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

Where does the rectifying entry need to be passed in a nominal account, when the error is detected after the preparation of final account?

  1. Profit and loss account

  2. Profit and loss adjustment account

  3. Profit and loss appropriation account

  4. Respective nominal account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When any nominal account is affected because of any error, it will affect the profilt, so after prepration of profit and loss account,  we can adjust the profit,  with the profit and loss adjustment account.

Multiple choice

Directions: Choose the correct option for the given question.

Under ______ method of accounting of by-products, the sale value of by-product is credited to profit and loss account.

  1. sales value

  2. other income

  3. market value

  4. cost price

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

When the sale value of a by-product is treated as other income, it is credited directly to the profit and loss account rather than being used to reduce the cost of the main product.

Multiple choice

Directions: Choose the correct option for the given question:

The balance of ______ represents the total balance of stock of each item of material.

  1. stock ledger

  2. stock ledger control account

  3. stock register

  4. stock ledger adjustment

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

The stock ledger control account is a summary account in the general ledger that represents the total value of all individual stock items recorded in the subsidiary stock ledger.

Multiple choice

Directions: Choose the correct option for the given question:

At the end of any period, the total balance of ______ should be equal to the balance in the work-in-progress ledger control.

  1. works account

  2. jobs account

  3. process account

  4. all of these

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

In job costing, the work-in-progress (WIP) control account summarizes the costs of all individual jobs currently in progress. Therefore, the sum of the balances of individual job accounts must equal the balance in the WIP control account.

Multiple choice

Directions: Choose the correct option for the given question:

______ is prepared to make the cost ledger self balancing.

  1. General ledger

  2. Special ledger

  3. Special journal

  4. General ledger adjustment

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

The General Ledger Adjustment account is used in non-integral accounting systems to make the cost ledger self-balancing by acting as a contra-account for all transactions involving the financial ledger.

Multiple choice

Directions: Choose the correct option for the given question:

______ in cost ledger represents personal accounts in financial books.

  1. General ledger

  2. Main ledger

  3. Master ledger

  4. Special ledger

  5. General ledger adjustment account
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

In a non-integral cost accounting system, the General Ledger Adjustment account represents all personal and real accounts that are maintained in the financial books but not in the cost ledger.

Multiple choice

Directions: Choose the correct option for the given question:

The closing balance of cost of sales account is transferred to

  1. profit and loss account

  2. costing profit and loss account

  3. cost of sales account

  4. general ledger account

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

In cost accounting, the Costing Profit and Loss account is used to determine the profit or loss from operations. The balance from the cost of sales account is transferred here to calculate the final costing profit.