Tag: accounting process

Questions Related to accounting process

Casual vacancy occurs only when ________.

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

  1. Direction dies

  2. Declared incompetent

  3. Resigns

  4. All of the above

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Correct Option: D

Business is treated as a separate entity accounts for ______________.

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

  1. Limited Liability Partnership

  2. Partnership

  3. Company

  4. All of the above

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Correct Option: D
Explanation:

Accounting is based on certain basic concepts. One of the concept is "Separate Entity Concept". This defines that, for all accounting purposes, the business is considered to be a separate entity distinct from its owners. The transactions of business are recorded in the books of the business and the position of owner in his business will be like other creditors. 

This concept applies to all the forms of businesses.

A vacant position that arises because of the resignation of the director can only be filed in ____________.

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

  1. Annual general meeting

  2. Board meeting

  3. Board meeting but expired at the general meeting

  4. Both A and B

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Correct Option: C

Insurance claim for loss-in-transit received by consignor is _________________.

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

  1. Credited to Bank Account

  2. Debited to Insurance Co.

  3. Credited to Abnormal Loss Account

  4. Debited to Consignment Account

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Correct Option: C
Explanation:

A loss by theft or losses by fire, flood, earthquake, war, accidents, in transit, etc. are abnormal losses. These losses are avoidable and not inherent in nature. These losses reduce the value of closing stock as well as profit. 

After finding out the value, credit the Consignment A/c and debit the Abnormal Loss A/c.

  1. The cost of stock as per physical verification as on 24th March amounted to Rs.2,00,000. Purchases as per Purchases Book after stock taking till 31st March amounted to Rs.2,00,000 and included the following:
    (i) Rs.10,000 for goods received till 23rd March.
    (ii) Rs.20,000 for goods received on 1st April. Sales as per Sales Book after stock taking, till 31st March amounted to Rs.2,00,000 and included the following:
    (I) Rs.10,000 for goods delivered till 23rd March. (II) Rs.20,000 for goods delivered on 1st April. Goods are sold by the trader at a profit of 25% on Cost. The value of stock as per books Is ____________.
commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

  1. Rs.2,40,000

  2. Rs.2,38,000

  3. Rs.2,36,000

  4. Rs.2,34,000

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Correct Option: B

The debit side of manufacturing Account __________________.

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

  1. is always equal to its credit side

  2. is always more than its credit side

  3. is always less than its credit side

  4. None of these

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Correct Option: B

Under sales on return or approval basis, the ownership of goods is passed only ____________________.

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

  1. when the retailer gives his approval

  2. if the goods are not returned within specified period.

  3. Both (a) and (b)

  4. None of the above

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Correct Option: C

Sales to Meena Rs. 143 was debited as 413 _________________.

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

  1. is an error of omission

  2. will not affect the trial balance

  3. will not affect the profit

  4. None of these

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Correct Option: D

The secretary of a company is generally appointed by ________________.

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

  1. Registrar of companies

  2. Central government

  3. Shareholders in AGM

  4. None of the above

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Correct Option: D
Explanation:

 A company Secretary is appointed by the resolution of the board. A company secretary is entitled to become the director of the company with the prior permission of the board.

The liability of auditor can be ____________.

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

  1. Only civil

  2. Only criminal

  3. Either civil or criminal

  4. Civil and/or criminal

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Correct Option: D