Commerce Accountancy

Accounting Principles and Practices

2,416 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

'Sans Frais' words are added at the end of the endorsement to indicate that

  1. no expenses should be incurred on account of the bill

  2. expenses should be incurred on account bill

  3. expenses should be incurred on account of the bill only to the extent of 5% of the bill amount

  4. expenses should be incurred on account of the bill only to the extent of 10% of the bill amount
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Where the endorser does not want the endorsee or any subsequent holder to incur any expense on his account on the instrument, the endorsement is ‘sans frais’.

Multiple choice

What is the nature of goodwill account?

  1. It is a revenue expenditure.

  2. It is a current asset.

  3. It is a liability.

  4. It is a fixed asset.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Goodwill is an intangible fixed asset. So, this is the correct answer.

Multiple choice

Stock is appearing in the books at Rs. 36,000 and it is undervalued by 20%. How to treat it in the revaluation account?

  1. Credit revaluation account by Rs. 9,000

  2. Debit revaluation account by Rs. 9,000

  3. Rs. 6,000 to be debited to revaluation account

  4. Credit revaluation by Rs. 6,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

This is the correct answer. The correct value of stock is 36000 * 100/80 = Rs. 45,000. So, there is a profit of Rs. 9,000 and should be credited to revaluation account.

Multiple choice

Which of the following is a legal compulsion?

  1. Management accounting

  2. Financial accounting

  3. Human resources accounting

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

It is a legal compulsion as it is required to calculate profits or loss.

Multiple choice

The capital expenditure should be shown in the financial accounts in

  1. asset side of balance sheet

  2. liability side of balance sheet

  3. debit side of profit and loss account

  4. debit side of trading account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

It is the correct option. These are the payments made for the purchase of items like machinery, furniture, building etc. and are thus an asset.

Multiple choice

The amount debited to purchase account consists of

  1. purchase of goods and assets

  2. purchase of goods on credit only

  3. purchase of goods for cash only

  4. purchase of goods on cash as well as on credit basis
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

It is the correct answer. Both types of purchases are debited to purchase account.