Tag: commercial applications

Quizzes (170) Questions (1551)

Questions Related to commercial applications

Multiple choice commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

The correct sequence of following will be :
1. Policies           2. Objective
3. Programmes   4. Procedures.

  1. 1, 2, 3, 4

  2. 1, 2, 4, 3

  3. 2, 1, 4, 3

  4. 2, 1, 3, 4
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The logical management sequence starts with defining the Objective (2), followed by setting Policies (1) to achieve them, then creating Programmes (3) to implement those policies, and finally establishing Procedures (4) for execution.

Multiple choice commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

In the comparative financial statement, comparison of financial data is done in the form of ___________ .

  1. Absolute data of each year in terms of Rupees of the same firm

  2. Increase or decrease in data over the years of the same firm

  3. Increase or decrease in data of different firms

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

Comparative financial statements analyze changes in financial data over time for the same firm or between different firms, allowing for both absolute and percentage comparisons.

Multiple choice commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

Which of the following statements is 'True'?

  1. Building Account is a nominal account

  2. Outstanding rent account is a non-personal account

  3. Every debit has a corresponding credit

  4. Income is debited
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The fundamental principle of double-entry bookkeeping is that every debit must have a corresponding credit, ensuring the accounting equation remains balanced.

Multiple choice commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

Cash discount terms offered by trade creditors should never be accepted because __________________.

  1. Benefit is very small

  2. Cost is very high

  3. No sense to pay earlier

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

Cash discount is allowed by the firms to speed up the cash collections. 


If cash discount is allowed by the creditors, business have to make a trade off between the earning from cash discount verses the cost of repaying the amount. 

Multiple choice commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

Interest on performing assets should be recognized on ___________ basis.

  1. actually received

  2. standard

  3. accrual

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

Banks are to recognize their income on accrual basis in respect of income on performing assets and on cash basis in respect of income on non-performing assets (NPA). Any interest accrued and credited to income account must be cancelled by a reverse entry once the credit facility comes under the category of NPAs.

Multiple choice commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

Which of the following is not followed in capital budgeting?

  1. Cash flows Principle

  2. Interest Exclusion Principle

  3. Accrual Principle

  4. Post-tax Principle
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Capital budgeting has five principles that plays a crucial role in the allocation of money and the process of capital budgeting.

The five principles are:-

(1) Decision are based on cash flows, not accounting income,

(2) Cash flow are based on opportunity cost,
(3) The timing of cash flows are important,
(4) Cash flows are analysed on an after tax basis
(5) Financing costs are reflected on projects required rate of return.
 
Accrual principle is not followed in capital budgeting.