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

What will be the correct entry for commission received of Rs. 500?

  1. Debit Cash account and credit bank account

  2. Debit bank account and credit cash account

  3. Debit Commission account and credit cash account

  4. Debit cash account and credit sales account

  5. Debit Cash account and credit commission received account with Rs. 500
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

Cash comes in, so cash account is credited. Commission is an item of income, so it will be credited.

Multiple choice

What is the first step of accounting process?

  1. Preparing the source document

  2. Post the transactions

  3. Recording the transactions

  4. Identifying the transactions

  5. None of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

This is the first step of accounting process.

Multiple choice

Discount allowed is deduction from which of the following?

  1. Discount account

  2. Cash account

  3. Account receivable

  4. Account payable

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Discount allowed is discount given to buyer that will be deducted from Account Receivable. A credit sale will increase Accounts Receivable, but the collection of the amount will decrease Accounts Receivable.

Multiple choice

According to accounting process, which of the following sequences is best justified?

  1. Transaction, source document, journal entry, ledger, trial balance

  2. Transaction, source document, journal entry, trial balance, ledger

  3. Source document Transaction, journal entry, trial balance, ledger

  4. Source document, Transaction, journal entry, ledger, trial balance

  5. Source document, Transaction, ledger journal entry, trial balance
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Transactions occurs, then the source documents are reduced to debit and credit in form of journal entry, then posted to ledger and from ledger trial balance is prepared.

Multiple choice

An incorrect journal entry is made by posting amount paid for servicing vehicle to motor vehicle account. Which of the following entries can be made to correct the previous entry?

  1. Debit motor vehicle account and credit vehicle maintenance account

  2. Debit vehicle maintenance account and credit cash account

  3. Debit cash account and credit motor vehicle account

  4. Debit vehicle maintenance account and credit motor vehicle account

  5. Entry cannot be corrected
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Motor vehicle entry needs to be reduced by making credit entry and debit the vehicle maintenance account.

Multiple choice

The balance sheet of a bank comprises of two sides; the assets side and the liabilities side. Which one of the following items comes under the side of 'Assets'?

  1. Subscribed capital

  2. Acceptance and endorsements

  3. Money at call and short notice

  4. Bills for collection
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In a bank's balance sheet, assets include items that the bank owns or is owed - cash, loans, investments. 'Money at call and short notice' refers to funds the bank has lent to other banks for very short periods (overnight or up to 14 days), which are assets for the lending bank. Options A (subscribed capital), B (acceptances and endorsements), and D (bills for collection) are all liability-side items - they represent obligations or amounts owed by the bank.

Multiple choice

To get Reversing Journal Voucher screen, which procedure must we follow?

  1. Gateway of Tally > Accounting Voucher > Click F5

  2. Gateway of Tally > Accounting Voucher > Click F10

  3. Gateway of Tally > Accounting Voucher > Click F6

  4. Gateway of Tally > Accounting Voucher > Click F4
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

This is the correct procedure to get to the reversing journal voucher screen. First, go to Gateway of Tally and select Accounting Voucher. Then, click F10 whereupon the reversing journal screen will appear.