A
Decision making
B
Measurement
C
Forecasting
D
Ledger Posting
A
Records prepared uder book keeping process
B
Trial Balance
C
Balance Sheet
D
None of the above
Balance sheet is a known as the positional statement as it shows the financial position of the business. Balance sheet is prepared at the particular date usually at the end of financial year. Balance shows the lists of all assets and liabilities of the business.
Correct Answered :
Wrong Answered :
A
Assets expressd in monetary terms
B
Liabilities expressed in monetary terms
C
Only assetts expressed in non monetary terms
D
Assets and liabilities expressed in non mometary terms
A
Debtor account
B
Bad debts account
C
Cast account
D
Sales account
In the normal course of business, there are certain customer who does not pay the amount to the business despite regular follow ups. The unrecoverable amount is considered as bad debts. Bad debts is a loss to the organization and should be debited to profit & loss account by crediting the customer account.
Accounting entry will be as under:
Bad Debts A/c Dr.
To Customer (Debtor) A/c
Correct Answered :
Wrong Answered :
A
Overdraft as per passbook
B
Favourable balance as per passbook
C
Both A and B
D
None of the above
A credit balance in cash book is a overdraft as per pass book. The bank maintains the customer account which is further printed in the passbook. The passbook is made from the view point of the bank hence customer depositing money is a liability to the bank and is credited. Therefore when the balance is unfavourable it shows a debit balance because they will receive money from the customer. The debits and credit of pass book and cash book are opposite.
Correct Answered :
Wrong Answered :
A
as an income
B
as an expense
C
as an asset
D
as a liability
An expired cost is a cost that has been recognised as an expense. This happens when a business entity fully consumes or receives benefit from a cost . An expired cost may also be construed as the total loss in value of an asset.
Correct Answered :
Wrong Answered :
A
Capital is equal to assets minus liabilities
B
Capital is equal to assets plus liabilities
C
Assets are equal to liabilities minus capital
D
Liabilities is equal to capital plus assets
A
An expense
B
An income
C
An asset
D
A liability
A
Expenditure
B
Expense
C
Gain
D
None of the above
Interest on drawing is a gain for the firm. It is calculated at the agreed rate. The amount of interest on drawings will be credited to Profit and Loss Appropriation Account and will be debited to partner`s capital account/current account (individually).
Correct Answered :
Wrong Answered :
A
Land
B
Goodwil
C
Copyright
D
Patent rights
An intangible asset or resource is an asset that isn`t physical in nature. Patent rights, goodwill, brand acknowledgment, and protected innovation, like licenses, brand names, and copyrights, are largely a part of intangible resources. Tangible resources incorporate land, vehicles, hardware, and stock.
Correct Answered :
Wrong Answered :
A
Increased liability
B
Decrease assets
C
Decrease in total assets
D
No effect of total of assets
A
Compound journal entry
B
Separate journal entry
C
Posting
D
None of the above
A
Income tax account
B
Bank Account
C
Capital Account
D
Not to be shown in the business books
A
A credit to the cash received account of Rs 2100
B
A credit to the accounts receivable amount of Rs 2100
C
A debit to the cash account of Rs 1400
D
A debit to the accounts receivable account of Rs 1400
A
Dr. P & L a/c and Cr. Cash embezzlement a/c Rs 6000
B
Dr. Cash embezzlement a/c and cr. cash a/c Rs 6000
C
Dr. cash a/c and Cr. P & L a/c rs 6000
D
None of the above
A
Dr drawings and Cr. cash a/c Rs 1200
B
Dr. drawings and Cr. petty cash a/c Rs 1200
C
Dr income tax and Cr cash a/c Rs 1200
D
None of the above
A
Dr. plant repairs a/c and Cr. cash a/c rs 3000
B
Dr wages a/c and Cr. cash a/c 3000
C
Dr. plant a/c and Cr. cash a/c 3000
D
None of the above
A
Accured interest Dr. to customer
B
Accrued interest A/C dr To interest A/C.
C
Cash a/c Dr. to interest
D
None of the these
A
Credited to bad debts recovered account
B
Credited to debtors account
C
Debited to profit and loss account
D
None of the above
While journalizing for bad debts debtor`s personal account is credited and bad debts account is debited because bad debts written off are treated as a loss to the business and now when they are recovered it is seen as a fresh gain.
Correct Answered :
Wrong Answered :
A
Total cost of goods sold for the period.
B
The quantity of a particular product sold during the period.
C
The amount owed to a particular creditor.
D
The portion of total current assets that consist of cash
A
Trial balance
B
Journal
C
Ledger
D
Both B and C
All cash transactions are primarily recorded in it as soon as they take place; so it is a journal (a book of original entry). On the other hand, the cash aspect of all cash transactions is finally recorded in the Cash Book (no posting in Ledger); so a Cash Book is also a Ledger (a book of final entry).
Correct Answered :
Wrong Answered :
A
Credit sales return
B
Cash sales return
C
Both A and B
D
Purchase return
Goods sold on credit when returned by the customer is recorded in returned inward book or sales return book. Sales return book shows a debit balance as it is reverse to the sales, which has credit balance. When the goods are returned by the customer one note is prepared which is called as "Credit note". The returned outward book is used to record return of goods purchased on credit.
Correct Answered :
Wrong Answered :
A
Balance Sheet
B
Income Statement
C
Ledger
D
Notes and Schedules
The financial position of a reporting entity at the end of an accounting period is typically explained by the **balance sheet**. The balance sheet provides a snapshot of the entity`s assets, liabilities, and equity at a specific point in time, usually at the end of the financial year.
Correct Answered :
Wrong Answered :
A
Ledger
B
Voucher
C
Journal
D
None of the above
The written evidence in support of a business transaction is a **voucher**. Vouchers are documents that provide proof of the occurrence of a transaction, such as invoices, receipts, bills, or any other document supporting a financial transaction.
Correct Answered :
Wrong Answered :
A
Intangible
B
Fixed
C
Current
D
Tangible
Trademarks, copyrights, and patents are classified under **intangible assets**. Intangible assets are non-physical assets that provide a company with long-term value, often through legal protections or intellectual property rights.
Correct Answered :
Wrong Answered :
A
Losing Capital
B
Gaining Capital
C
Fixed Capital
D
Working Capital
Current assets minus current liabilities equals **working capital**. Working capital represents the liquidity available to a business after deducting its short-term liabilities from its short-term assets.
Correct Answered :
Wrong Answered :
A
Bank Account
B
Commission Account
C
Furniture Account
D
Interest Received Account
Among the options listed, the **commission account** comes under nominal accounts. Nominal accounts are accounts that relate to revenues, expenses, gains, or losses, such as income and expense accounts used in businesses for tracking transactions.
Correct Answered :
Wrong Answered :
A
Credit Note
B
Bills Payable Book
C
Debit Note
D
Purchase Return Book
The statement sent along with the purchase return is typically called a **debit note**. A debit note is a document issued by a buyer to a seller as a formal request for a credit note, usually when goods are returned or when there is an overcharge. It serves as a record of the return and the adjustment needed in the seller`s accounts.
Correct Answered :
Wrong Answered :
A
Raw Material
B
Finished Products
C
Both A & B
D
Machines
Among the options provided, **raw material** is not considered inventory in the traditional sense because it refers to materials and components that are yet to be used in production or are in the process of being used. Finished goods, on the other hand, are completed products ready for sale or distribution and are typically considered inventory.
Correct Answered :
Wrong Answered :
A
Trading A/C
B
Profit and Loss Appropriatioin A/C
C
Receipt Payment A/C
D
Trading and P/L A/C
The account which shows the classified summary of transactions of a cash book in a non-trading concern is known as the **receipts and payments account**. This account summarizes all cash receipts and payments made by a non-trading organization (such as clubs, charities, or societies) during a specific period, similar to how a cash flow statement operates in a trading concern.
Correct Answered :
Wrong Answered :
A
A bill drawn in India on a person resident outside India and made payable outside India
B
A bill drawn outside India and made payable outside India
C
A bill drawn outside India and made payable in India
D
A bill drawn in India and made payable in India
Correct Answered :
Wrong Answered :
A
Manufactering Sector
B
Industrial Sector
C
Service Sector
D
None of these
The banking sector comes under the **service sector**. The service sector includes industries that provide services rather than producing tangible goods. Banking and financial services are a significant part of the service sector, which also includes areas such as healthcare, education, hospitality, and information technology services.
Correct Answered :
Wrong Answered :
A
Ledger
B
Trial Balance
C
Journal
D
All of these
The **Trial Balance** is used for checking the arithmetical accuracy of the account books. It lists the balances of all ledger accounts and helps ensure that total debits equal total credits, indicating that the books are mathematically accurate.
Correct Answered :
Wrong Answered :
A
Capital
B
Net Income
C
Working Capital
D
Goodwill
When assets are subtracted from liabilities, it will be equal to **capital** (also referred to as equity or owner`s equity). This represents the residual interest in the assets of the entity after deducting liabilities.
Correct Answered :
Wrong Answered :
A
Cash equivalent
B
Intangible asset
C
Operating asset
D
Cash asset
A current asset that can be converted into cash within three months is known as a **cash equivalent**. Cash equivalents are highly liquid assets that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Examples include treasury bills, commercial paper, and money market funds.
Correct Answered :
Wrong Answered :
A
Debit side of Income and Expenditure Account
B
Credit side of Income and Expenditure Account
C
Liability Side of Balance Sheet
D
Assets side of Balance Sheet
The amount of subscription received from members by a Non-Profit organization is typically shown on the Credit side of the Income and Expenditure Account. In the context of non-profit organizations, the Income and Expenditure Account functions similarly to an Income Statement in a for-profit organization, where income (such as subscriptions) is listed on the credit side as revenue.
Correct Answered :
Wrong Answered :
A
Conditional days
B
Additional days
C
Days of grace
D
Days of rebate
Three additional days given by a drawer to the drawee for payment are known as "days of grace." These days are typically added to the due date of a bill of exchange or promissory note, allowing the drawee additional time to make payment without incurring penalties or default.
Correct Answered :
Wrong Answered :
A
Capital expenditure
B
Revenue expenditure
C
Deferred revenue expenditure
D
None of the above
The amount spent on increasing the seating capacity in a cinema hall would generally be considered a **capital expenditure**.Here`s why:Capital expenditures are expenses incurred to acquire, improve, or extend the life of an asset. Increasing the seating capacity in a cinema hall involves significant construction or renovation work, which typically enhances the cinema hall as a long-term asset of the business. These expenditures are not consumed immediately but are expected to provide benefits over multiple accounting periods. Therefore, they are treated as capital expenditures.In contrast, revenue expenditures are generally incurred for the day-to-day operations of the business to maintain current operations and are expensed in the period they are incurred. Examples of revenue expenditures in the context of a cinema hall might include routine maintenance costs, cleaning expenses, or advertising costs for current showings.To summarize, the amount spent on increasing the seating capacity in a cinema hall is classified as a **capital expenditure** because it involves improving a long-term asset (the cinema hall) rather than being a day-to-day operating expense.
Correct Answered :
Wrong Answered :
A
Depreciable value
B
Scrap value
C
Market value
D
None of these
The total amount of depreciation of an asset cannot exceed its depreciable value
Correct Answered :
Wrong Answered :
A
Profit and loss statement
B
Balance Sheet
C
Cash Flow Statement
D
All of the Above
The overriding purpose of financial accounting is to summarize financial activity in business in the **financial statements**.Financial statements typically include:1. **Income Statement (Profit and Loss Statement):** Summarizes revenue, expenses, and profits over a specific period.2. **Balance Sheet:** Provides a snapshot of a company`s assets, liabilities, and shareholders equity at a specific point in time.3. **Cash Flow Statement:** Shows the inflows and outflows of cash over a period.4. **Statement of Changes in Equity:** Details changes in the company`s equity over a period.These statements are used by various stakeholders, including investors, creditors, management, and regulators, to assess the financial health and performance of the business.
Correct Answered :
Wrong Answered :
A
Buyer of goods granted discount by seller
B
Deduction when we receive cash
C
Given by us when we sell goods on credit
D
None of these
Discounts received are:**Buyer of goods granted discount by seller**This means that the buyer of goods receives a reduction in the purchase price from the seller, often for reasons such as early payment or bulk purchasing. This discount is recorded in the buyer`s financial records as a reduction in the cost of purchases or expenses.
Correct Answered :
Wrong Answered :
A
A metric that expresses the time (measured in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales
B
The time it takes a company to buy goods, sell them and receive cash from the sale of said goods
C
The process of hiring personnel to conduct the daily operations of the business
D
Colective process of identifying, analysing, and recording the accounting events of a company
An operating cycle, also known as the cash conversion cycle, refers to the period it takes for a business to purchase inventory, sell the inventory, and collect cash from the sale. It essentially measures the efficiency and effectiveness of a company’s operations and management.The operating cycle can be broken down into three main components:1. **Inventory Period:** The time it takes for a company to purchase inventory and then sell it. This includes the duration that the inventory is held before it is sold.2. **Accounts Receivable Period:** The time it takes for the company to collect cash from customers after the sale of inventory. This period starts when the inventory is sold and ends when the payment is received from customers.3. **Accounts Payable Period:** The time the company takes to pay its suppliers for the inventory purchased. This period starts when the inventory is purchased and ends when the payment is made to suppliers.The formula to calculate the operating cycle is:[ ext{Operating Cycle} = ext{Inventory Period} + ext{Accounts Receivable Period} - ext{Accounts Payable Period} ]A shorter operating cycle indicates that a company is able to quickly turn its inventory into cash, which is generally a sign of efficiency and good management. Conversely, a longer operating cycle may indicate inefficiencies or potential liquidity issues.
Correct Answered :
Wrong Answered :
A
A very short life
B
An indefinite life
C
A long life
D
None of the above
According to the going concern concept, a business entity is assumed to have an indefinite or continuous life. This accounting principle implies that the business will continue to operate for the foreseeable future and has no intention or need to liquidate or significantly curtail its operations.
Correct Answered :
Wrong Answered :
A
Rent expenses
B
Cash received
C
Received a Discount
D
Purchases
In a ledger account, the following item will appear on the credit side:
Received a Discount
Correct Answered :
Wrong Answered :
A
Sales account
B
Purchases account
C
Loss by theft account
D
No entry
Stolen merchandise should be debited to:
Loss by theft account
When merchandise is stolen, it represents a loss to the business. According to accounting principles, losses such as theft are typically recorded in a specific account called "Loss by theft" or "Loss on theft of merchandise." This allows the business to track and report such losses separately from other types of expenses or revenues.
Correct Answered :
Wrong Answered :