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 sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Which of the following is/are the subsidiary books ? 

  1. Purchases Book

  2. Sales Book

  3. Bills Receivable Book

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

Purchases Book, Sales Book, and Bills Receivable Book are all standard subsidiary books used to record specific types of credit transactions.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Sales is ________________.

  1. Real Accounts

  2. Personal Accounts

  3. Nominal Accounts

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

Sales represent the revenue generated by a business from selling goods or services. In accounting, all revenue and expense accounts are classified as nominal accounts.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Sub-divided journal on the basis of nature of transactions like sales, purchases, small cash expenses, etc. are called subsidiary books.

  1. True

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

Special Journals (also known as subsidiary journals) are chronological records of frequently occurring transactions such as sales, purchases and cash receipts/payments.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Subsidiary book in which return of goods sold on credit is recorded ____________.

  1. Sales return book

  2. Purchase return book

  3. Sales book

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

Goods sold on credit when returned by the customer is recorded in returned inward book or sales return book. Sales return book shows a debit balance as it is reverse to the sales, which has credit balance. When the goods are returned by the customer one note is prepared which is called as "Credit note". A duplicate copy of credit note is used to record the transaction in the sales return book and the original copy is sent to the original party who returned the goods i.e. customer.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Which of the following is/are the subsidiary books?

  1. Purchases Returns Book

  2. Sales Returns Book

  3. Cash Book

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
We can divide the subsidiary books into the following types:
  • Cash book.
  • Purchases book.
  • Sales book.
  • Purchases return or return outwards book.
  • Sales return or return inwards book.
  • Bills receivable book.
  • Bills payable book.
  • Journal proper.
Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Which of the following is/are subsidiary books?

  1. Purchases Returns Book

  2. Cash Book

  3. Journal proper

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Different Types of Subsidiary Books
  • Cash book.
  • Purchases book.
  • Sales book.
  • Purchases return or return outwards book.
  • Sales return or return inwards book.
  • Bills receivable book.
  • Bills payable book.
  • Journal proper.
Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

The sub-division of journal into various subsidiary journals in which transactions of similar nature are recorded are called ______________.

  1. Subsidiary books

  2. Ledger

  3. Journal

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

The journal is sub-divided into different journals known as the subsidiary books or books of prime entry or books of original entry.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Which of the following is/are the subsidiary books?

  1. Primary Book

  2. Bills Payable Book

  3. Purchases Book

  4. (B) & (C)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
We can divide the subsidiary books into the following types:
  • Cash book.
  • Purchases book.
  • Sales book.
  • Purchases return or return outwards book.
  • Sales return or return inwards book.
  • Bills receivable book.
  • Bills payable book.
  • Journal proper.
Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Which of the following is/are the subsidiary books?

  1. Purchases Book

  2. Sales Book

  3. Bills Receivable Book

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
We can divide the subsidiary books into the following types:
  • Cash book.
  • Purchases book.
  • Sales book.
  • Purchases return or return outwards book.
  • Sales return or return inwards book.
  • Bills receivable book.
  • Bills payable book.
  • Journal proper.
Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Which is NOT a subsidiary book?

  1. Sales book

  2. Salary book

  3. Purchase book

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

Sales book, Purchase book, and Cash book are standard subsidiary books. A 'Salary book' is not a standard subsidiary book used for recording primary transactions in the same way.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Which of the following statements is/ are true?
    (i)  An error in casting the subsidiary books is an error of commission.
    (ii) An error in wrong casting of the sales day book will not affect the personal                    accounts of debtors.
     (iii) Mistake in transferring the balance of an accounts of debtors.
     (iv) The mistake of treating a liability as an income or vice versa will not affect the             agreement of a trial balance.

  1. Only (i) above

  2. Only (ii) above

  3. Both (i) & (ii) above

  4. (i), (ii) and (iv) above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

All statements (i), (ii), and (iv) are correct. (i) is commission, (ii) is correct as casting error affects the total but not individual debtor accounts, and (iv) is correct as it doesn't affect the trial balance totals.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Under Sales or Return or approval basis when the transactions are moderate and the seller sends the goods on approval or return basis, the accounting treatment will be ________________.

  1. No Journal Entry

  2. Entry in Sales or Return Journal

  3. Entry in Sales or Return Day Book

  4. Sundry Debtors A/c Dr

    To Sales A/c
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When transactions are moderate, businesses use a specific 'Sales or Return Journal' to track goods sent on approval until they are formally accepted or returned.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

If two or more transactions of same nature are journalized together it is known as ________________.

  1. Compound journal entry

  2. Separate journal entry

  3. Posting

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

If two or more transactions of the same nature occur on the same day and either debit account and/or credit account are common in them, then instead of passing a separate entry for each such transaction, one combined entry may be passed. Such type of entry is known as compound journal entry.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

In the Sale or Return Ledger _______________________.

  1. All the customers are individually debited and the sale or return account is credited with the periodical total of the Sale or Return Day Book.

  2. all the customers are debited in total and the sale or return account is credited with the periodical total of the Sale or Return Day Book.

  3. all the customers are individually debited and the sale or return account is credited with the individual total of the Sale or Return Day Book.

  4. None of these.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In terms of goods sent numerously, goods returned by the customer within the specified time limit are first recorded in the Sale or Return Day Book. After this, the customer’s accounts are individually credited in the Sale or Return Ledger while the Sale or Return A/c is debited with the total of the Sale or Return Day Book.


Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Proprietor's account is ___ account.

  1. Real

  2. Nominal

  3. Personal

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The proprietor represents a person or a group of persons (the owner). In accounting, accounts related to persons are classified as personal accounts.