Tag: commercial studies

Questions Related to commercial studies

The rule of personal account states that Debit the receiver and Credit the giver.

commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

  1. True

  2. False

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Correct Option: A
Explanation:

Personal accounts are related to individuals, firms, companies, etc. A few examples of personal accounts include debtors, creditors, banks, outstanding/prepaid accounts, accounts of credit customers, accounts of goods suppliers, capital, drawings, etc.

Natural personal accounts are the simplest to understand out of all and includes all God's creations who have ability to deal, who, in  most cases, are people. E.g. Kumar's A/c, Adam's A/c, etc.
Artificial personal accounts are created artificially by law, such as corporate bodies and institutions, are called Artificial personal accounts.
Representative personal accounts represent a certain person or group directly or indirectly.
The golden rule for personal accounts: Debit the receiver; Credit the giver.

Examples of real account.

commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

  1. Creditor account

  2. Goodwill account

  3. Capital account

  4. Salary account

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Correct Option: B
Explanation:

All assets of a firm, which are tangible or intangible, fall under the category "Real Accounts".

Tangible real accounts are related to things that can be touched and felt physically. Few examples of tangible real accounts are building, machinery, stock, land, etc.
Intangible real accounts are related to things that can't be touched and felt physically. Few examples of such real accounts are goodwill, patents, trademarks, etc.
Golden rule for real accounts are: Debit what comes in; Credit what goes out.
Hence, of all the options above, goodwill account is a real account.

Which one of the following statements is correct?

commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

  1. Capital of the firm is reduced by borrowing

  2. Nominal accounts refer to false transactions

  3. When there is no change In proprietors capital, it is an indication of loss in business.

  4. Real accounts relate to the assets of a business

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Correct Option: D
Explanation:

Real account is an record of an asset. An asset can be current asset such as cash, a fixed asset such as building and intangible asset such as goodwill. Real account relate to the assets & liabilities of a business.

M/s Ram & Sons Ltd's Account is ________________.

commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

  4. None of these

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Correct Option: B

Ram's Capital Account is _______________.

commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

  4. None of these

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Correct Option: C

Advance Salary to Shyam Account is _______________.

commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

  4. None of these

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Correct Option: C

Interest receivable from Mohan, a Borrower Account is ______________.

commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

  4. None of these

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Correct Option: C

Salary Payable to Shyam Account is _____________.

commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

  4. None of these

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Correct Option: C

Interest received in advance from Mohan, a borrower Account is ________________.

commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

  4. None of these

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Correct Option: C

Ram's Drawings Account is _________________.

commercial studies accounting procedures - rules of debit and credit modern approach of rules of accounts meaning and classification of accounts classification of accounts

  1. Natural Personal Account

  2. Artificial Personal Account

  3. Representative Personal Account

  4. None of these

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Correct Option: C
Explanation:

Drawings account is a representative personal account. A representative personal account represents a person/persons. Some examples of representative personal account are capital, outstanding wages, prepaid salaries.