E-quiz On Acc & BST
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Questions and Answers
- 1.
The assets that can be easily converted into cash within a short period (i.e., 1 year or less is known as,
- A.
Current Assets
- B.
Fixed Assets
- C.
Intangible Assets
- D.
Investments
Correct Answer
A. Current AssetsExplanation
Current assets are assets that can be easily converted into cash within a short period, usually within one year or less. These assets include cash, cash equivalents, accounts receivable, inventory, and prepaid expenses. They are important for a company's liquidity and ability to meet its short-term obligations. Fixed assets, on the other hand, are long-term assets such as property, plant, and equipment. Intangible assets are assets that lack physical substance, such as patents or trademarks. Investments refer to assets that are held by a company for the purpose of generating a return or earning income.Rate this question:
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- 2.
If we take goods for own use we should:
- A.
Debit Drawings Account, Credit Purchases Account
- B.
Debit Drawings Account: Credit Stock Account
- C.
Debit Sales Account: Credit Stock Account
- D.
Debit Purchases Account: Credit Drawings Account
Correct Answer
A. Debit Drawings Account, Credit Purchases AccountExplanation
When we take goods for our own personal use, it is considered as a withdrawal from the business. Therefore, we need to debit the Drawings Account to record the withdrawal. At the same time, we need to credit the Purchases Account to reduce the inventory or stock level in the business. This ensures that the withdrawal is properly recorded and the inventory is adjusted accordingly.Rate this question:
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- 3.
According to Principle of Conservatism
- A.
Provision is made for bad and doubtful debts
- B.
Depreciation is charged on assets
- C.
Recording is made of outstanding expenses
- D.
All of the above
Correct Answer
A. Provision is made for bad and doubtful debtsExplanation
The principle of conservatism in accounting states that when there are uncertainties or doubts, it is better to anticipate losses rather than gains. Making provision for bad and doubtful debts is a conservative approach as it recognizes that some customers may not be able to pay their debts in the future. This provision helps to ensure that the financial statements reflect a more accurate picture of the company's financial position.Rate this question:
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- 4.
According to which principle the same accounting methods should be used each year:
- A.
Prudence
- B.
Full Disclosure
- C.
Materiality
- D.
Consistency
Correct Answer
D. ConsistencyExplanation
Consistency is the principle that states that the same accounting methods and procedures should be used consistently from year to year. This ensures that financial statements are comparable and allows users to make meaningful comparisons over time. By using consistent accounting methods, a company can provide reliable and accurate financial information, which is crucial for decision-making and evaluating its financial performance. Consistency also promotes transparency and reduces the risk of manipulation or bias in financial reporting.Rate this question:
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- 5.
Due to which principle qualitative transactions are not recorded in the book
- A.
Business Entity
- B.
Money Measurement
- C.
Historical cost
- D.
Dual Aspect
Correct Answer
B. Money MeasurementExplanation
Money measurement principle states that only those transactions and events that can be expressed in monetary terms should be recorded in the books of accounts. This principle ensures that only measurable and quantifiable transactions are considered for recording, as qualitative transactions cannot be objectively measured or valued in monetary terms. Therefore, qualitative transactions are not recorded in the books as per the money measurement principle.Rate this question:
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- 6.
A person who owes money to the firm is called -----
Correct Answer
DebtorExplanation
A person who owes money to a firm is called a debtor. This term is commonly used in the field of finance and accounting to refer to individuals or entities that have borrowed money from a company and have an outstanding debt that needs to be repaid. The firm has provided goods, services, or funds to the debtor, and the debtor is obligated to repay the amount owed according to the agreed-upon terms and conditions.Rate this question:
- 7.
Give fundamental accounting equation..
Correct Answer
Assets = Liabilities + Capital, assets=liabilities+capital , A=L+CExplanation
The fundamental accounting equation states that the total assets of a company are equal to the sum of its liabilities and capital. This equation is the foundation of double-entry bookkeeping and helps to ensure that a company's financial records are accurate and balanced. By understanding and applying this equation, businesses can track their financial position and make informed decisions about their operations.Rate this question:
- 8.
Purchases refers to the buying of
- A.
Stationery for office use
- B.
Assets for the factory
- C.
Goods of resale
- D.
Investment
Correct Answer
C. Goods of resaleExplanation
The term "purchases" typically refers to the act of buying goods or products that are intended to be resold. This can include inventory or stock that a business acquires in order to sell to customers. It is distinct from buying assets for the factory, which would be related to acquiring equipment or resources for production purposes. Similarly, purchasing stationery for office use would be categorized as office supplies rather than goods for resale. Finally, investment refers to the allocation of funds or resources with the expectation of generating a return or profit, which is not directly related to the concept of purchases.Rate this question:
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- 9.
Closing stock is valued at lower of cost or realisable value . which principle of accounting is applied here?
- A.
Matching Concept
- B.
Full disclosure
- C.
Principle of conservatism
- D.
Consistency concept
Correct Answer
C. Principle of conservatismExplanation
The principle of conservatism is applied here because it states that when there are uncertainties in accounting, the option that is less likely to overstate assets or income should be chosen. Valuing the closing stock at the lower of cost or realizable value is a conservative approach as it ensures that the value of the stock is not overstated and reflects a more cautious estimate of its worth.Rate this question:
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- 10.
Journal is book of prime Entry
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
A journal is a book of prime entry because it is used to record the initial transactions of a business. It serves as a chronological record of all financial transactions, including both debit and credit entries. The journal is the first step in the accounting process and provides a detailed and organized record of all transactions before they are posted to the general ledger. It helps in maintaining accurate and complete financial records and is an essential tool for preparing financial statements and analyzing business performance. Therefore, the statement that a journal is a book of prime entry is true.Rate this question:
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- 11.
Mr. Dinesh who owed us Rs. 50,000 became insolvent and paid only 40% of this amount. What is term used for the amount not received?
Correct Answer
Bad debts , baddebts, bad debtsExplanation
The term used for the amount not received is "bad debts". This refers to the portion of the debt that is deemed uncollectible and is therefore written off as a loss by the creditor. In this case, since Mr. Dinesh only paid 40% of the owed amount, the remaining 60% would be considered as bad debts.Rate this question:
- 12.
Anita is going to temple, what type of activity is this?
Correct Answer
Non-economic activity, noneconomic, noneconomicactivityExplanation
Anita going to the temple is considered a non-economic activity because it does not involve any financial transactions or the production of goods and services for the purpose of earning money. Going to the temple is a religious or spiritual activity that is undertaken for personal or cultural reasons, rather than for economic gain.Rate this question:
- 13.
“Profit maximization can’t be the sole objectives of a business.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Profit maximization cannot be the sole objective of a business because there are other important factors to consider. A business should also focus on creating value for customers, maintaining good relationships with stakeholders, and contributing to the overall well-being of society. By solely focusing on profit maximization, a business may neglect these other important aspects, which can ultimately lead to negative consequences such as a loss of customer trust and reputation damage. Therefore, it is important for a business to have a broader set of objectives that go beyond just maximizing profits.Rate this question:
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- 14.
What is the minimum number of persons required to form a co-operative society ?
Correct Answer
10Explanation
A co-operative society is a legal entity that requires a minimum number of members to be formed. In this case, the correct answer of 10 suggests that a minimum of 10 persons is required to form a co-operative society. This is because a co-operative society needs a sufficient number of individuals to come together and collectively work towards a common goal, pooling their resources and efforts. With fewer than 10 members, it may be difficult to effectively operate and sustain a co-operative society.Rate this question:
- 15.
Who are called the owners of the company?
Correct Answer
ShareholdersExplanation
Shareholders are called the owners of the company because they own shares or stocks in the company. By purchasing these shares, individuals become partial owners of the company and have certain rights and privileges, such as voting rights and the ability to receive dividends. Shareholders also have the potential to profit from the company's success through the increase in the value of their shares. Therefore, shareholders are considered the owners of the company as they hold a stake in its ownership and have a financial interest in its performance.Rate this question:
- 16.
What is the nature of liability of an active partner ?
Correct Answer
UnlimitedExplanation
The nature of liability of an active partner is unlimited. This means that the active partner is personally liable for all the debts and obligations of the partnership. In the event that the partnership cannot fulfill its financial obligations, the active partner's personal assets can be used to satisfy those debts. This is in contrast to a limited partner, who has limited liability and is only liable for the amount they have invested in the partnership.Rate this question:
- 17.
Occupation in which people work for other and get remunerated in return is known as ……………?
Correct Answer
Employment, employmentExplanation
Employment refers to the occupation in which individuals work for others and receive payment in return. It involves a contractual agreement between the employer and the employee, where the employee provides their skills and services in exchange for wages or salary. Employment can be in various sectors such as government, private companies, non-profit organizations, etc. It is a fundamental aspect of the economy, contributing to the overall growth and development of a country.Rate this question:
- 18.
Which of the following is not a tangible asset ?
- A.
Motor Car
- B.
Goodwill
- C.
Stock
- D.
Building
Correct Answer
B. GoodwillExplanation
Goodwill is not a tangible asset because it is an intangible asset that represents the reputation, brand value, and customer loyalty of a business. Unlike tangible assets such as motor cars, stock, and buildings, which have a physical existence and can be touched or seen, goodwill cannot be physically measured or seen. It is derived from factors such as customer satisfaction, brand recognition, and employee morale, which contribute to the overall value of a business but cannot be physically quantified.Rate this question:
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- 19.
Arun is a Book-seller, which item will be goods for his business ?
- A.
Purchase of Computer
- B.
Purchase of Fan
- C.
Purchase of Furniture
- D.
Purchase of Stationery
Correct Answer
D. Purchase of StationeryExplanation
The purchase of stationery would be good for Arun's book-selling business because it is directly related to the products he sells. Stationery items such as notebooks, pens, and markers are commonly used by customers when reading or studying books. By offering stationery items alongside his books, Arun can attract more customers and increase his sales. Additionally, stationery items are relatively inexpensive and have a high turnover rate, making them a profitable addition to his business.Rate this question:
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- 20.
Transfer of interest exists in the case of
- A.
Profession
- B.
Employment
- C.
Business
- D.
None of these
Correct Answer
C. BusinessExplanation
Transfer of interest exists in the case of business. In a business, ownership interests can be transferred from one person to another through various means such as selling shares, assigning partnership interests, or transferring ownership rights. This allows for the transfer of control and financial benefits associated with the business. In contrast, in a profession or employment, there may be limited or no transferability of interests as individuals typically do not have ownership rights in the same way as in a business.Rate this question:
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- 21.
Identify the activity which does not support trade?
- A.
Banking
- B.
Warehousing
- C.
Insurance
- D.
Mining
Correct Answer
D. MiningExplanation
Mining does not support trade because it involves extracting natural resources from the earth, rather than engaging in the buying and selling of goods and services. While mining may contribute to the production of raw materials that can be used in trade, the activity itself does not directly involve the exchange of goods or services between buyers and sellers.Rate this question:
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- 22.
A short explanation of each transaction which is written below each entry is called
Correct Answer
Narration, narrationExplanation
In accounting, a narration is a brief description or explanation of a transaction that is written below each entry in the books of accounts. It helps in providing additional information about the nature or purpose of the transaction, making it easier to understand and interpret the entries. In this case, the correct answer is "narration, narration" because it suggests that there is a narration written for each entry in the transaction.Rate this question:
- 23.
The entry in which more than one accounts are debited or credited is called
Correct Answer
compound entry, compound, CompoundExplanation
A compound entry refers to a single entry in the accounting records that involves multiple accounts being either debited or credited. This type of entry is used when there is a need to record multiple transactions simultaneously. By combining these transactions into a single entry, it simplifies the accounting process and ensures accuracy in the financial statements. The terms "compound entry," "compound," and "Compound" all refer to the same concept of recording multiple accounts in a single entry.Rate this question:
- 24.
The process of recording business transaction in journal is called
Correct Answer
Journalizing, journalizing , journalisingExplanation
The process of recording business transactions in a journal is referred to as journalizing. This involves entering the details of each transaction, including the date, description, and amounts, in the appropriate journal accounts. The terms "journalizing," "journalizing," and "journalising" all refer to the same process of recording transactions in a journal.Rate this question:
- 25.
Why should business earn profit
- A.
To provide return to Investors
- B.
To provide funds for future Growth
- C.
To increase reputation of the Business
- D.
All the above
Correct Answer
D. All the aboveExplanation
Businesses should earn a profit for multiple reasons. Firstly, it allows them to provide a return to investors who have invested their money in the business. This is important to attract and retain investors, ensuring the business has access to necessary capital. Secondly, earning a profit provides funds for future growth and expansion, allowing the business to invest in new projects, research, development, and innovation. Lastly, a profitable business tends to have a positive reputation, attracting more customers, partners, and employees, ultimately leading to further growth and success.Rate this question:
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Current Version
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Jan 18, 2023Quiz Edited by
ProProfs Editorial Team -
Jul 25, 2020Quiz Created by
Sudha Ayyappadas
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