Introduction to accounting Test

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Introduction to accounting Test - 24

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Question 1
1 / -0

The process of grouping transactions or entries of the same type at one place is known as _____________.

A
Classifying

B
Recording

C
Summarizing

D
Numberring

Solution

Classification is a process of grouping the entries of the same type at one place. Like classifying the account of individual parties in to the group of debtors and creditors. Another example of classifying the expense as direct and indirect expense.
Question 2
1 / -0

_____________ is a deduction from the list or catalogue price allowed by the wholesalers to the retailers for various reasons.

A
Trade discount

B
Special discount

C
Cash discount

D
None of the above

Solution

Discount are of two kinds: Trade discount and cash discount.

Trade discount is allowed to promote the sales and given as a general practice.
Trade discount is allowed on the list price or catalogue price.
Trade discount is not recorded in books of account.
Net price i.e. List price minus trade discount is considered as sale value.
Question 3
1 / -0

Which of the following is/are attribute/s of accounting?

A
Accounting is social science.

B
It involves recording, classifying and summarizing.

C
It records transaction of qualitative nature

D
All of the above

Solution

The definition of accounting signifies " it is an art of recording , classifying, summarizing and interpreting in a significant manner and in terms of money, transactions and events which are, in part at least of a financial character and interpreting the result thereof.
Question 4
1 / -0

Accounting is :
1. An art
2. A science
Select the correct answer from the options given below ___________.

A
1 only

B
2 only

C
Partly 1 and Partly 2

D
2 but not 1

Solution

Bookkeeping is known as both art and science.
It is called art because it requires creativity, judgment and skills to record the transactions.
It is also considered as science because it is a systematic body of knowledge.
Question 5
1 / -0

Systematically writing down the transactions and events in account books soon after their occurrence is known as _________.

A
classifying

B
recording

C
summarizing

D
numbering

Solution

The recording is a function of bookkeeping.
All the business transaction which are of monetary value need to be recorded in the books of account in a chronological manner soon after its occurrence.
Generally, these transactions are recorded in the journal or subsidiary books
Question 6
1 / -0

Accounting involves -
(I) Recording
(II) Classifying
(III) Summarizing
Select the correct answer from the options given below.

A
(I)

B
(I) & (III)

C
(I) & (II)

D
All of the above

Solution

Definition of accounting says that " accounting is an art of recording, classifying and summarizing the business transactions which are of monetary nature."
Hence Accounting involves:
Recording of all monetary transactions
Classifying the transactions
Summarizing the transactions
Question 7
1 / -0

Which of the following is/are not the branch of accounting?

A
Cost Accounting

B
Financial Accounting

C
Human Resources Accounting

D
All of the above

Solution

There are various branches of accounting:
Financial Accounting: This branch deal with the recording of all business transactions , classifying, summarizing and interpreting the financial data to provide the logical information to the management in the form of financial statement.
Cost Accounting: It seeks to ascertain the cost of each product or job produced or undertaken by the business.
Management Accounting: It has the objective of collecting systematically and regularly all such information as will help the management in discharging functions in managerial decision making.
Human Resource Accounting is not a branch of accounting.
Question 8
1 / -0

Which of the following is the branch of accounting?
(I) Human Resources Accounting
(II) Social Accounting
(III) Security Accounting
The correct answer is-

A
(I) & (II)

B
(II) & (III)

C
(I) & (III)

D
None of the above

Solution

Accounting has following branches:
1) Financial Accounting
2) Management Accounting
3) Cost Accounting

Human Resource Accounting/Social Accounting/Security Accounting are not the branch of accounting.
Question 9
1 / -0

Regulatory Agencies interested as users of accounting information includes __________.

A
Various Government departments

B
Agencies such as Company Law Board (CLB)

C
Registrar of Companies (ROC)

D
All of the above

Solution

There are various agencies or stake holders interested to know about the accounting information. These stakeholders may be internal and external.
Accounts are prepared by the organization by following the compliance of various acts. Various agencies are interested to know about the accounts to ensure that organization is following the various laws applicable.
These regulatory agencies may includes Income Tax Authorities, Company Law Board, Registrar of Companies, SEBI, RBI etc.
Question 10
1 / -0

Which of the following is/are characteristics of accounting information?

A
Understandability

B
Timeliness

C
Completeness

D
All of the above

Solution

There are mainly 4 characteristics of the accounting information
1. Understandability: Information should be simple so, that users interpret it in the same sense.
2. Reliability: It means that information should be Verifiable, neutral and faithful.
3. Relevance: It includes timelines, Feedback value and dedicative.
4. Comparability: It includes that information should be of common period and use common unit of measurement and format of reporting.

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Introduction to accounting Test - 24

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Introduction to accounting Test - 24

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SHARING IS CARING

Question 1

Classifying

Recording

Summarizing

Numberring

Solution

Question 2

Trade discount

Special discount

Cash discount

None of the above

Solution

Question 3

Accounting is social science.

It involves recording, classifying and summarizing.

It records transaction of qualitative nature

All of the above

Solution

Question 4

1 only

2 only

Partly 1 and Partly 2

2 but not 1

Solution

Question 5

classifying

recording

summarizing

numbering

Solution

Question 6

(I)

(I) & (III)

(I) & (II)

All of the above

Solution

Question 7

Cost Accounting

Financial Accounting

Human Resources Accounting

All of the above

Solution

Question 8

(I) & (II)

(II) & (III)

(I) & (III)

None of the above

Solution

Question 9

Various Government departments

Agencies such as Company Law Board (CLB)

Registrar of Companies (ROC)

All of the above

Solution

Question 10

Understandability

Timeliness

Completeness

All of the above

Solution

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