Tag: generally accepted accounting principles (gaap)

Questions Related to generally accepted accounting principles (gaap)

A comprehensive theory of buyer behavior is formulated by _____________.

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

  1. W.J. Wheldon

  2. J.A. Howard

  3. Jagdish Sheth

  4. Both B and C

Show answer
Correct Option: D
Explanation:

 Te comprehensive theory of buyer behaviour is formulated by Howard and Sheth. They suggested that consumer decision making differs according to the strength of the attitude toward the available brands; this being largely governed by the consumer’s knowledge and familiarity with the product class. In situations where the consumer does not have strong attitudes they are said to engage in Extended Problem Solving (EPS), and actively seek information in order to reduce brand ambiguity.

'Ego' refers to ________________.

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

  1. Person's conscience

  2. The free mental mechanism

  3. The psychological mechanism

  4. The act of weighing consequences and trying to reconcile with reality

Show answer
Correct Option: D
Explanation:

These three elements of personality—known as the id, the ego, and the super ego—work are more primal and might pressure you to act upon your most basic urges. These urges and strive to make you conform to the demands of reality.

Specific cost is also known as the ________________.

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

  1. Opportunity cost

  2. Component cost of capital

  3. Incremental cost

  4. Differential cost

Show answer
Correct Option: B
Explanation:

The cost of each component of capital is known as specific cost of capital. A firm raises capital from different sources such as equity, preference, debentures, etc. 

Specific cost of capital is the cost of equity share capital, cost of preference share capital, cost of debentures, etc., individually.

Which of the following is an accounting equation?

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

  1. Capital = Assets + Liabilities

  2. Capital = Assets - Liabilities

  3. Assets = Liabilities - Capital

  4. Liabilities = Assets + Capital

Show answer
Correct Option: B
Explanation:

Accounting Equation :


Capital+Liabilities=Total Assets
Therefore, 
Capital= Total Assets- Liabilites.

Which of the following statement is true ?

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

  1. Insurance is not a gambling

  2. Insurance is not a wagering

  3. Insurance is a contract

  4. All of the above

Show answer
Correct Option: D
Explanation:
Insurance is not a gambling because it is use to cover risk losses gampling is speculative where as insurance is non-speculative
Insurance is not a wagering as insurance itself means surety of the risk cover
Insurance is the contract because it is an agreement where insurer promises to pay benefits to the insured.

State true of false :
Book-keeping is an art as well as science. 

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

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

Book keeping is both art and science. It is art as it requires creative and judgment and  skills. In order to perform accounting functions well discipline and training is required. It is also be considered as science because it is a body of knowledge. 

State true of false :
Trading concern is established for rendering services to the society. 

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

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

Trading concern is an entity that derives its product for sale, thereby revenue, through purchasing products for sale from other producers /manufacturers for resale to their customers. It is a commercial company and trade as the act of buying and selling goods and services. It is established for making some profit not for rendering services to the society. 

Accounting is a process of recording, classifying, summarising, analysing and interpreting the financial transactions and communicating the result thereof to the users of such information. State whether the statement is true or false.

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

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

As per the definition of accounting, it is a process of recording, classifying, summarising, analysing and interpreting the financial transactions and communicating the result thereof to the users of such information.

The work of accounting depends upon________. 

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

  1. Book keeping

  2. Cash book

  3. Subsidiary books

  4. Ledger

Show answer
Correct Option: A
Explanation:

Book- keeping is the process of the daily record - keeping of all of a company financial transactions. Book- keepers record the sales, expenses, cash and bank transactions of the business in a general ledger. The first thing you need to do when you start a business is realizing that this ledger and its accuracy are central to your company finances. So the work of accounting depends upon book keeping as the book keeping is the base of recording all the transactions. 

Book - keeping is an art and science of recording transactions.

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

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

Book keeping is both art and science. It is art as it requires creative and judgment and skills in order to perform accounting functions well discipline and training is required. It is also considered as science because it is a body of knowledge.