Tag: basis of accounting system

Questions Related to basis of accounting system

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

Mr.Ashok buys clothing of Rs.50,000 paying cash Rs.20,000. What is the amount of expense as per the accrual concept?

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

  1. Rs. 30,000

  2. Rs. 20,000

  3. Rs. 50,000

  4. Nil

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Correct Option: C

An entry for the goods sold to Madhav for Rs. 1,020 was posted to his account as Rs. 1,200. 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. Supense A/C      Dr.        180
           To Madhav A/C                 180

  2. Profit & Losdd Adj. A/c     Dr.     180
            To Madhav A/c                           180

  3. Credit Madhav with Rs. 180 saying "By Excess debit for sales Rs. 180"

  4. Debit Madhav with Rs. 180 saying "To Excess debit for sales Rs. 180"

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Correct Option: C

When a change in accounting policy is justified?

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

  1. To comply with accounting standard

  2. To ensure more appropriate presentation of the financial statement of the enterprise

  3. to comply with law

  4. All of the above

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Correct Option: D

All of the following are valuation principles except ___________________.

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

  1. Historical cost

  2. Current cost

  3. Realizable value

  4. Future value

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Correct Option: D

Companies are regulated by Companies Act, ______.

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

  1. 1972

  2. 1929

  3. 2013

  4. 1955

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Correct Option: C

Match List I with List II and select the correct answer using the codes given below the lists.
List I                                                    List II
A. Doctrine of ultra vires                    1. Articles of association
B. Doctrine of indoor management    2. Prospectus
C. Doctrine of golden rule                   3. Memorandum of association

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

  1. A-1, B-3, C-2

  2. A-3, B-1, C-2

  3. A-2, B-1, C-3

  4. A-3, B-2, C-1

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Correct Option: B