Tag: commercial applications

Questions Related to commercial applications

Non-monetary events like, death, dispute, sentiments, efficiency etc. are _______ in the books, even though these may have a great effect. 

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Not recorded

  2. Recorded

  3. Recorded if suggested by external auditors

  4. Recorded if suggested by internal auditors

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Correct Option: A

In accrual system of accounting ______________________.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Revenues are taken care of irrespective whether cash is received or not

  2. Cost incurred during the period is taken care of

  3. Both a & b

  4. Cost of last financial period is only taken care of

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Correct Option: C

Which of the following is a formal written promise to pay a definite sum of money on demand or at a fixed or determinable future date?

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Account payable

  2. Account receivable

  3. Accounts payable

  4. Prepaid insurance policy

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Correct Option: C

The total amount column of the purchases return book is _______________.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Credited to purchases returns account

  2. Debited to sales return account

  3. Credited to sales return account

  4. Debited to purchases returns account

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Correct Option: A

______ is an intagible real account.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Land

  2. Building

  3. Goodwill

  4. Cash

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Correct Option: C

____ period is normally adopted for accounting purpose. 

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. 6 months

  2. 12 months

  3. 9 months

  4. 24 months

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Correct Option: B

Accounting policies refer to specific accounting ________ and _______ .

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Principles

  2. Methods of applying those principles

  3. Both (a) and (b)

  4. Standard

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Correct Option: C

Rs. 1,000 being the monthly total of discount allowed to customers was credited to discount account in the ledger. If rectification is done before preparation of trial balance then which of the following is correct? 

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Discount A/c      Dr.         2,000
            To Suspense A/c               2,000

  2. Discount A/c      Dr.        1,000
            To Suspense A/c               2,000

  3. Credit the Discount Account with Rs. 2,000 saying "To Rectification of wrong credit of Rs. 1,000 for discount allowed.... Rs. 2,000.

  4. Debit the Discount Account with Rs. 2,000 saying "By Rectification of wrong credit of Rs. 1,000 for discount allowed.... Rs. 2,000.

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Correct Option: D

If an amount paid for servicing vehicles has been posted in error to Motor Vehicles account the journal entry necessary to correct this error should require which of the following _________________.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. Debit Vehicle Maintenance A/c and credit Motor Vehicles A/c

  2. Debit Cash A/c and credit Motor Vehicles A/c

  3. Debit Motor Vehicles A/c and credit Vehicle Maintenance A/c

  4. Debit Vehicle Maintenance A/c and credit Cash A/c

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Correct Option: A

If the change in accounting policy has a material effect in current period and the effect of change is ascertainable in part _________________.

commercial applications bases of accounting cash and mercantile system basis of accounting basis of accounting system

  1. The amount of change should be disclosed

  2. The fact of change should be disclosed

  3. The fact of change should not be disclosed

  4. None of these

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Correct Option: B