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

Match of the following with reference to shortcut keys used in Tally:
P. To remove  in a line                 1. CTRL + ALT+ I
Q. To Abandom the form              2.  ALT + R
R. To import statutory master       3. ALT + I
S. Rewrite data for a company     4. ALT+I
                                                    5. ALT+Q
                                                    6. Delete
Select the correct answer from the option given below

  1. P Q R S

    3 6 4 2

  2. 3 5 1 2

  3. 2 5 4 3

  4. 6 3 2 1
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The matching of shortcut keys in Tally is as follows: P (To remove a line) matches 3 (ALT + I), Q (To abandon the form) matches 5 (ALT + Q), R (To import statutory master) matches 1 (CTRL + ALT + I), and S (Rewrite data) matches 2 (ALT + R).

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

According to the double entry system of accounting, an account that obtains benefit is __________.

  1. Credit

  2. Debit

  3. Income

  4. Need not to show in accounting records
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

According to the golden rules of accounting, the receiver of a benefit is debited, and the giver is credited. Therefore, an account that obtains a benefit is debited under the double entry system.

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.

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

Which of the following is/are merit of double entry system?

  1. It keeps a complete record of business transactions.

  2. It provides a check on the arithmetical accuracy of accounts.

  3. The detailed profit and loss account can be prepared to show profit earned or loss suffered during any given period.

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

The double entry system is comprehensive; it ensures complete records, allows for arithmetical accuracy checks via a trial balance, and facilitates the preparation of detailed financial statements.

Multiple choice commercial applications 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 introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

In Double Entry System, if one account is debited the other account must be credited with equal amount.

  1. True

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

The fundamental principle of the double entry system is that every transaction has a dual effect, meaning for every debit, there must be an equal and corresponding credit.

Multiple choice commercial applications 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 introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

The job of recording transaction has been called as "Book-keeping"

  1. True

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

Book-keeping is defined as the process of recording, classifying, and summarizing financial transactions in a systematic manner.

Multiple choice commercial applications 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 introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

The credit of evolving the present Double Entry Book-Keping System goes to a philosopher turned mathematician, Italian merchant ''Luca D Bargo Pacioli'' in 1494.

  1. True

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

Luca Pacioli, an Italian mathematician and monk, is credited with documenting the double entry book-keeping system in 1494 in his work 'Summa de Arithmetica'. The statement correctly attributes this historical fact, despite minor spelling variations.

Multiple choice commercial applications 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 introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

Filing is an important aspect of ____________.

  1. record keeping

  2. book keeping

  3. house-keeping

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

Filing involves the systematic storage, classification, and retrieval of documents, which is a fundamental component of record keeping in an office or organization.

Multiple choice commercial applications 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 introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

Double entry system of book-keeping refers to a system where, _____________________.

  1. the number of accounts with a debit balance must agree with the number of accounts with the credit balance

  2. each transaction is recorded twice, once in journal and then in ledger

  3. equal debit and credit entries are made for each transaction

  4. each transaction is recorded in two set of account book
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Double Entry System of accounting is based on the dual aspect of accounting. It says that every transaction will have two effects in books of account.

For every debit , there will a credit of similar amount and vice versa. 

For example, Goods worth Rs. 1000 purchased for cash. There are 02 accounts which are affecting here i.e. cash is going out of Rs.1000 and Goods are coming for Rs.1000.

Hence, it is true that equal debit and credit entries are made for each transaction. 

Multiple choice commercial applications 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 introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

Double entry book keeping system is most scientific system of recording business transactions.

  1. True

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

"The specific technique which reflects the concept of duality is known as double entry book-keeping."-Lewis and Gillespie.

It is the most common system of bookkeeping whereby the two aspects of every transaction i.e., the receiving aspect (debit) and the giving aspect (credit) are recorded in the books of accounts. It is based on the 'dual aspect concept'.
This method of writing every transaction in two different accounts on opposite sides for equal value is known as the double entry system of book keeping. This is the most accurate, complete and scientific system of accounting. 

Multiple choice commercial applications 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 introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

The Double Entry System of accounting originated in _________.

  1. America

  2. Russia

  3. Italy

  4. England
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
Double entry accounting system first invented in Italy by a church father who's named Luca Bartolomes Pacioli. He was the mathematician and contemporary of Leonardo Da Vinci.