Tag: meaning and features of balance sheet

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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

"Debit the receiver and credit the giver" is the golden rule for which type of account?

  1. Real A/c

  2. Personal A/c

  3. Nominal A/c

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

"Debit the receiver, and credit the giver" is a golden rule for Personal A/c. Personal accounts are the accounts for individual, firms, companies etc. By debit the receiver means the person who is receiving goods on credit will be debited and the person who is giving will be credited.  

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

General reserve account and dividend equalization fund account are ______________.

  1. Personal A/C

  2. Real A/C

  3. Nominal A/C

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

General reserves and dividend equalization funds are appropriations of profit. They are not personal accounts (people) or real accounts (assets), but rather nominal accounts representing equity reserves.

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

What rate of commission is charged by the bank issuing the credit card?

  1. 1% to 3%

  2. 3% to 6%

  3. 2% to 5%

  4. 1% to 4%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The bank issuing the credit card charges a commission from anywhere between 1% to 4% for each such transaction. The commission charged is immediately debited to the seller's bank account.

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

When the form and flow of operations of an entity are so devised that automatic checks are carried out as the transaction occurs, it is called _________________.

  1. Test check

  2. Internal check

  3. Internal control

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

Internal check refers to an arrangement of duties where the work of one person is automatically checked by another, ensuring that no single person has control over all aspects of 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

Vouching may be formed as ____________________.

  1. Identification of the documentary evidence supporting the transaction

  2. Verification of the document supporting the transaction

  3. Authentication of document supporting the transaction

  4. Verification of the accuracy and authenticity of the transaction
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Vouching is the process of verifying the authenticity and accuracy of transactions by examining the supporting documentary evidence, such as invoices, receipts, and vouchers.

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

Which is an unearned income?

  1. Insurance premium received in advance

  2. Rent received in advance

  3. Depreciation

  4. Both A & B
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Unearned Income is that income which is received in advance. That mean income received against which services are not provided so far.

Insurance premium received in advance and Rent received in advance are the cases of unearned income. Accounting entry will be passed as under:

Income A/c                             Dr.
       To Unearned Income

Unearned Income is a liability and to be shown in the balance sheet. 

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

The bank statement reports a credit transfer of Rs.$4000$ from a customer. Accounting entries for this is _____________________.

  1. A debit in the cash account and a credit the account of the debtor concerned

  2. A debit in the bank account and a credit in the cash account

  3. A debit in the bank account and a credit in the account of the customer concerned

  4. A debit in the account of the debtor concerned and a credit in the bank account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

As per double entry system of accounting, every transaction affects two account. In the given transaction, Bank and customer account are affected. Bank account is a real account and customer account is a personal account. 

Following the rule of real account and personal account, below entry will be passed:

Bank A/c                                     Dr.                   4000
         To Customer A/c                                                        4000
        

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

The characteristic that is always present with joint venture is _____________.

  1. it has an end life

  2. there is no specific act for joint venture

  3. profit is ascertained only after the end of the specific venture

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

A joint venture is a business entity created by two or more parties generally to share the ownership to complete a specific task or venture. 

Joint venture is having a specific end life i.e. when the task is completed, the joint venture comes to an end. 
There is no specific act for joint venture as it is a kind of temporary partnership to conclude a specific task. Hence all applicable laws have to be followed.
Profit of joint venture is calculated only when the specific joint venture is completed. 

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

India suffered from deficit balance both in trade and balance and not invisibles, hence took up a number of Steps to manage the problem. Which one is not appropriate for this?

  1. Export control

  2. Current Account Convertibility

  3. Liberalised Export Policy

  4. Unified Exchange Rate
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 Export control regulations are federal laws that prohibit the unlicensed export of certain commodities or information for reasons of national security or protections of trade.

Multiple choice book keeping and accountancy accounting equation and business transactions 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

Current assets are those assets which get converted into cash ___________ .

  1. within six months

  2. within one year

  3. between one and three years

  4. between three and five years
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Current assets are assets that can be converted into cash within one fiscal year or one operating cycle. Current assets are used to facilitate day-to-day operational expenses and investments. As a result, short-term assets are liquid meaning they can be readily converted into cash.

Hence, current assets which get converted into cash within one year.