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
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australian securities exchange
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new department of fair trading
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australian securities and investment commission
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australian competition and consumer commission
C
Correct answer
Explanation
The Australian Securities and Investments Commission (ASIC) is the government body responsible for regulating corporations and investigating financial misconduct, including falsified records.
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statement of equity
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cash flow statement
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income statement
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balance sheet
B
Correct answer
Explanation
The cash flow statement specifically tracks the inflows and outflows of cash from operating, investing, and financing activities.
A
Correct answer
Explanation
Source documents, such as invoices and receipts, serve as the objective evidence for transactions. They provide the necessary data to initiate the accounting process.
A
Correct answer
Explanation
A trial balance is a list of all general ledger account balances. If transactions are not posted, the ledger balances will be incomplete, making the trial balance inaccurate.
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debiting Cash and crediting Service Revenue.
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debiting Service Revenue and crediting Cash.
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debiting Cash and crediting Accounts Payable.
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debiting Accounts Payable and crediting Cash.
A
Correct answer
Explanation
Receiving cash increases the asset account Cash (debit). Earning revenue increases the revenue account (credit).
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enter the balance.
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enter the debit.
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enter the date.
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enter the credit.
A
Correct answer
Explanation
Journalizing involves recording the date, the accounts to be debited and credited, and the amounts. Entering the balance is a step performed in the ledger, not the journal.
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alphabetical order.
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numerical order.
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chronological order.
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the order they are created.
B
Correct answer
Explanation
The chart of accounts is organized numerically, typically following the order of the financial statements (Assets, Liabilities, Equity, Revenue, Expenses).
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debiting account(s) that are affected.
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crediting account(s) that are affected.
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posting the debits and credits to the accounts.
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entering the date.
C
Correct answer
Explanation
Journalizing is the act of recording transactions in the journal. Posting is a separate subsequent step where those entries are transferred to the ledger.
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the title of each account affected.
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the amounts.
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a brief description.
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the balance of the accounts affected.
D
Correct answer
Explanation
A journal entry requires the date, the account titles, the debit/credit amounts, and a description. The current balance of the accounts is not part of the journal entry itself.
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ledger and accounts.
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journal and ledger.
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ledger and financial statements.
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journal and financial statements.
B
Correct answer
Explanation
The Posting Reference column in the journal contains the account number from the ledger, and the journal page number is recorded in the ledger, creating a cross-reference between the two.
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account titles.
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the balance of the account.
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a description of special entries.
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footings.
C
Correct answer
Explanation
In a standard ledger account, the Item column is used to provide a brief description or explanation of special entries, such as adjusting entries or corrections.
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Enter the date of each transaction in the accounts.
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Enter the amount of each transaction in the accounts.
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Enter page of the journal that each transaction is posted.
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Enter the description of the entry.
D
Correct answer
Explanation
When posting, you transfer the date, the amount, and the journal reference. A description is generally not required in the ledger account unless it is a special entry.
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debiting Cash and crediting Accounts Receivable.
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debiting Cash and crediting Accounts Payable.
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debiting Accounts Payable and crediting Cash.
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debiting Delivery Equipment and crediting Cash.
C
Correct answer
Explanation
Paying an account payable reduces the liability (debit Accounts Payable) and reduces the asset Cash (credit Cash).
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ledger.
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account.
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cross-reference.
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book of original entry.
D
Correct answer
Explanation
The journal is the first place where transactions are recorded in chronological order, hence it is known as the book of original entry.
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with every transaction.
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as the first entry on a page.
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for the first and last transaction of the month.
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for the last transaction of the month.
B
Correct answer
Explanation
To keep the journal clean and organized, the month is written only once at the top of the page or for the first entry on a new page.