Commerce Accountancy

Accounting Principles and Practices

2,324 Questions

Accounting principles and practices involve the preparation of trial balances, ledgers, and bank reconciliation statements. This area tests your knowledge of fundamental accounting concepts and routine business transactions. It is a core section in commerce exams and various competitive tests.

Ledger accountsTrial balance preparationBank reconciliation statementAccounting conceptsPrimary books of accounts

Accounting Principles and Practices Questions

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

ICICI Bank Account is _______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A bank account represents cash held by the business at a financial institution, which is an asset.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Personal Income Tax Account is ______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

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

Personal income tax paid by the proprietor using business funds is treated as a withdrawal of capital, thus it is in the nature of a capital account.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Bill Receivable Account is _______________.

  1. An Asset Account

  2. A liability Account

  3. A Revenue Account

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

Bills receivable represent a formal written promise from a customer to pay, which is a right to receive cash and thus an asset.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Capital Account is in the nature of _______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

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

The capital account represents the owner's residual interest in the assets of the business after deducting liabilities.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Accrued Interest Account is ______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Accrued interest is interest that has been earned but not yet received. It represents a future inflow of cash, making it an asset.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Proprietor's Account is in the nature of ________________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

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

The proprietor's account represents the owner's equity in the business, which is classified under the capital account.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Sales Tax Payable Account is ______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Sales tax payable represents tax collected from customers that must be remitted to the government, creating a liability.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Bank Deposit Account is _______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A bank deposit is cash held by the business in a bank, which is a liquid asset.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

M/s Ram & Sons Ltd's (a customer) is _____________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Capital Account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A customer account represents money owed to the business, which is a receivable and therefore an asset.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Creditors Account is ______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Creditors are parties to whom the business owes money for goods or services purchased on credit, making it a liability.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Advance to a supplier Account is _______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An advance paid to a supplier is a prepayment for goods or services not yet received, which is an asset.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Debtor's Account is ________________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A debtor is a customer who owes money to the business, which is a receivable and therefore an asset.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Ram's Account a customer is ______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A customer account represents a receivable, which is an asset for the business.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Ram's Capital Account is ______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

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

A capital account tracks the owner's investment and equity in the business.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Advance to an Employee Account is _______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An advance to an employee is a loan or prepayment that the employee owes back to the business, making it an asset.