Tag: basic accounting terms

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Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

________ is used to mean a happening as a consequence of transaction(s).

  1. Event

  2. Transaction

  3. Dealing

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

Every economic activity is performed through transactions and events. A transaction may be a business, performance of an act or an agreement. Event is used to mean a happening as a consequence of transaction(s).

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

An accountant records a transaction if ________ .

  1. it is substantiated by a documentary evidence

  2. it has tax implication

  3. it is so required by the Management

  4. it is mandatory as per Statutory requirement
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Any business transaction which occur during the course of business must have the documentary evidence. Since the accounts of the business need to be audited in future, all evidence must be available for records.

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

______ describes a record of the transaction.

  1. Income statement

  2. Journal

  3. General ledger

  4. Charter of accounts
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The transactions are recorded first of all in the journal and then they are posted to the ledger. Thus the journal is the book of first or original entry while the ledger is the book of second entry. Journal records transactions in a chronological order. Journal is more reliable then ledger. The process of recording transactions is termed as journalising.

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

_______ is the first phase of accounting cycle.

  1. Identifying an event or transaction

  2. Taking rational decision

  3. Designing Accounting system

  4. Preparing charter of accounts
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Accounting cycle starts only when there is an event or transaction of monetary value. If a transaction is completed, its considered an event to record the same in business books. Non economic transaction should not be considered as an event. Hence, no recording is done.

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

_______ is used to an economic event in accounting.

  1. Event

  2. Transaction

  3. Dealing

  4. Operations
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Every economic activity is performed through transactions and events. A transaction may be a business, performance of an act or an agreement. Transaction is used to an economic event in accounting.

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

Choose the wrong statement.

  1. Accounting is the language of business.

  2. Transactions are recorded in qualitative terms only.

  3. Accounting is the art of recording, classifying and summarizing.

  4. Transactions and events of financial character are subject-matter of accounting.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Accounting is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. transactions and events of financial information. It revels profit or loss for a given period, and the value and nature of firm's assets, liabilities and owner;s  equity. It is the language of business.

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

A business transaction in which money comes into the business immediately after the goods are delivered or services are rendered is called ____________.

  1. cash transaction

  2. credit transaction

  3. black money transaction

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

A cash transactions is a transaction where there is an immediate payment of cash for the purchases of an asset. It differs from other type of transactions that involves delayed delivery of purchased item, or delayed payment for the item.

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

A post dated cheque bears ______ date.

  1. Past

  2. No

  3. Future

  4. Present
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A post-dated check (or post-dated cheque) is a check written with a future date. In other words, the date that appears on the check is after the date when the check was written. Even with a future date appearing on the check, the check could clear (be paid from) the bank account prior to that date.

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

Ram purchased goods of Rs. $10,000$. This can be classified as _________.

  1. an event

  2. a transaction

  3. a transaction as well as an event

  4. neither a transaction nor an event
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Any exchange of value for value ( for money or money's worth) is called a transaction. Something having value is received, and something having value goes out.  Selling or purchasing of goods or taking or granting any loan are examples of transactions. 

Ram purchased goods of Rs.10000 is a transaction. 

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

On March 31, there is closing stock of Rs. $10,000$. This can be classified ________________.

  1. An event

  2. A transaction

  3. A transaction as well as an event

  4. Neither a transaction nor an event
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Unsold items i.e Closing stock is captured in the financial statements as 'Current Asset'. An event can be internal or external. This is an internal event.