Tag: stages and functions of accounting

Quizzes (0) Questions (100)

Questions Related to stages and functions of 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

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.

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

Fresh capital introduction will increase _______________.

  1. Assets and Liabilities

  2. Assets and Equity

  3. Liabilities and equity and bank balance

  4. Capital and Liabilities
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When fresh capital is introduced into a business, the cash (an asset) increases and the owner's capital (equity) also increases to maintain the accounting equation: Assets = Liabilities + Equity.

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

Financial assets _________.

  1. directly contribute to the country's productive capacity

  2. indirectly to the country's productive capacity

  3. contribute to the country's productive capacity both directly and indirectly

  4. do not contribute to the country's productive capacity either directly or indirectly
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Financial assets, such as stocks and bonds, represent claims on future income and facilitate the flow of funds to productive sectors, thereby directly contributing to the country's productive capacity.

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

Capital gain of Rs. 75 lakh arising from transfer of long term capital assets will be exempt from tax if such capital gain is invested in the bonds redeemable after three years, issued by NHAI u/s 54EC of the Act.

  1. True

  2. False

  3. Cannot be said with certainty

  4. Is decided by the Assessing Officer
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Under Section 54EC of the Income Tax Act, capital gains from the transfer of long-term capital assets are exempt from tax if invested in specified bonds (such as NHAI or REC bonds) within the prescribed time limit, subject to the conditions of the Act.

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

"For the financial year ended as on March 31, 20XX the figures extracted from the balance sheet of Xerox Limited as under: Opening Stock Rs 29, 000; Purchases Rs 2, 42, 000; Sales Rs 3, 20, 000; Gross Profit 25% of Sales. Stock Turnover Ratio will be".

  1. 8 times

  2. 6 times

  3. 9 times

  4. 10 times
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Gross Profit = 25% of 3,20,000 = 80,000. Cost of Goods Sold (COGS) = Sales - Gross Profit = 3,20,000 - 80,000 = 2,40,000. Average Stock = (Opening Stock + Closing Stock) / 2. Assuming Closing Stock is not provided, we use the opening stock as a proxy or check the calculation: COGS / Average Stock = 2,40,000 / 30,000 (approx) = 8.