Tag: stages and functions 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

An economic event that involves transfer of money or money's worth is a/are _______________.

  1. financial transactions

  2. barter system

  3. settlements

  4. receipts/payments
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Any event which involves transfer of money or money's worth is known as financial transaction. It is an agreement, or communication, carried out between a buyer and a seller to exchange an asset for payment. It is still a transaction if the goods are exchanged at one time, and the money at other.

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 after sale of goods worth Rs 10,000, there is closing stock of Rs 20,000. This is _____________.

  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 Assets'.

An event can be internal or external. This is an internal event.
There is no exchange of goods or services or money. Hence, it cannot be termed as 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

Ram paid rent 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

'Transaction' involves money or money's worth, and hence, has a financial impact in the books of accounts.

Event may or may not have a financial impact in the books of accounts.
Example: Change of Operations Manager of the company.
In the given example amount paid as rent involves a financial element as amount is paid by one person to another. 
Therefore, it is a transaction and not an event.

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

Closing Stocks with X and Y are 26400 & 60000 respectively. In the books of Y, what will be the treatment of closing stock in joint venture?

  1. Stock of 60000 will be shown as closing credit balance in Y's Account as 'To Balance c/d'.

  2. Stock of 26400 will be shown as closing debit balance in Y's Account as 'By Balance c\d'.

  3. Closing stock of 60000 will not appear in Y's Account.

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

In joint venture accounting, when a co-venturer retains stock, it is treated as a closing balance in the joint venture account. The stock is debited to the co-venturer's account, and since it is an asset for the venture, it appears as a credit balance in the venture ledger.

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

Discount charges of Rs 1000 on discounting a B/R by one of the co-venture, maintaining all joint ventures transactions in his books of account will be __________.

  1. debited to Joint Venture Account.

  2. debited to Profit & Loss Account.

  3. debited to Other Co-venturer's Account

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

Discounting a bill of exchange is a cost incurred for the joint venture. Therefore, the discount charges are treated as an expense of the venture and are debited to the Joint Venture 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

If adjusting entries are not passed __________________.

  1. Trial Balance will be not be tallied

  2. Balance Sheet will not be tallied

  3. Both trial balance & Balance Sheet will be tallied

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

Adjusting entries are the entries which are passed at the year end. The balance sheet as well as the trial balance will tally but the financial statements will not show a correct picture of the financial position of the company.

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.