Fundamentals of Accounting MCQ

<p>All of the above (D)</p> Signup and view all the answers

<p>Error of Principle (A)</p> Signup and view all the answers

<p>Sales minus Adjusted Purchases (C)</p> Signup and view all the answers

<p>Trading Account (D)</p> Signup and view all the answers

<p>Both Indirect Expenses and Income (D)</p> Signup and view all the answers

<p>Furniture (C)</p> Signup and view all the answers

<p>3 (D)</p> Signup and view all the answers

<p>Assets and Liabilities of the company (C)</p> Signup and view all the answers

<p>After the Trading Account (D)</p> Signup and view all the answers

<p>Both Trading Account and Profit &amp; Loss Account (A)</p> Signup and view all the answers

<p>Sales Return Account (B)</p> Signup and view all the answers

<p>Cost Accounting (C)</p> Signup and view all the answers

<p>Nominal Account (B)</p> Signup and view all the answers

<p>Measuring identified transactions &amp; events (D)</p> Signup and view all the answers

<p>Manager (B)</p> Signup and view all the answers

<p>Personal, Real, and Nominal Accounts (B)</p> Signup and view all the answers

<p>Debit Side (C)</p> Signup and view all the answers

<p>Cash Basis (A)</p> Signup and view all the answers

<p>Assets and liabilities of the company (D)</p> Signup and view all the answers

<p>Closing stock is recorded in both Trading Account and Balance sheet (B)</p> Signup and view all the answers

<p>Carriage Outward (A)</p> Signup and view all the answers

<p>Intangible Asset (B)</p> Signup and view all the answers

<p>Sundry debtors (A)</p> Signup and view all the answers

<p>Drawings (B)</p> Signup and view all the answers

<p>Sales - Return Inward (A)</p> Signup and view all the answers

<p>Creditors (D)</p> Signup and view all the answers

<p>Matching Concept (C)</p> Signup and view all the answers

<p>Harmonized with global standards (IFRS) (D)</p> Signup and view all the answers

<p>Personal Account (D)</p> Signup and view all the answers

<p>Conservatism (B)</p> Signup and view all the answers

<p>Journalizing (B)</p> Signup and view all the answers

<p>Journals (D)</p> Signup and view all the answers

<p>Account balances (C)</p> Signup and view all the answers

<p>Check the equality of debits and credits (B)</p> Signup and view all the answers

<p>Check the arithmetical accuracy of accounts (A)</p> Signup and view all the answers

<p>Errors of principle (B)</p> Signup and view all the answers

<p>Suspense Account (B)</p> Signup and view all the answers

<p>Errors are rectified after the trial balance is prepared (D)</p> Signup and view all the answers

<p>Forgetting to record a transaction (A)</p> Signup and view all the answers

<p>Credit to Purchases Account and debit to Sales Account (A)</p> Signup and view all the answers

<p>The trial balance will show a double difference (B)</p> Signup and view all the answers

<p>Purchase of machinery (B)</p> Signup and view all the answers

The difference between sales revenue and the cost of goods sold. A positive result is gross profit; a negative result is gross loss.

Costs associated with operating machinery or equipment.

A financial statement that outlines the costs and revenue related to buying and selling goods.

A financial statement that displays the revenue and expenses of a company over a period, showing the net profit or loss after all costs are accounted for.

A non-physical asset like goodwill, patents, or franchise rights.

Typically consists of 3 components: Trading Account, Profit & Loss Account, and Balance Sheet.

A financial statement that reports a company’s assets, liabilities, and owner’s equity at a specific point in time.

The value of unsold goods at the end of a financial period.

An accounting record that doesn't fully document a transaction.

Account used to record goods returned by customers.

Accounting method focused on calculating production costs.

An account used to record revenues, expenses, and gains/losses.

The first step in accounting, recognizing business activities.

A person within a company who uses accounting information.

An account used for individuals (like owners or customers).

Accounting method recording transactions when cash is received or paid.

Goods or services traded between different states within a country.

A summary of all debit and credit balances in a company's ledger accounts at a specific point in time.

Transferring information from the journal (where transactions are initially recorded) to the ledger (where balances are kept).

A mistake in accounting that violates fundamental accounting principles. Example: Treating revenue as an expense.

The total of debit balances always equals the total of credit balances in a Trial Balance, reflecting the fundamental accounting equation: Assets = Liabilities + Equity.

A balance sheet provides a snapshot of a company's financial health at a specific point in time. It lists the company's assets (what it owns), liabilities (what it owes), and equity (the owner's stake).

A liability is something a business owes to others, like money owed to creditors or suppliers.

Tangible assets are physical things a business owns that have monetary value, like buildings or machinery.

Intangible assets are non-physical things a business owns that have value, like patents, trademarks, or goodwill.

Current assets are assets that a business expects to use or convert into cash within one year.

Indirect expenses are costs that support the business's operations but don't directly relate to product creation.

Closing stock is the value of goods unsold at the end of an accounting period.

Net sales is the total sales revenue after deducting returns by customers.

A temporary account used to hold the difference when a trial balance does not tally. It helps identify and rectify errors later on.

A mistake where a transaction is completely forgotten and not recorded in the accounting system.

A mistake made when entering or recording a transaction, but the wrong amount or account is used.

The process of revising a trial balance after correcting errors. It's done to ensure the accuracy of the financial records.

The process of correcting mistakes in the accounting records, ensuring the financial data is accurate and reliable.

An expense for acquiring long-term assets, like machinery, buildings, or land, that provides benefits over multiple accounting periods.

Ensures that revenues and expenses are recognized in the same accounting period. This helps provide an accurate picture of a company's financial performance.

Indian Accounting Standards, harmonized with International Financial Reporting Standards (IFRS) to promote consistency and transparency in financial reporting.

A 'Bank' account is classified as a Personal Account in accounting. This refers to individuals or organizations that we owe money to or who owe money to us.

An accounting convention that emphasizes recording expenses or losses when they are probable, but delaying the recognition of revenues until they are realized. This creates a more cautious financial picture.

The first step in the accounting process is journalizing, which is the process of recording transactions in a journal.

Books of original entry, also known as journals, are the first place where transactions are recorded in an accounting system.

Goods and Services Tax (GST) is a tax on the supply of goods and services in India.

A trade discount is a reduction in price given for bulk purchases, while a cash discount is offered for prompt payment.