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

In lease system, interest is calculated on _________________.

  1. Cash down payment

  2. Cash price outstanding

  3. Hire purchase price

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

If the rate of interest is not given (the cash price and amount of each instalment being given), interest will be calculated on the basis that the interest for each year will be in the ratio of amounts outstanding.

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

Which one of the following is not an accounting convention?

  1. Consistency

  2. Full disclosure

  3. Materiality

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

Accounting conventions are common practices that guide the preparation of financial statements. Consistency, full disclosure, and materiality are standard widely accepted accounting conventions, whereas secrecy is not a recognized convention and contradicts transparency.

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

Double entry system is used in which type of accounting ___________.

  1. Cost

  2. Financial

  3. Management

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

Financial accounting is based on dual concept. On the basis of dual concept, all business transactions are recorded in the books of accounts. This signifies that, every business transaction will affect two accounts while making an accounting entry. Its basically a double entry system of accounting. For every debit, there will be a credit and vice versa.

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

The accrual cost is the basis for ____________.

  1. Management system of accounting

  2. Mercantile system of accounting

  3. Internal system of accounting

  4. External system of accounting
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Accrual Accounting is the base of present accounting. It is also known as the mercantile system of accounting, wherein the transactions are recognised, as and when, they take place. 

Under this method, the revenue is recorded when it is earned, and the expenses are reported when they are incurred.

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

The system of recording transaction based on dual aspect concept is called ________________.

  1. Double account system

  2. Double entry system

  3. Single entry system

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

Dual aspect accounting is a concept which assumes that every business transaction will give two effects, i.e. debit and credit. For every debit there will be a credit, and vice versa. Double entry system of accounting is commonly used by all the organizations. Small concerns who are not well versed with double entry system are following the single entry system, in which they maintained only account of debtors and creditors and bank account. 

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

The basis for the accounting equation is the principle of _________.

  1. Rights

  2. Rules

  3. Procedures

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

Accounting equation is the foundation of double entry system of book-keeping. It displays that all the assets are either financed by borrowing money or paying from the shareholder's equity. The balance sheet being the complex version shows explain the equation very clearly and it shows that total assets is equal to total liability plus shareholder's equity. The basis for this equation is the principle of rights.

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

Mercantile system is followed by __________.

  1. Merchants, trade and industry

  2. Doctors, lawyers, brokers etc.

  3. Industry, trade and agriculturist

  4. Multi-national firms
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Mercantile system is the system which states that revenue and expenditure must be recorded at the time they are recognized or incurred. Mercantile is followed by Merchants, trade and industry as they get arithmetic accurate financial statements and it helps them to take important decisions.

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

Match the following:

1. Artificial persons accounts a) Firms account, educational institution's accounts, bank account etc.
2. Representative personal accounts b) Prepaid insurance, outstanding wages etc.,
3. Tangible real accounts c) Building, furniture, cash and machinery etc.
4. Intangible real accounts d) trademark, goodwill, patents, etc.

  1. a, b, c, d

  2. b, a, d, c

  3. a, c, d, b

  4. d, b, c, a
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

An artificial person consists of any institution, which can be bank, educational institute or a firm.
Representative personal account means, an account which represents a person which can be prepaid insurance, outstanding wages.etc.
Tangible real account is an account, which is related to the assets that can be felt and seen by eyes.
Intangible real account is an account, which cannot be seen and felt.

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

The system of recording based on dual aspect concept is called _______.

  1. Double account system

  2. Double entry system

  3. Single entry system

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

Dual aspect is the foundation or basic principle of accounting. It provides the very basis for recording business transactions into the book of accounts. This concept states that every transaction has a dual or two-fold effect and should therefore be recorded at two places. In other words, at least two accounts will be involved in recording a transaction.

The double-entry system also requires that for all transactions, the amounts entered as debits must be equal to the amounts entered as credits.

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

The governing principle of double entry system is that _________.

  1. for every debit there is an equal and corresponding credit

  2. debit the given credit the receiver

  3. debit what goes out credit what comes in

  4. debit profits and gains credit expenses and losses
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Dual aspect is the foundation or basic principle of accounting. It provides the very basis for recording business transactions into the book of accounts. 

This concept states that every transaction has a dual or two-fold effect and should therefore be recorded at two places. In other words, at least two accounts will be involved in recording a transaction.

The double-entry system also requires that for all transactions, the amounts entered as debits must be equal to the amounts entered as credits.