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

What is the term used to describe the repatriation of profits by foreign investors?

  1. Remittances

  2. Dividends

  3. Royalties

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

Dividends are the portion of a company's profits that are distributed to its shareholders, including foreign investors.

Multiple choice

Which of the following is an example of a capital gain?

  1. Profit from the sale of a stock

  2. Interest from a savings account

  3. Rental income from a property

  4. Wages and salaries
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A capital gain is the profit realized from the sale of a capital asset, such as a stock.

Multiple choice

What is the formula for calculating the Net Present Value (NPV) of a project?

  1. NPV = Sum of Present Values of Cash Inflows - Sum of Present Values of Cash Outflows

  2. NPV = Sum of Future Values of Cash Inflows - Sum of Future Values of Cash Outflows

  3. NPV = Sum of Present Values of Cash Inflows / Sum of Present Values of Cash Outflows

  4. NPV = Sum of Future Values of Cash Inflows / Sum of Future Values of Cash Outflows
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Net Present Value (NPV) of a project is calculated by subtracting the sum of the Present Values of all cash outflows from the sum of the Present Values of all cash inflows over the project's lifetime.

Multiple choice

What is the accounting equation?

  1. Assets = Liabilities + Equity

  2. Assets = Liabilities - Equity

  3. Assets + Liabilities = Equity

  4. Assets - Liabilities = Equity
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The accounting equation states that the total assets of a company are equal to the sum of its liabilities and equity.

Multiple choice

What are the four main types of assets?

  1. Current Assets, Non-Current Assets, Fixed Assets, and Intangible Assets

  2. Current Assets, Non-Current Assets, Tangible Assets, and Intangible Assets

  3. Current Assets, Non-Current Assets, Physical Assets, and Intangible Assets

  4. Current Assets, Non-Current Assets, Operating Assets, and Non-Operating Assets
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The four main types of assets are Current Assets, Non-Current Assets, Fixed Assets, and Intangible Assets.

Multiple choice

What are the two main types of liabilities?

  1. Current Liabilities and Non-Current Liabilities

  2. Short-Term Liabilities and Long-Term Liabilities

  3. Operating Liabilities and Non-Operating Liabilities

  4. Secured Liabilities and Unsecured Liabilities
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The two main types of liabilities are Current Liabilities and Non-Current Liabilities.

Multiple choice

What is equity?

  1. The residual interest in the assets of a company after deducting its liabilities

  2. The total amount of money invested in a company by its owners

  3. The difference between a company's assets and its liabilities

  4. The net income of a company over a period of time
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Equity is the residual interest in the assets of a company after deducting its liabilities.

Multiple choice

What is the book value of a stock?

  1. The book value is the value of a company's assets minus its liabilities

  2. The book value represents the original price paid for a stock

  3. The book value is the same as the market value of a stock

  4. The book value is not a relevant factor in stock valuation
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The book value of a stock is calculated by subtracting a company's liabilities from its assets. It represents the equity value of the company and provides insights into its financial health.

Multiple choice

What expenses are deductible from rental income?

  1. Mortgage interest

  2. Property taxes

  3. Repairs and maintenance

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

Mortgage interest, property taxes, and repairs and maintenance are all deductible from rental income.

Multiple choice

Which of the following is not a deductible expense for rental property?

  1. Depreciation

  2. Utilities

  3. Insurance

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

Travel expenses are not deductible expenses for rental property.

Multiple choice

Which of the following is not a deductible expense for rental property?

  1. Depreciation

  2. Utilities

  3. Insurance

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

Travel expenses are not deductible expenses for rental property.

Multiple choice

Which of the following is not a deductible expense for rental property?

  1. Depreciation

  2. Utilities

  3. Insurance

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

Travel expenses are not deductible expenses for rental property.

Multiple choice

Which of the following is not a deductible expense for rental property?

  1. Depreciation

  2. Utilities

  3. Insurance

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

Travel expenses are not deductible expenses for rental property.

Multiple choice

Which of the following is not a deductible expense for rental property?

  1. Depreciation

  2. Utilities

  3. Insurance

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

Travel expenses are not deductible expenses for rental property.

Multiple choice

Which of the following is not a deductible expense for rental property?

  1. Depreciation

  2. Utilities

  3. Insurance

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

Travel expenses are not deductible expenses for rental property.