Tag: commercial applications

Questions Related to commercial applications

State true of false :
Book-keeping is an art as well as science. 

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. True

  2. False

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Correct Option: A
Explanation:

Book keeping is both art and science. It is art as it requires creative and judgment and  skills. In order to perform accounting functions well discipline and training is required. It is also be considered as science because it is a body of knowledge. 

State true of false :
Trading concern is established for rendering services to the society. 

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. True

  2. False

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Correct Option: B
Explanation:

Trading concern is an entity that derives its product for sale, thereby revenue, through purchasing products for sale from other producers /manufacturers for resale to their customers. It is a commercial company and trade as the act of buying and selling goods and services. It is established for making some profit not for rendering services to the society. 

Accounting is a process of recording, classifying, summarising, analysing and interpreting the financial transactions and communicating the result thereof to the users of such information. State whether the statement is true or false.

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

As per the definition of accounting, it is a process of recording, classifying, summarising, analysing and interpreting the financial transactions and communicating the result thereof to the users of such information.

The work of accounting depends upon________. 

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. Book keeping

  2. Cash book

  3. Subsidiary books

  4. Ledger

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Correct Option: A
Explanation:

Book- keeping is the process of the daily record - keeping of all of a company financial transactions. Book- keepers record the sales, expenses, cash and bank transactions of the business in a general ledger. The first thing you need to do when you start a business is realizing that this ledger and its accuracy are central to your company finances. So the work of accounting depends upon book keeping as the book keeping is the base of recording all the transactions. 

Book - keeping is an art and science of recording transactions.

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. True

  2. False

Show answer
Correct Option: A
Explanation:

Book keeping is both art and science. It is art as it requires creative and judgment and skills in order to perform accounting functions well discipline and training is required. It is also considered as science because it is a body of knowledge.  

Customs and traditions which guide the accounts to prepare accounting statements are called ______________. 

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. conventions

  2. principles

  3. concepts

  4. procedure

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Correct Option: A
Explanation:

Conventions are the guidelines that arise from the practical application of accounting principles. It is not legally binding practice rather, it is a generally accepted convention based on customs and designed to help accountants  overcome practical problems that arise out of the preparation of financial statements. 

State true of false :
In Book - keeping & accountancy non- monetary transactions are also recorded. 

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

Book-keeping &  accountancy both only record the transaction which are related with money and money 's worth.  It record transactions which are the agreements between a buyer and a seller to exchange goods and services for money. 

Book- keeping and accounting are one and the same thing. 

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. True

  2. False

Show answer
Correct Option: B
Explanation:

Book - keeping and accounting are not the same thing although they both involve the process of recording the financial transactions  of a business. Book -  keeping  are two different  terms. 

            Book -  keeping is the process of recording in chronological order, the daily  transactions of a  business entity. On the other hand accounting is an information system includes the process of recording, classifying, summarizing, reporting and interpreting the financial condition and performance of a business. Book keeping forms the part of accounting. 

A person who is unable to pay his debts, is called_______. 

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. insolvent

  2. solvent

  3. well to do

  4. poor

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Correct Option: A
Explanation:

A person or firm whose liabilities exceed the value of owned assets is termed as insolvent. It is the inabilities of the company or person to pay liabilities as they become due. 

The work of book-keeping is of __________ nature. 

commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. competitive

  2. primary/basic

  3. secondary

  4. none of these

Show answer
Correct Option: B
Explanation:

Book-keeping is primary/basic in nature as it is a part of accounting itself. Literally, it means the activity of keeping financial books i. e recording financial transactions and events.