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 elements of accounts dual effect of transactions and types of accounts meaning and classification of business transactions develop the understanding of recording of transactions in journal illustrations on journal entries

Accounting measures the business transactions in terms of ________units.

  1. Non-monetary

  2. Monetary

  3. Personal

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

Accounting records financial transactions in terms of a common unit of measure to ensure consistency and comparability. This unit is the monetary unit of the country where the business operates.

Multiple choice elements of accounts dual effect of transactions and types of accounts meaning and classification of business transactions develop the understanding of recording of transactions in journal illustrations on journal entries

During the life-time of an entity, accountants prepare financial statements at a point of time in accordance with which basic accounting principles?

  1. Cost-benefit

  2. Periodicity

  3. Conservatism

  4. Matching

  5. All of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The correct answer is periodicity. Periodicity means that accountants will assume that a company's ongoing activities can be presented(or reported)annually, monthly or quarterly.  

Multiple choice maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

In which of the following does the time period is fixed at the time of opening the account?

  1. Savings account

  2. Current account

  3. Fixed deposit account

  4. Recurring deposit account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In a Fixed deposit account, the time period is fixed at the time of opening the account. 

A fixed deposit account is an investment account and a type of savings account in which money is deposited for a stated period of time and a fixed interest rate is paid at the end of that period.

Multiple choice maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

The profit on interest charged on the hire purchase should appear in the profit and loss account in what manner?

  1. The total interest levied should be divided equally over the total period the for purchase agreement

  2. The interest charged in that period only should be included

  3. Final instalment is paid

  4. Interest should be apportioned in proportion to the repayment totals
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The profit on interest charged on the hire purchase should appear in the profit and loss account. when the interest charged in that period only should be included.

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

To delete a voucher or to delete a master, which of the following shortcut key one will use in Tally ?

  1. ALT+A

  2. ALT+D

  3. ALT+O

  4. ALT+W
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Tally Accounting is a software used for accounting purposes. It is provided by Tally Solutions and is a standard business accounting software. Tally ERP is a very robust ERP product and is a complete business management solution. Tally is defined as record, count or a record of debit and credit or an account.

ALT+D is the shortcut key used in Tally to delete a voucher or yo delete a master.

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.