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

An independent assessment of the impact of firm's activities on society is called a

  1. Financial audit

  2. Balance sheet

  3. Profit and loss account

  4. Social audit
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Social auditing is a process that enables an organisation to assess and demonstrate its social, economic, and environmental benefits and limitations. It is a way of measuring the extent to which an organisation lives up to the shared values and objectives it has committed itself to. Social auditing provides an assessment of the impact of an organisation's non-financial objectives through systematic and regular monitoring of its performance and the views of its stakeholders.

Multiple choice

Insurance unexpired account is a

  1. personal account

  2. real account

  3. nominal account

  4. none of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An unexpired insurance account represents a prepaid expense, which is an asset belonging to the entity or individual. Therefore, it is classified as a personal account under the traditional accounting classification.

Multiple choice

Goodwill account is a

  1. personal account

  2. real account

  3. nominal account

  4. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Goodwill is an intangible asset. Under the traditional classification of accounts, all assets (tangible or intangible) are classified as real accounts.

Multiple choice

Provisions for doubtful debts accounts is a

  1. personal account

  2. real account

  3. nominal account

  4. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Provisions are charges against profits to meet a future liability or loss. Since they represent a loss or expense for the period, they are classified as nominal accounts.

Multiple choice

Accounting Standards set by Accounting Standard Board of India are

  1. mandatory

  2. recommendatory

  3. mandatory and recommendatory

  4. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Accounting Standards in India are generally mandatory for companies, but some may be recommendatory for certain non-corporate entities or specific situations, making the combination the most accurate description.

Multiple choice

Balance Sheet is used to analyse

  1. Fixed Assets

  2. Current Assets

  3. Current assets and Fixed assets

  4. Overall financial position for a fixed period at a given point of time
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Right answer the Balance Sheet shows the  position of all financial aspects at a given point in time.

Multiple choice

Accounting is used in a company

  1. to record financial activity

  2. to keep creditor records only

  3. to keep debtors records only

  4. to keep cash records only

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Right answer because Accounting is used to record all financial activities and it is the basic concept of accounting. 

Multiple choice

In the accounting system, B/S is also known as

  1. Broker Stock

  2. Best System

  3. Balance Sheet

  4. Before System
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Right answer because B/S is also very famous name for Balance Sheet and it is an important part of our financial statements.