Tag: modern approach of rules of accounts

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Questions Related to modern approach of rules of accounts

Multiple choice commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

M/s Ram & Sons Ltd's Account is ________________.

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

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

M/s Ram & Sons Ltd is a business entity created by law, making it an artificial person. Therefore, it is classified as an artificial personal account.

Multiple choice commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

Ram's Capital Account is _______________.

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

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

A capital account represents the owner's equity in the business. Since it represents the person (Ram) in the books, it is a representative personal account.

Multiple choice commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

Advance Salary to Shyam Account is _______________.

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

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

Advance Salary to Shyam is an asset account that represents a future claim on an individual. It is a representative personal account because it represents the salary paid to Shyam in advance.

Multiple choice commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

Interest receivable from Mohan, a Borrower Account is ______________.

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

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

Interest receivable is an asset representing money owed by a person. It is a representative personal account because it stands for the interest due from Mohan.

Multiple choice commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

Salary Payable to Shyam Account is _____________.

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

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

Salary Payable is a liability account representing an amount owed to an employee. It is a representative personal account as it represents the liability towards Shyam.

Multiple choice commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

Interest received in advance from Mohan, a borrower Account is ________________.

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

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

Interest received in advance is a liability representing an obligation to provide a service or refund. It is a representative personal account representing the borrower's claim.

Multiple choice commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

Ram's Drawings Account is _________________.

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

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

Drawings account is a representative personal account. A representative personal account represents a person/persons. Some examples of representative personal account are capital, outstanding wages, prepaid salaries.

Multiple choice commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

Purposes of an accounting system includes all of the following except _____________.

  1. interpret and record the effect of business transactions

  2. classify the effects of transactions to facilitate the preparation of reports

  3. summarize and communicate information to decision makers

  4. deciding the line of business for an entity
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Accounting systems are designed to record, classify, and summarize financial data to assist in decision-making. Deciding the line of business is a strategic management function, not a function of the accounting system itself.