Tag: generally accepted accounting principles (gaap)

Questions Related to generally accepted accounting principles (gaap)

Identified and measured economic events should be recorded in _________order.

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. Chronological order

  2. Valuation  order

  3. Relevance order

  4. All of the above

Show answer
Correct Option: A
Explanation:

This is very much clear from the definition of accounting that all business transactions must be recorded in books of account in the chronological order. 


As and when an economic event is identified and measured, it has to be recorded in the books. 

So, if a sales is effected on 29th March, it has to be recorded on the same day and if purchase is effected on 31st March, it has to be recorded on 31st March itself.

Which is the last step of accounting as a process of information ? 

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. Recording of data in the books of accounts.

  2. Preparation of summaries in the form of financial statements.

  3. Communication of information.

  4. Analysis and interpretation of information.

Show answer
Correct Option: C
Explanation:

It is very clear from the definition of accounting that accounting is not only concerned with recording, classifying and summarizing the transactions but it also plays an important role in providing appropriate information to the business for decision making. Communicating the information to all the stakeholders is a last step of accounting.

Accounting is BEST described as________.

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. The use of financial data

  2. The collection of financial data

  3. The collection and use of financial data only

  4. The collection and use of financial and non-financial data

Show answer
Correct Option: D

Financial recovery of a loss making company is known as _____________.

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. Turn around

  2. Privatization

  3. Liberalization

  4. None of the above

Show answer
Correct Option: A

Employees adopt attitudes and behaviours in response to the social cues provided by agars with whom they have contact is called ____________.

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. SIP Model

  2. Socialisation

  3. Social Learning

  4. Social Attitude

Show answer
Correct Option: A

Which of the following should not be called 'Sales'?

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. Office fixtures sold

  2. Goods sold for cash

  3. Goods sold on credit

  4. Sale of item previously included in 'Purchases'

Show answer
Correct Option: A

______ is used by business entities for keeping records of their monetary or financial transaction.

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. Accounting

  2. Cost accounting

  3. Costing

  4. Budgetary Control

Show answer
Correct Option: A

Accounting records only those transactions and events which are of -
X. Social character
Y. Financial character
Select the correct answer from the options given below:

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. X only

  2. Y only

  3. Both X and Y

  4. None of above

Show answer
Correct Option: B
Explanation:

Accounting records only those transactions & events in terms of money which are of a financial character. Transactions which are not of a financial character are not recorded in the books of account.

________ is the language of business and used to communicate financial and other information to different interested parties like creditors, investors, researchers, governments etc.

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. Accounting

  2. Cost Accounting

  3. Costing

  4. Management Accounting

Show answer
Correct Option: A

Which of the following account is tangible real account _____________.

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. Patent

  2. Goodwill

  3. Machinery

  4. Creditors

Show answer
Correct Option: C