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 accounts selection of an accounting software package erp practical application of accounting software accounting information system

Ready-to-use accounting software is suited to organisations running small/conventional business where the frequency or volume of accounting transaction is ________. 

  1. very average

  2. very high

  3. very low

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

Ready-to-use accounting software is suited to organisations running small/conventional business where the frequency or volume of accounting transactions is very low. This is because the cost of installation is generally low and number of users is limited.

Multiple choice elements of accounts selection of an accounting software package erp practical application of accounting software accounting information system

Accounting package is classified in to __________________.

  1. Ready-to-use; Customised; Tailored

  2. Recording; Storing of accounting data; Tailored

  3. Ready-to-use; Customised; Recording

  4. Customised; Tailored; Storing of accounting data;
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The accounting packages are classified into the following categories:
1. Ready-to-use
2. Customised
3. Tailored
Each of these categories offers distinctive features.

Multiple choice commercial studies selection of an accounting software package erp practical application of accounting software accounting information system

Some accounting software is user friendly requiring a _____ training to the users.

  1. simple

  2. specialised

  3. average

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

Some accounting software is user friendly requiring a simple training to the users. Some other complex software packages linked to other information systems requiring intensive training on a continuous basis.

Multiple choice commercial studies selection of an accounting software package erp practical application of accounting software accounting information system

Following factors are usually taken in considerations before sourcing accounting software:
1. Flexibility; Cost of Installation and Maintenance; Size of Organisation
2. Ease of Adoption and Training needs; Utilities/MIS reports; Expected Level of Secrecy (Software and Data)
3. Exporting/Importing Data Facility; Vendors Reputation and Capability
4. Recording; Customisation; Ready-to-use; Tailored

  1. 1, 2, 3

  2. 2, 3, 4

  3. 1, 3, 4

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

Flexibility, Cost of Installation and Maintenance; Size of Organisation; Ease of Adoption and Training needs; Utilities/MIS Reports; Expected level of Secrecy (Software and Data); Exporting/Importing Data Facility; Vendors Reputation and Capability are the factors usually taken in consideration before sourcing accounting software.

Multiple choice commercial studies selection of an accounting software package erp practical application of accounting software accounting information system

Which one of the following is not an accounting software?

  1. Tally

  2. Miracle

  3. Profit

  4. SPSS
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
  • Tally is one of the best business accounting software for accounting, inventory, payroll. 
  • Miracle is general purpose accounting software with features as par current industry standards. Main strength of Miracle is easy to use, scalability and flexibility. Miracle is available in different variants like Premium Copy, Standard Copy, Super Account Copy, Account Copy & Billing Copy.
  • SPSS (Statistical Package for the Social Sciences), also known as IBM SPSS Statistics, is a software package used for the analysis of statistical data. Although the name of SPSS reflects its original use in the field of social sciences, its use has since expanded into other data markets.
  • Profit is not an Accounting software.It is a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
Multiple choice commercial studies selection of an accounting software package erp practical application of accounting software accounting information system

An important consideration before sourcing an accounting software is flexibility.

This Statement is true for which of the following factor taken in considerations before sourcing an accounting software.

  1. Flexibility

  2. Ease of adaption and training needs

  3. Size of organisation

  4. Expected level of secrecy
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An important consideration before sourcing an accounting software is flexibility, viz. data entry and the availability and design of various reports expected from it. Flexibility is one of the factor which is taken into consideration before sourcing an accounting software.

Multiple choice commercial studies selection of an accounting software package erp practical application of accounting software accounting information system

Ready-to-use accounting software is suited to organisations running _______ business where the frequency or volume of accounting transactions is very low.

  1. small

  2. large

  3. medium

  4. both a and b
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Ready-to-use accounting software is designed for small businesses with low transaction volumes and standard accounting requirements, as it is cost-effective and simple to deploy.

Multiple choice commercial studies selection of an accounting software package erp practical application of accounting software accounting information system

GAAP tells the ________.

  1. accounting policies

  2. accounting procedures

  3. accounting statements

  4. both a and b
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

GAAP (Generally Accepted Accounting Principles) provides the framework for both accounting policies and the specific procedures used to record and report financial information.

Multiple choice book keeping and accountancy meaning and fundamentals of double entry book-keeping double entry system meaning, definition, and advantages of double entry book-keeping meaning, definition, need, objectives and limitations of double entry system

Various departments of government will be able to find out the taxes due from various sources with the help of books of accounts.

  1. True

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

The above statement is true.

Government can access books of accounts of business from various source of the to find out the taxes due.

Multiple choice book keeping and accountancy meaning and fundamentals of double entry book-keeping double entry system meaning, definition, and advantages of double entry book-keeping meaning, definition, need, objectives and limitations of double entry system

Book-keeping does not help the owners to find out profit, losses, assets and liabilities.

  1. True

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

Book-keeping is the systematic recording of financial transactions, which is the foundational step for preparing financial statements that reveal profits, losses, assets, and liabilities.

Multiple choice book keeping and accountancy meaning and fundamentals of double entry book-keeping double entry system meaning, definition, and advantages of double entry book-keeping meaning, definition, need, objectives and limitations of double entry system

For which of the following adjustments would a reversing entry facilitate book-keeping procedures?

  1. Adjustment for depreciation expense

  2. Adjustment to allocate prepaid insurance to the current period

  3. Adjustment made as a result of inventory of supplies

  4. Adjustment for drawings in goods
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Reversing entries are typically used for accruals and prepayments that were adjusted at the end of the period. Allocating prepaid insurance to the current period is a classic example of an adjustment that benefits from a reversing entry at the start of the next period.

Multiple choice book keeping and accountancy meaning and fundamentals of double entry book-keeping double entry system meaning, definition, and advantages of double entry book-keeping meaning, definition, need, objectives and limitations of double entry system

There are ______ systems of keeping records.

  1. Single Entry System & Double Accounts System

  2. Single Account System & Double Accounts System

  3. Single Entry System & Double Entry System

  4. Single Entry System & Duplicate Accounts System
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The two primary systems for maintaining financial records are the Single Entry System and the Double Entry System.