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

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You can create ___________ to reverse accruals, estimates, temporary adjustments and reclassifications, or correct errors.

  1. A. Manual Journal Entries

  2. B. Reversing Journal Entries

  3. C. Recurring journal entries

  4. D. Mass allocation journal entries
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Reversing journal entries are specifically designed to reverse previous accruals, estimates, temporary adjustments, reclassifications, or error corrections. They create offsetting entries that undo the effects of the original entries, typically in the next accounting period.

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___________ are used for transactions that repeat for every accounting period, such as accruals, depreciation charges, and allocations

  1. A. Mass Allocations

  2. B. Reversing Journal Entries

  3. C. Manual Journal

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

Recurring journal entries automate repetitive transactions that occur every accounting period - depreciation, allocations, accruals, and other regular adjustments. Rather than manually recreating the same entry each period, the system generates it automatically based on predefined rules.

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__________are journal entries that utilize a single journal entry formula to allocate balances across a group of cost centers, departments, divisions or other segments.

  1. A. Mass Allocations

  2. B. Manual Entry

  3. C. Reversing Journal Entry

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

Mass allocation journal entries use a single formula to distribute balances across multiple cost centers, departments, divisions, or segments. This is efficient for allocating overhead, shared expenses, or other amounts that need systematic distribution across multiple entities.

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__________ is an account whose balance is the sum of balances from multiple detail accounts

  1. A. T Account

  2. B. Detail Account

  3. C. Summary Account

  4. D. Accrual Account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A summary account is defined precisely by its function: it aggregates or sums the balances from multiple related detail accounts. This hierarchical structure allows roll-up reporting and analysis - you can view individual detail accounts or their combined summary total.

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_____________report reconcile the general ledger cash account to the bank statement balance

  1. A. AP Reconciliation

  2. B. AR Reconciliation

  3. C. GL Reconciliation

  4. D. Assets Reconciliation
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

GL (General Ledger) reconciliation is the process that verifies the general ledger's cash account balance matches the actual bank statement balance. This critical control detects discrepancies between recorded transactions and bank activity, ensuring accurate cash position reporting.

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When you enter a journal, the journals in that batch should

  1. A. Share the same currency

  2. B. Share the same period

  3. C. Share the same accounting date

  4. D. have different currency, accounting rate, period
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

All journals within a single journal batch in Oracle General Ledger must share the same accounting period. They do not have to share the same currency, accounting date, or exchange rate.

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Automatic Intercompany Eliminations Program eliminates _____________

  1. A. Intercompany balance

  2. B. Average daily balance

  3. C. Formula based balance

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

Intercompany balance is the correct answer because the Automatic Intercompany Eliminations Program specifically eliminates transactions and balances between related entities within a corporate group to avoid double-counting. Average daily balance is a banking concept. Formula-based balance is not related to intercompany eliminations.

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Which report would be appropriate as part of financial month end close?

  1. A. Trial Balance Detail

  2. B. Other Calendar Validation Report

  3. C. Currency - Daily conversion rates listing

  4. D. Chart of accounts - Segment listing
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Trial Balance Detail is correct because it's a standard report generated during month-end close to verify that debits equal credits and all accounts are properly balanced. Calendar validation is for setup, conversion rates listing is for FX management, and segment listing is for chart of accounts maintenance - not close activities.

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__________is the central repository of accounting information

  1. A. Accounts Payables

  2. B. Accounts Receivables

  3. C. General Ledger

  4. D. Oracle Treasury
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

General Ledger is correct because it serves as the central repository where all accounting transactions from subledgers (AP, AR, Inventory, etc.) are ultimately recorded and stored. AP and AR are subledgers that feed into GL. Oracle Treasury manages cash and investments, not general accounting.

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________is used to define an accounting year

  1. A. Currency

  2. B. Calendar

  3. C. Chart of accounts

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

Calendar is correct because in Oracle General Ledger and most accounting systems, the calendar defines fiscal periods, accounting year start/end dates, and adjustment periods. Currency is for monetary units. Chart of accounts identifies accounts, not time periods.

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__________provides a list of accounting flexfields you create to identify general ledger accounts

  1. A. Currency

  2. B. Calendar

  3. C. Chart of accounts

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

Chart of accounts is correct because it defines the structure (flexfields) used to identify and categorize general ledger accounts. Currency defines monetary units. Calendar defines time periods. The chart of accounts is the account coding structure itself.

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___________process reviews the foreign currency balance, reconverts the functional currency using the revaluation rate, creates a journal entry to adjust the functional balance to the reconverted amount

  1. A. Consolidation

  2. B. Revaluation

  3. C. Translation

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

Revaluation is correct because it specifically reviews foreign currency balances, reconverts them using period-end rates, and creates journal entries to adjust the functional currency balances. Translation converts entire financial statements to another currency for consolidation. Consolidation combines financial statements.