Tag: objectives, functions, and importance of accounting

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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

Business transaction in which cash is not paid or received immediately is known as ______________.

  1. Cash transaction

  2. Non monetary transaction

  3. Credit transaction

  4. Transaction in kind
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Credit transaction means any transaction by the terms of which the repayment of money loaned  or loan commitment made or payment for goods, services or properties sold or leased is to be made at future date or dates. In other words  credit transaction means goods or services are purchased but the payment will settle in a later 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

Exchange of goods and services either for cash or any other goods or services is known as _______________ .

  1. Transaction

  2. Narration

  3. Monetary transaction

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A event involving some value between two or more entities. It can be purchase of goods, receipt of money, payment to a creditor, incurring expenses, etc. A transaction is a business event that has a monetary impact on entity's financial statements, and is recorded as an entry in its accounting  records. A high-volume transaction, such as billing to a customer, may be recorded in a specialized journal, which is then summarized and posted to the general ledger. Alternatively, lower-volume transactions are posted directly to the general ledger. A transaction can be a cash transaction or a credit 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

Sale or purchase of goods or services for immediate cash payment is known as ____________ .

  1. Cash transaction

  2. Credit transaction

  3. Non-monetary transaction

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

The term "transaction" refers to any business dealing or event which has a value measurable in terms of money and which involves transfer of money or money's worth  between the business and others. The capital introduced by the proprietor, the amount withdrawn by the proprietor, purchase of goods on cash or credit, selling of goods for cash or credit, receipt of money from a debtor, payment to a creditor, borrowing of loan from the bank or payment of a loan, payment of salaries, rent, telephone charges, and receipt of incomes such as discount, rent and interest are examples of transactions. Cash transactions refer to any transaction which involves immediate payment or receipt of cash, e.g. purchase of goods for cash, sale of goods for cash, and payment of expenses or receipt of incomes

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

Money value of the reputation of business is known as ______.

  1. Copyright

  2. Goodwill

  3. Patents

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

Business goodwill is a key intangible asset that represents the portion of the business value that cannot be attributed to other business assets. The value of a company brand name, solid customer relations, good employee relations represent goodwill. 

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

Period of time for which accounts of the business are prepared is _____________.

  1. Financial year

  2. Calendar year

  3. Assessment  year

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

Every organization surely want to analyse the overall business performance. Normally this is 12 month or a period of a year. This year is called accounting year, also termed as financial year.

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 transaction is concerned with money and money 's worth. 

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A transaction is an agreement between a buyer and a seller to exchange goods, services or financial instruments. Transaction is a business event that has a monetary impact on an entity 's financial statements. For example - paying a supplier for services rendered or for supply of goods, paying an employee for hours work  etc.  This all are transactions and involve money and money' s worth. 

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

State True or False.
In barter transactions, goods or services are purchased for other goods or services. 

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The above statement is true as barter system is a system of exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange such as money. 

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

State True or False.
In credit transaction, goods or services are purchased for cash only.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In credit transaction goods or services are purchased but the payment is settle in a later date and in cash transactions payment is settled immediately. 

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

Narration is written just above an entry. 

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A brief about the journal entry is written after every journal entry to give the transaction details about the journal entry. 


This can be shown as:

Sanjay & Co.                                   Dr.
           To Sales A/c
(Being goods sold on credit through sales Invoice No. 07/18-19 to Sanjay & Co.)

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

Gopal Sons starts a business by investing Rs. 15 lakh and purchases goods worth Rs.12.5 lakh. At the end of the year he is left with a profit of Rs.1,50,000. The surplus profit of Rs.1,50,000 is a /an_________.

  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. An event is the happening, consequence or result of the transaction. Hence in our example the surplus profit is an event which is result of transaction.