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

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.

Multiple choice

Directions: Choose the correct option for the given question:

When completion stage of contract is less than 1/4, the total expenditure on the contract is transferred to ______ account.

  1. finished goods

  2. work-in-progress

  3. expenditure

  4. contract

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

When a contract is in its very early stages (less than 1/4 complete), the accumulated costs are carried forward in the work-in-progress account until the contract reaches a stage where profit can be recognized.

Multiple choice

Directions: Choose the correct option for the given question:

______ account does not record the balance of Stores Ledger Control Account.

  1. Profit and loss

  2. Costing profit and loss

  3. Income and expenditure

  4. All of the above

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

The Stores Ledger Control Account tracks inventory values. The Profit and Loss account is a financial statement account and does not record the balance of the stores ledger directly.

Multiple choice

Directions: Choose the correct option for the given question.

Depreciation is the diminution in the value of a fixed asset mainly due to ______ and lapse of time.

  1. obsolescence

  2. change in fashion

  3. use

  4. all of the above

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

Depreciation is the systematic allocation of the cost of a fixed asset over its useful life. The primary causes include physical wear and tear from use, as well as the passage of time.