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 elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

All entries are posted from journal to _______.

  1. ledger

  2. balance sheet

  3. trial balance

  4. cash A/c
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The first step involves identifying the transactions to be recorded and preparing the source documents which are in turn recorded in the basic book of original entry called journal and are then posted to individual accounts in the principal book called ledger. 


The process of transferring journal entry to the individual accounts is called posting. 
This sequence causes the journal to be called the Book of Original Entry and the ledger account is the Principal Book of Entry.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

____________ is a process of transferring journal entry to ledger.

  1. Journalisation

  2. Ledger Posting

  3. Casting

  4. Recording
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Posting is the process of transferring the entries from the books of original entry (journal) to the ledger. In other words, posting means grouping of all the transactions in respect to a particular account at one place for meaningful  conclusion and to further the accounting process. Positing from the journal is done periodically, may be, weekly or fortnightly or monthly as per the requirements and convenience of the business. 

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Recording of a transaction in journal is called posting.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Ledger posting means making entries of the transactions in the ledger books from the journals. Posting is a process of transferring debit and credit aspects of the entries appearing in the journal and other books of original entry to the debit and credit sides of the relevant accounts in the ledger. 

Posting means transferring the entries from the Journal to the Ledger accounts. Recording of a transaction in the Journal is termed as Journalising. Thus, when entries are posted or transferred to the respective ledger accounts, this process is termed as posting.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Recording business transaction in the journal is known as posting.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Journalising is the process of recording the aspects of the transactions in journal. In other words, recording of entries in the journal is known as journalising. 

The process of journalising means the steps to be followed for ascertaining the account heads to be debited/credited for a particular transaction. There are three steps involved in the process of journalising a transaction:
Step 1: Identification of accounts or 'account heads' affected by the transaction.
Step 2: Classification of accounts or account heads.
Step 3: Application of rules for debit and credit.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Cash purchase of raw material is initially recorded in_________.

  1. purchase day book

  2. cash book

  3. directly in Purchase A/c

  4. any of the above three
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

All cash transactions are first recorded in cash book. Hence cash purchase of raw material is also to be recorded in cash book.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

A summary record of the changes in a particular asset, liability or owners equity is known as _________.

  1. Account

  2. Account current

  3. Proforma Account

  4. Ledger
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The detailed record of all the changes that have occurred in a particular asset, liability, or owner's equity during a period is known as account. It is a record or statement of financial expenditure and receipts relating to a particular period or purpose.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

The transferring of amount from the journal to the appropriate accounts in the ledger is called _________.

  1. Recording

  2. Journalising

  3. Journal entry

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

All journal entries must be transferred to a book to have the summary of each account. The book where these individual account are opened is called ledger. Process of transferring the entries from journal to ledger is called posting.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Total of Bills Payable Book is posted to the ledger ___________.

  1. on the debit side of bills payable A/c

  2. on the credit side of bills payable A/c

  3. Either (a) or (b)

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The total of “Bills Payable Book” shows the total amount of bills accepted, which is posted on the Credit side of “Bills Payable Account”. Bills Payable are liability for business. Thus, show credit balance.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

The process of transferring the debit and credit items from a journal to their respective accounts in the ledger is termed as _______________.

  1. posting

  2. purchase

  3. balancing of an account

  4. arithmetical accuracy test
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Posting is the accounting process of transferring entries from the journal to the ledger accounts. This organizes financial data by specific accounts.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

The process of transferring the transactions relating to changes in a particular item at one place in the form of an account is called _________.

  1. journalising

  2. balancing

  3. posting

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

Posting is the process of grouping all transactions related to a specific item into one place, which is known as an account in the ledger.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Posting refers to the process of transferring information from _________.

  1. journal to ledger accounts

  2. general ledger accounts to journals

  3. source documents to journals

  4. journals to source documents
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Posting is the process of transferring the entries from the book of original entry (journal) to the ledger. In other words, posting means grouping of all the transactions in respect to a particular account at one place for meaningful conclusion and for further accounting process. Posting from the journal is done periodically, may be, weekly or fortnightly or monthly as per the requirements and convenience of the business.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

The following relate to the recording process. Which of these statements is correct_________.

  1. The general ledger is a chronological record, of transactions.

  2. The general ledger is posted from transactions recorded in the general journal.

  3. The trial balance provides the primary source document for recording transactions into the general journal

  4. Transposition is the transfer of information from the general journal to the general ledger.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

After the transactions are recorded in these journals, a summary of all the transactions is posted in each journal to the general ledger, which contains all of a company's accounts. An account is a separate, detailed record associated with a specific asset, liability, equity, revenue, or expense item.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

The process of transferring the transactions relating to changes in a particular item at one place in the form of an account is called _________.

  1. Journalising

  2. Balancing

  3. Posting

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

Posting is the accounting process of transferring transactions to their specific accounts in the ledger to maintain a record of changes for each item.

Multiple choice elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

Trading and Profit and Loss Account cannot be prepared from books maintained on single entry basis because :

  1. Nominal accounts are not maintained in the ledger.

  2. Real accounts are not maintained in the ledger.

  3. Personal accounts are not maintained in the ledger.

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

In a single entry system, only personal accounts and cash books are typically maintained. Nominal accounts (expenses, incomes) are not recorded, making it impossible to calculate profit or loss through a traditional Trading and Profit and Loss account.

Multiple choice elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

Profit, under Single Entry System is ascertained ____________ .

  1. by preparing Profit and Loss Account.

  2. by preparing Statement of Affairs

  3. by preparing Cash Account

  4. all of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Since a full set of accounts is not maintained in a single entry system, profit is typically ascertained by comparing the capital at the beginning and end of the period, often using a Statement of Affairs.