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

Which of the following correctly explains about adjunct account?

  1. It increases book value of liability account.

  2. It increases book value of asset account.

  3. It increases book value of expense account.

  4. It increases book value of income account.

  5. It decreases book value of liability account.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An account in financial reporting that increases the book value of a liability account. An adjunct account is a valuation account from which credit balances are added to another account. For example, if a company issues bonds, the unamortized premium on bonds payable account (sometimes called bond premium) is an adjunct account because its credit balance is added to the bonds payable account.

Multiple choice

Which of the following is/are the advantage(s) of Accounting Standards?

  1. To eliminate or reduce variation in accounting treatments

  2. To facilitate comparison of financial statements of different companies

  3. To make financial statements more informative

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Correct Answer: To eliminate or reduce variation in accounting treatments

Multiple choice

Which of the following is a liability of a firm?

  1. Debit balance of analytical Petty Cash Book

  2. Credit balance of Bank Pass book

  3. Debit balance of Bank column of Cash Book

  4. Credit balance of Bank column of Cash Book
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Correct Answer: Credit balance of Bank column of Cash Book means overdraft and thus, a liability.

Multiple choice

Personal accounts can take the form of

  1. natural person accounts like proprietor’s account, suppliers account, receivers account (like Mohan’s a/c, Shashi’s A/c, Naresh’s a/c), etc.

  2. artificial persons’ and body of persons’ accounts like limited company’s account, bank account, insurance company’s account any governments account, etc.

  3. representative personal accounts like salaries outstanding accounts, unexpired insurance account, interest received in advance account, etc.

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Correct Answer: All of the above