate the accumulated depreciation for resinstated assets

  4. D. Calculate investment tax credit recapture for retired asset in tax book, if necessary
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Calculate Gains and Losses program processes retirements and reinstatements, calculating depreciation adjustments, ITC recapture, and final gain/loss. It does not compute any loss caused by asset additions, making this statement incorrect and the right selection.

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_____________method is used to change asset cost or depreciation information

  1. A. Reclassification

  2. B. Adjust financial information

  3. C. Transfers

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

The Adjust Financial Information method is used to modify an asset's cost or depreciation parameters after it has been added. Reclassification changes categories, transfers move assets between locations/employees, and additions add new costs rather than modify existing ones.

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____________ process assigns an asset to a new category

  1. A. Reclassification

  2. B. Adjust financial information

  3. D. Capitalization

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

Reclassification is the process of moving an asset from one category to another, which changes its depreciation rules and accounting treatment. Capitalization is creating assets from costs, depreciation is allocating cost over time, and adjusting financial information modifies costs rather than categories.

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CIP Assets can be added via

  1. A. Mass additions

  2. B. Manually

  3. C.Capital Projects

  4. D. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

CIP (Construction in Progress) Assets can be added through multiple channels: via Mass Additions from external systems, manually through direct entry, or through Capital Projects integration. The system supports all three methods depending on the source and complexity of the asset.

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If you retire an entire asset including all of its units and cost it is called

  1. A. Full Retirement

  2. B. Partial Retirement

  3. C. Reinstate retirement

  4. D. All of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When you retire an entire asset including all its units and associated cost, it is called Full Retirement. This differs from Partial Retirement where only some units are retired. Reinstate retirement would mean bringing back a previously retired asset.