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

Posting in accounting means

  1. journalising

  2. writing the transaction in the ledger

  3. totalling

  4. balancing

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

Correct; from journal entries, ledgers are written with transactions accountwise.

Multiple choice

All of the following have debit balance, except

  1. loan to contractor

  2. goodwill

  3. wages outstanding account

  4. trade receivables account

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

Correct; wages outstanding is due within a short period. Hence, it does not show debit balance.

Multiple choice

Which of the following financial statements is the most important financial statement of the company that shows its position of assets and liabilities on a particular date?

  1. Balance sheet statement

  2. Profit and loss account statement

  3. Account receivable statement

  4. Cash transaction statement

  5. Callable statement
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

This financial statement is the most important financial statement of the company that shows its position of assets and liabilities on a particular date.

Multiple choice

Which of the following accounting self evident statements implies that a business unit is separate and distinct from the person who own or controls the business?

  1. Money measurement concept

  2. Accounting period concept

  3. Bussiness entity concept

  4. Convention of materiality

  5. Account receivable statement
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

This accounting self evident statement implies that a business unit is separate and distinct from the person who owns or control the business.

Multiple choice

Which of the following financial statements is a list of financial statements prepared monthly, quarterly or annually to find out the balance of each account?

  1. Account receivable statement

  2. Profit and loss account statement

  3. Cash transaction statement

  4. Prepared statement

  5. Trial balance statement
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

This financial statement is a list of financial statements prepared monthly, quarterly annually to find out the balance of each account.

Multiple choice

In which of the following accounting self evident statements, it is assumed that the business will exist for a long time and transactions are recorded on this basis?

  1. Money measurement concept

  2. Going concern concept

  3. Accounting period concept

  4. Convention of consistency

  5. Profit and loss account statement
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In this accounting self evident statement, it is assumed that the business will exist for a long time and transactions are recorded on this basis.

Multiple choice

Which of the following accounting activities attempts to summarise and present data in a predetermined format to various levels of management at regular intervals, for the purpose of evaluating performance?

  1. Financial accounting

  2. Cost accounting

  3. Farm accounting

  4. Cash transaction

  5. Management reporting
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

This accounting activity attempts to summarise and present data in a predetermined format to various levels of management at regular intervals, for the purpose of evaluating performance.

Multiple choice

Which of the following accounting concepts suggests that to find out the profitability, the expenses incurred to generate revenue are to be matched against that revenue?

  1. Accounting period concept

  2. Money measurement concept

  3. Value added concept

  4. Matching concept

  5. Legal aspect concept
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

This accounting concept suggests that to find out the profitability, the expenses incurred to generate revenue are to be matched against that revenue.

Multiple choice

Which of the following accounting concepts suggests that incomes and expenses should be recognised as and when they are earned and incurred, irrespective of whether the money is received or paid?

  1. Legal aspect concept

  2. Accrual concept

  3. Accounting period concept

  4. Money measurement concept

  5. Value added concept
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

This accounting concept suggests that incomes and expenses should be recognised as and when they are earned and incurred, irrespective of whether the money is received or paid.