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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your Class 11 knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
X started a businesss on 1st April , 2018 witha capitalof ₹50,000 anda loanof ₹25,000 takenfrom Y. During2018-19, hehad introduced additional capital ₹25,000 andhad withdrawn15,000 for personal use. On 31st March , 2019 his assets were ₹1,50,000. Findhis capital as on 31st March, 2019 and profitmadeor lossincurred duringtheyear 2018-19. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :ClosingCapital = Closing <a href="https://interviewquestions.tuteehub.com/tag/assets-885948" style="font-weight:bold;" target="_blank" title="Click to know more about ASSETS">ASSETS</a> - Closing Liailities(i.e., y's <a href="https://interviewquestions.tuteehub.com/tag/loan-1076737" style="font-weight:bold;" target="_blank" title="Click to know more about LOAN">LOAN</a>) <br/>= ₹ 1,50,000 - ₹25,000 - ₹1,25,000. <br/>Profits = closingCapital+ Darwing- Additional Capital- OpeningCapital <br/>= ₹ 1,25,000 + ₹15,000 - ₹ 25,000 - ₹ 50,000 = ₹65,000.</body></html> | |
| 2. |
X started a businesss on 1st April , 2018 witha capitalof ₹50,000 anda loanof ₹25,000 takenfrom Y. During2018-19, hehad introduced additional capital ₹25,000 andhad withdrawn15,000 for personal use. On 31st March , 2019 his assets were ₹1,50,000. Findhis capital as on 31st March, 2019 and profitmadeor lossincurred duringtheyear 2018-19. |
| Answer» <html><body><p></p>Solution :ClosingCapital = <a href="https://interviewquestions.tuteehub.com/tag/closing-919708" style="font-weight:bold;" target="_blank" title="Click to know more about CLOSING">CLOSING</a> Assets - Closing Liailities(i.e., y's <a href="https://interviewquestions.tuteehub.com/tag/loan-1076737" style="font-weight:bold;" target="_blank" title="Click to know more about LOAN">LOAN</a>) <br/>= ₹ 1,50,000 - ₹25,000 - ₹1,25,000. <br/>Profits = closingCapital+ Darwing- <a href="https://interviewquestions.tuteehub.com/tag/additional-367648" style="font-weight:bold;" target="_blank" title="Click to know more about ADDITIONAL">ADDITIONAL</a> <a href="https://interviewquestions.tuteehub.com/tag/capital-908677" style="font-weight:bold;" target="_blank" title="Click to know more about CAPITAL">CAPITAL</a>- OpeningCapital <br/>= ₹ 1,25,000 + ₹15,000 - ₹ 25,000 - ₹ 50,000 = ₹65,000.</body></html> | |
| 3. |
X Ltd. Gets a contract of ₹ 100 crore to build a Shopping-Mal to be completed in 3 years. The management of the company wants to ascertain profit or loss on this contract only when the contract is completed. Is the management justified? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :No, the <a href="https://interviewquestions.tuteehub.com/tag/management-1085657" style="font-weight:bold;" target="_blank" title="Click to know more about MANAGEMENT">MANAGEMENT</a> is not justified. <a href="https://interviewquestions.tuteehub.com/tag/although-7380138" style="font-weight:bold;" target="_blank" title="Click to know more about ALTHOUGH">ALTHOUGH</a> the true profit or loss can be ascertained only after the completion of the contract, it will be divided into time intervals of twelve months for the ascertainment of profit as <a href="https://interviewquestions.tuteehub.com/tag/per-590802" style="font-weight:bold;" target="_blank" title="Click to know more about PER">PER</a> <a href="https://interviewquestions.tuteehub.com/tag/accounting-637" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNTING">ACCOUNTING</a> Period Concept.</body></html> | |
| 4. |
X Ltd. Follows the Written Down Value Method of depreciating machinery year after year due to |
| Answer» <html><body><p>comparability<br/>convenience<br/><a href="https://interviewquestions.tuteehub.com/tag/consistency-930013" style="font-weight:bold;" target="_blank" title="Click to know more about CONSISTENCY">CONSISTENCY</a><br/>All of these</p>Solution :consistency</body></html> | |
| 5. |
X Ltd . Follows the Written Down value Method of depreciating machinery year after year due to |
| Answer» <html><body><p>comparability.<br/>convenience.<br/><a href="https://interviewquestions.tuteehub.com/tag/consistency-930013" style="font-weight:bold;" target="_blank" title="Click to know more about CONSISTENCY">CONSISTENCY</a>.<br/>All of these.</p>Solution :consistency.</body></html> | |
| 6. |
X hasfollowingassetsand liabilities as on 31st March, 2019. Determinehis capital. Cash ₹25,000,Bank₹ 47,500, Debtors ₹ 18,000, Creditors ₹ 22,000, Pant and Machiney ₹ 80,000, Buliding₹2,00,000, Furniture ₹ 24,000, Bills Receivable₹ 56,500, Bills Payable ₹23,500. |
| Answer» <html><body><p></p>Solution :Assest = <a href="https://interviewquestions.tuteehub.com/tag/liabilities-1072887" style="font-weight:bold;" target="_blank" title="Click to know more about LIABILITIES">LIABILITIES</a> + Capital<br/> OrCapital = Asseste- Liabilities<br/> OrCapital = (Cash + Bank + Debtors + <a href="https://interviewquestions.tuteehub.com/tag/plants-601210" style="font-weight:bold;" target="_blank" title="Click to know more about PLANTS">PLANTS</a> and Machinery + Buliding + Furniture + Bills Receivable ) - (<a href="https://interviewquestions.tuteehub.com/tag/creditors-938665" style="font-weight:bold;" target="_blank" title="Click to know more about CREDITORS">CREDITORS</a> + Bills Payable) <br/>= ₹(25,000 + <a href="https://interviewquestions.tuteehub.com/tag/47-317855" style="font-weight:bold;" target="_blank" title="Click to know more about 47">47</a>, <a href="https://interviewquestions.tuteehub.com/tag/500-323288" style="font-weight:bold;" target="_blank" title="Click to know more about 500">500</a> + 18,000+ 80,000 + 2,00,000 + 24,000+ 56,500)- ₹(22,000 + 23,500) <br/>=₹ (4,51,000 - 45,500 ) = ₹4,05,000.</body></html> | |
| 7. |
X hasfollowingassetsand liabilities as on 31st March, 2019. Determinehis capital. Cash ₹25,000,Bank₹ 47,500, Debtors ₹ 18,000, Creditors ₹ 22,000, Pant and Machiney ₹ 80,000, Buliding₹2,00,000, Furniture ₹ 24,000, Bills Receivable₹ 56,500, Bills Payable ₹23,500. |
| Answer» <html><body><p></p>Solution :Assest = Liabilities + Capital<br/> OrCapital = Asseste- Liabilities<br/> OrCapital = (<a href="https://interviewquestions.tuteehub.com/tag/cash-910172" style="font-weight:bold;" target="_blank" title="Click to know more about CASH">CASH</a> + Bank + Debtors + <a href="https://interviewquestions.tuteehub.com/tag/plants-601210" style="font-weight:bold;" target="_blank" title="Click to know more about PLANTS">PLANTS</a> and Machinery + Buliding + <a href="https://interviewquestions.tuteehub.com/tag/furniture-1002510" style="font-weight:bold;" target="_blank" title="Click to know more about FURNITURE">FURNITURE</a> + Bills Receivable ) - (<a href="https://interviewquestions.tuteehub.com/tag/creditors-938665" style="font-weight:bold;" target="_blank" title="Click to know more about CREDITORS">CREDITORS</a> + Bills Payable) <br/>= ₹(25,000 + 47, 500 + 18,000+ 80,000 + 2,00,000 + 24,000+ 56,500)- ₹(22,000 + 23,500) <br/>=₹ (4,51,000 - 45,500 ) = ₹4,05,000.</body></html> | |
| 8. |
X' commenced business on 1st April, 2013 with a capital of 6,00,000. On 31st March, 2014 his assets were worth 8,00,000 and liabilities 50,000. Find out his closing capital. |
| Answer» <html><body><p>₹7,50,000.<br/>₹ 5,50,000.<br/>₹2,00,000.<br/> <a href="https://interviewquestions.tuteehub.com/tag/none-580659" style="font-weight:bold;" target="_blank" title="Click to know more about NONE">NONE</a> of these.</p>Solution :₹7,50,000.</body></html> | |
| 9. |
Write two adventages of accrual basis of accounting. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :(i) It discloses true profit or <a href="https://interviewquestions.tuteehub.com/tag/loss-1079380" style="font-weight:bold;" target="_blank" title="Click to know more about LOSS">LOSS</a> for a particular <a href="https://interviewquestions.tuteehub.com/tag/period-1151023" style="font-weight:bold;" target="_blank" title="Click to know more about PERIOD">PERIOD</a>. <br/> (<a href="https://interviewquestions.tuteehub.com/tag/ii-1036832" style="font-weight:bold;" target="_blank" title="Click to know more about II">II</a>) It follows the <a href="https://interviewquestions.tuteehub.com/tag/matching-11928" style="font-weight:bold;" target="_blank" title="Click to know more about MATCHING">MATCHING</a> principle of accounting.</body></html> | |
| 10. |
Write the following transactions in Debtor's Account , Creditor's Account and Cash Account : {:(,,,"₹"),(1., "Cash sales" ,, 50","000), (3., "Cash received from X" ,, 56","000), (5.,"Paid to Y" ,, 30","000):}:| {:(,,,"₹") , (2., "Sold goods to X on credit" ,, 80","000), (4., "Purchase goods from Y on credit" ,, 44","000), (6., "Cash purchases from Y" ,, 16","000):} |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :<img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/TSG_ACC_XI_C06_S01_009_S01.png" width="80%"/></body></html> | |
| 11. |
writethreedisadvantagesof AIS? |
| Answer» | |
| 12. |
Writethreeadvantages if AIS. |
| Answer» | |
| 13. |
writeshortnotes on thefollowing: (a)CustomisedAcoountingSoftware (b)Reafymade AccountingSoftware . |
| Answer» | |
| 14. |
Write one limitation of accounting. |
| Answer» <html><body><p></p>Solution :Based on Historical costs : Accounts are prepared on the basis of historical costs (i.e., the <a href="https://interviewquestions.tuteehub.com/tag/original-1139424" style="font-weight:bold;" target="_blank" title="Click to know more about ORIGINAL">ORIGINAL</a> costs) and as such the <a href="https://interviewquestions.tuteehub.com/tag/figures-987769" style="font-weight:bold;" target="_blank" title="Click to know more about FIGURES">FIGURES</a> given in the financial <a href="https://interviewquestions.tuteehub.com/tag/statements-17642" style="font-weight:bold;" target="_blank" title="Click to know more about STATEMENTS">STATEMENTS</a> do not shows the <a href="https://interviewquestions.tuteehub.com/tag/effect-966056" style="font-weight:bold;" target="_blank" title="Click to know more about EFFECT">EFFECT</a> of <a href="https://interviewquestions.tuteehub.com/tag/changes-913881" style="font-weight:bold;" target="_blank" title="Click to know more about CHANGES">CHANGES</a> in price level.</body></html> | |
| 15. |
writedownfiveadvantagesof computerisedAccountingsystem overthemanualsystemof Accounting . |
| Answer» | |
| 16. |
Write one difference between Cash Account and Cash Book. |
| Answer» <html><body><p></p>Solution :<a href="https://interviewquestions.tuteehub.com/tag/cash-910172" style="font-weight:bold;" target="_blank" title="Click to know more about CASH">CASH</a> <a href="https://interviewquestions.tuteehub.com/tag/account-25640" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNT">ACCOUNT</a> is an account in the <a href="https://interviewquestions.tuteehub.com/tag/ledger-1070861" style="font-weight:bold;" target="_blank" title="Click to know more about LEDGER">LEDGER</a> whereas Cash <a href="https://interviewquestions.tuteehub.com/tag/book-900767" style="font-weight:bold;" target="_blank" title="Click to know more about BOOK">BOOK</a> is a <a href="https://interviewquestions.tuteehub.com/tag/separate-1201161" style="font-weight:bold;" target="_blank" title="Click to know more about SEPARATE">SEPARATE</a> book .</body></html> | |
| 17. |
writea detailedcomparisonbetweenManualacountingandcomputerisedAccounting . |
| Answer» | |
| 18. |
Withdrawal of money by the owner is not an expense but a reduction of ______ and_______. |
| Answer» <html><body><p><br/></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :<a href="https://interviewquestions.tuteehub.com/tag/cash-910172" style="font-weight:bold;" target="_blank" title="Click to know more about CASH">CASH</a>: <a href="https://interviewquestions.tuteehub.com/tag/capital-908677" style="font-weight:bold;" target="_blank" title="Click to know more about CAPITAL">CAPITAL</a></body></html> | |
| 19. |
Withdrawal of goods from business by the proprietor is credited to |
| Answer» <html><body><p><a href="https://interviewquestions.tuteehub.com/tag/drawing-959485" style="font-weight:bold;" target="_blank" title="Click to know more about DRAWING">DRAWING</a> A/c<br/>Capital A/c<br/><a href="https://interviewquestions.tuteehub.com/tag/purchase-1172709" style="font-weight:bold;" target="_blank" title="Click to know more about PURCHASE">PURCHASE</a> A/c<br/>None of these</p>Solution :Purchase A/c</body></html> | |
| 20. |
Withdrawal of cash from business by the proprietor is credited to Drawing Account. |
| Answer» <html><body><p><br/></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> : <a href="https://interviewquestions.tuteehub.com/tag/false-459184" style="font-weight:bold;" target="_blank" title="Click to know more about FALSE">FALSE</a></body></html> | |
| 21. |
Withdrawalcolumn of the Pass Book showed a wrong entry of ₹1,200 . When the balance as per Cash Book is the starting point |
| Answer» <html><body><p>₹ 1,200 to be added.<br/>₹ 1,200 to be <a href="https://interviewquestions.tuteehub.com/tag/subtracted-2258353" style="font-weight:bold;" target="_blank" title="Click to know more about SUBTRACTED">SUBTRACTED</a>. <br/>No <a href="https://interviewquestions.tuteehub.com/tag/adjustment-18695" style="font-weight:bold;" target="_blank" title="Click to know more about ADJUSTMENT">ADJUSTMENT</a> is <a href="https://interviewquestions.tuteehub.com/tag/required-1185621" style="font-weight:bold;" target="_blank" title="Click to know more about REQUIRED">REQUIRED</a>. <br/><a href="https://interviewquestions.tuteehub.com/tag/none-580659" style="font-weight:bold;" target="_blank" title="Click to know more about NONE">NONE</a> of these </p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :₹ 1,200 to be subtracted.</body></html> | |
| 22. |
Withdrawal of cash from business by the proprietor is credited to |
| Answer» <html><body><p><a href="https://interviewquestions.tuteehub.com/tag/drawings-959513" style="font-weight:bold;" target="_blank" title="Click to know more about DRAWINGS">DRAWINGS</a> A/c <br/><a href="https://interviewquestions.tuteehub.com/tag/capital-908677" style="font-weight:bold;" target="_blank" title="Click to know more about CAPITAL">CAPITAL</a> A/c <br/><a href="https://interviewquestions.tuteehub.com/tag/cash-910172" style="font-weight:bold;" target="_blank" title="Click to know more about CASH">CASH</a> A/c <br/><a href="https://interviewquestions.tuteehub.com/tag/profit-1168589" style="font-weight:bold;" target="_blank" title="Click to know more about PROFIT">PROFIT</a> and <a href="https://interviewquestions.tuteehub.com/tag/loss-1079380" style="font-weight:bold;" target="_blank" title="Click to know more about LOSS">LOSS</a> A/c</p>Solution :Cash A/c</body></html> | |
| 23. |
Will you transfer 'Wages and Salaries Account' to the debit of Profit and Loss Account? Why |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :No. <a href="https://interviewquestions.tuteehub.com/tag/wages-1448569" style="font-weight:bold;" target="_blank" title="Click to know more about WAGES">WAGES</a> and <a href="https://interviewquestions.tuteehub.com/tag/salaries-1193459" style="font-weight:bold;" target="_blank" title="Click to know more about SALARIES">SALARIES</a> <a href="https://interviewquestions.tuteehub.com/tag/account-25640" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNT">ACCOUNT</a> will be transferred to Trading Account because it is assumed that when Wages and Salaries Account is given, it <a href="https://interviewquestions.tuteehub.com/tag/relates-1183217" style="font-weight:bold;" target="_blank" title="Click to know more about RELATES">RELATES</a> to wages.</body></html> | |
| 24. |
Why the statement of assets and liabilities prepared under Single Entry System at the end of the accounting period is called a Statement of Affairs instead of Balance Sheet? |
| Answer» <html><body><p></p>Solution :<a href="https://interviewquestions.tuteehub.com/tag/although-7380138" style="font-weight:bold;" target="_blank" title="Click to know more about ALTHOUGH">ALTHOUGH</a> Statement of <a href="https://interviewquestions.tuteehub.com/tag/affairs-851191" style="font-weight:bold;" target="_blank" title="Click to know more about AFFAIRS">AFFAIRS</a>, like Balance <a href="https://interviewquestions.tuteehub.com/tag/sheet-641829" style="font-weight:bold;" target="_blank" title="Click to know more about SHEET">SHEET</a>, shows assets and liabilities yet it is not a Balance Sheet. It is so because the values of the assets and liabilities, <a href="https://interviewquestions.tuteehub.com/tag/shown-1206565" style="font-weight:bold;" target="_blank" title="Click to know more about SHOWN">SHOWN</a> in the Statement of Affairs are <a href="https://interviewquestions.tuteehub.com/tag/merely-7377077" style="font-weight:bold;" target="_blank" title="Click to know more about MERELY">MERELY</a> the result of estimates made by the owner and no Ledger Accounts exist for them. Since, these amounts are not drawn from the accounts, they cannot strictly be called balances and their depiction as liabilities and assets in a Balance Sheet.</body></html> | |
| 25. |
Why the full cost of an asset is not treated as an expense in the year of its purchase? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :Because of going concern concept, it is assumed that the business will continue to <a href="https://interviewquestions.tuteehub.com/tag/exist-979486" style="font-weight:bold;" target="_blank" title="Click to know more about EXIST">EXIST</a> for a <a href="https://interviewquestions.tuteehub.com/tag/long-537592" style="font-weight:bold;" target="_blank" title="Click to know more about LONG">LONG</a> period in the future. Hence, the <a href="https://interviewquestions.tuteehub.com/tag/cost-25707" style="font-weight:bold;" target="_blank" title="Click to know more about COST">COST</a> of the asset is spread over its <a href="https://interviewquestions.tuteehub.com/tag/useful-1441152" style="font-weight:bold;" target="_blank" title="Click to know more about USEFUL">USEFUL</a> life only the current years depreciation is treated as expense.</body></html> | |
| 26. |
Why transactions are first recorded in a Journal? |
| Answer» <html><body><p></p>Solution :Journalbeing Book of Original <a href="https://interviewquestions.tuteehub.com/tag/entry-972873" style="font-weight:bold;" target="_blank" title="Click to know more about ENTRY">ENTRY</a> contains all the important <a href="https://interviewquestions.tuteehub.com/tag/information-1043838" style="font-weight:bold;" target="_blank" title="Click to know more about INFORMATION">INFORMATION</a> relating to a <a href="https://interviewquestions.tuteehub.com/tag/transactions-18175" style="font-weight:bold;" target="_blank" title="Click to know more about TRANSACTIONS">TRANSACTIONS</a> in a chronological <a href="https://interviewquestions.tuteehub.com/tag/order-1138220" style="font-weight:bold;" target="_blank" title="Click to know more about ORDER">ORDER</a>.</body></html> | |
| 27. |
Why the entire life of the business enterprise is divided into time-intervals? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :<a href="https://interviewquestions.tuteehub.com/tag/entire-972365" style="font-weight:bold;" target="_blank" title="Click to know more about ENTIRE">ENTIRE</a> life of the business enterprise is divided into same intervals of <a href="https://interviewquestions.tuteehub.com/tag/twelve-662432" style="font-weight:bold;" target="_blank" title="Click to know more about TWELVE">TWELVE</a> <a href="https://interviewquestions.tuteehub.com/tag/months-1101351" style="font-weight:bold;" target="_blank" title="Click to know more about MONTHS">MONTHS</a> for the <a href="https://interviewquestions.tuteehub.com/tag/ascertainment-885504" style="font-weight:bold;" target="_blank" title="Click to know more about ASCERTAINMENT">ASCERTAINMENT</a> of profit.</body></html> | |
| 28. |
Why the entire life of business is divided into time intervals? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :To ascertain the <a href="https://interviewquestions.tuteehub.com/tag/amount-374803" style="font-weight:bold;" target="_blank" title="Click to know more about AMOUNT">AMOUNT</a> of profit earned or loss <a href="https://interviewquestions.tuteehub.com/tag/suffered-7327990" style="font-weight:bold;" target="_blank" title="Click to know more about SUFFERED">SUFFERED</a> by the <a href="https://interviewquestions.tuteehub.com/tag/business-21797" style="font-weight:bold;" target="_blank" title="Click to know more about BUSINESS">BUSINESS</a>.</body></html> | |
| 29. |
Why should a business follow the consistency principle? |
| Answer» <html><body><p></p>Solution :Comparability is a qualitative charaxteristic of a financial statement , i.e., the finacial performance of a year may be compared with that of another year . It is <a href="https://interviewquestions.tuteehub.com/tag/possible-592355" style="font-weight:bold;" target="_blank" title="Click to know more about POSSIBLE">POSSIBLE</a> only when <a href="https://interviewquestions.tuteehub.com/tag/accounting-637" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNTING">ACCOUNTING</a> practices are consistently <a href="https://interviewquestions.tuteehub.com/tag/followed-2079285" style="font-weight:bold;" target="_blank" title="Click to know more about FOLLOWED">FOLLOWED</a>.</body></html> | |
| 30. |
Why should a business follow the consistency Concept? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :One of the <a href="https://interviewquestions.tuteehub.com/tag/qualitative-611024" style="font-weight:bold;" target="_blank" title="Click to know more about QUALITATIVE">QUALITATIVE</a> <a href="https://interviewquestions.tuteehub.com/tag/characteristic-914243" style="font-weight:bold;" target="_blank" title="Click to know more about CHARACTERISTIC">CHARACTERISTIC</a> of accounting information is comparability i.e., the financial statements must be comparable from <a href="https://interviewquestions.tuteehub.com/tag/year-1464599" style="font-weight:bold;" target="_blank" title="Click to know more about YEAR">YEAR</a> to year. It is possible only when accounting principles are not changed and followed consistenly year after year.</body></html> | |
| 31. |
Why receipts are classified into capital and revenue? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :Classification of <a href="https://interviewquestions.tuteehub.com/tag/receipts-1179271" style="font-weight:bold;" target="_blank" title="Click to know more about RECEIPTS">RECEIPTS</a> into capital receipts and revenue receipts is essential for thepreparation of financial statementssince revenue receipts are shown on the <a href="https://interviewquestions.tuteehub.com/tag/credit-938523" style="font-weight:bold;" target="_blank" title="Click to know more about CREDIT">CREDIT</a> <a href="https://interviewquestions.tuteehub.com/tag/side-1206832" style="font-weight:bold;" target="_blank" title="Click to know more about SIDE">SIDE</a> of Trading and <a href="https://interviewquestions.tuteehub.com/tag/profit-1168589" style="font-weight:bold;" target="_blank" title="Click to know more about PROFIT">PROFIT</a> and Loss Account whereas capital receiptsare shown in the Balance Sheet.</body></html> | |
| 32. |
Why Provision of Outstanding Expenses is required ? |
| Answer» <html><body><p></p>Solution :Outstanding Expenses are provided <a href="https://interviewquestions.tuteehub.com/tag/following-463335" style="font-weight:bold;" target="_blank" title="Click to know more about FOLLOWING">FOLLOWING</a> the <a href="https://interviewquestions.tuteehub.com/tag/accrual-847173" style="font-weight:bold;" target="_blank" title="Click to know more about ACCRUAL">ACCRUAL</a> <a href="https://interviewquestions.tuteehub.com/tag/concept-928138" style="font-weight:bold;" target="_blank" title="Click to know more about CONCEPT">CONCEPT</a> of <a href="https://interviewquestions.tuteehub.com/tag/accounting-637" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNTING">ACCOUNTING</a>, i.e., expenses for the year, whether paid or not, should be accounted.</body></html> | |
| 33. |
Why is Trading Account prepared ? Or What do we come to know by preparing the Trading Account? |
| Answer» <html><body><p></p>Solution :<a href="https://interviewquestions.tuteehub.com/tag/trading-1424689" style="font-weight:bold;" target="_blank" title="Click to know more about TRADING">TRADING</a> <a href="https://interviewquestions.tuteehub.com/tag/account-25640" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNT">ACCOUNT</a> is <a href="https://interviewquestions.tuteehub.com/tag/prepared-1163605" style="font-weight:bold;" target="_blank" title="Click to know more about PREPARED">PREPARED</a> to know by prepared to know gross profit or gross <a href="https://interviewquestions.tuteehub.com/tag/loss-1079380" style="font-weight:bold;" target="_blank" title="Click to know more about LOSS">LOSS</a> during the accounting <a href="https://interviewquestions.tuteehub.com/tag/year-1464599" style="font-weight:bold;" target="_blank" title="Click to know more about YEAR">YEAR</a></body></html> | |
| 34. |
Why is the Ledger called the book of Final entry? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :The Ledger is called the <a href="https://interviewquestions.tuteehub.com/tag/book-900767" style="font-weight:bold;" target="_blank" title="Click to know more about BOOK">BOOK</a> of final entry because it is the book in which all the <a href="https://interviewquestions.tuteehub.com/tag/business-21797" style="font-weight:bold;" target="_blank" title="Click to know more about BUSINESS">BUSINESS</a> <a href="https://interviewquestions.tuteehub.com/tag/transactions-18175" style="font-weight:bold;" target="_blank" title="Click to know more about TRANSACTIONS">TRANSACTIONS</a> would ultimately <a href="https://interviewquestions.tuteehub.com/tag/find-11616" style="font-weight:bold;" target="_blank" title="Click to know more about FIND">FIND</a> their place.</body></html> | |
| 35. |
Why is the evidence provided by source documents important to accounting? |
| Answer» <html><body><p></p>Solution :These documents are written and authentic <a href="https://interviewquestions.tuteehub.com/tag/proof-1169715" style="font-weight:bold;" target="_blank" title="Click to know more about PROOF">PROOF</a> of the correctness of <a href="https://interviewquestions.tuteehub.com/tag/recorded-2240050" style="font-weight:bold;" target="_blank" title="Click to know more about RECORDED">RECORDED</a> transaction. They are <a href="https://interviewquestions.tuteehub.com/tag/required-1185621" style="font-weight:bold;" target="_blank" title="Click to know more about REQUIRED">REQUIRED</a> for audit of <a href="https://interviewquestions.tuteehub.com/tag/accounts-14064" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNTS">ACCOUNTS</a> and tax assessments. They also serve as legal evidence in <a href="https://interviewquestions.tuteehub.com/tag/case-910082" style="font-weight:bold;" target="_blank" title="Click to know more about CASE">CASE</a> of a dispute.</body></html> | |
| 36. |
Why is only one account posted to the Ledger Account from the Cash Book ? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :Although the Cash Book is a book of original entry, it is <a href="https://interviewquestions.tuteehub.com/tag/also-373387" style="font-weight:bold;" target="_blank" title="Click to know more about ALSO">ALSO</a> a book where the Cash Account and Bank Account are <a href="https://interviewquestions.tuteehub.com/tag/maintained-2162867" style="font-weight:bold;" target="_blank" title="Click to know more about MAINTAINED">MAINTAINED</a>. In <a href="https://interviewquestions.tuteehub.com/tag/effect-966056" style="font-weight:bold;" target="_blank" title="Click to know more about EFFECT">EFFECT</a>, it is both a book of oritinal entry and a Leger dedicated to those <a href="https://interviewquestions.tuteehub.com/tag/accounts-14064" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNTS">ACCOUNTS</a>. As a result, each transaction in the Cash Book is posted book only once to another account.</body></html> | |
| 37. |
Why is it necessary to sub-divide a Journal? What are its advantages? |
| Answer» | |
| 38. |
Why is it necessary to record the adjusting entries in the preparation of final accounts? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :N/a</body></html> | |
| 39. |
Why is it necessary to create a provision for doubtful debts at the time of preparation of final accounts? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :N/a</body></html> | |
| 40. |
Why is it necessary to pass the Adjustment Entries ? |
| Answer» <html><body><p></p>Solution :Accrual concept is the fundamental <a href="https://interviewquestions.tuteehub.com/tag/accounting-637" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNTING">ACCOUNTING</a> concept and requires that all expenses, whether paid or not and all incomes and <a href="https://interviewquestions.tuteehub.com/tag/gains-1003231" style="font-weight:bold;" target="_blank" title="Click to know more about GAINS">GAINS</a> whether <a href="https://interviewquestions.tuteehub.com/tag/received-1179289" style="font-weight:bold;" target="_blank" title="Click to know more about RECEIVED">RECEIVED</a> or not, should be <a href="https://interviewquestions.tuteehub.com/tag/accounted-7264122" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNTED">ACCOUNTED</a> to ascertain correct profit or loss, assets and liabilities. They are recorded through the adjustments entries.</body></html> | |
| 41. |
Why is it necessary for accounts to assume that a business entity will remain a going concern? |
| Answer» <html><body><p></p>Solution :This assumption providesthe very <a href="https://interviewquestions.tuteehub.com/tag/basis-893664" style="font-weight:bold;" target="_blank" title="Click to know more about BASIS">BASIS</a> for showing the value of assets in the <a href="https://interviewquestions.tuteehub.com/tag/balance-891682" style="font-weight:bold;" target="_blank" title="Click to know more about BALANCE">BALANCE</a> sheet because we assume that these assets are not going to be sold in <a href="https://interviewquestions.tuteehub.com/tag/near-1112277" style="font-weight:bold;" target="_blank" title="Click to know more about NEAR">NEAR</a> future.</body></html> | |
| 42. |
Why is it necessary for accounts to assume that a business entity will remain a going concern ? |
| Answer» <html><body><p></p>Solution :<a href="https://interviewquestions.tuteehub.com/tag/going-1008806" style="font-weight:bold;" target="_blank" title="Click to know more about GOING">GOING</a> Concern Concept is a <a href="https://interviewquestions.tuteehub.com/tag/fundamental-466867" style="font-weight:bold;" target="_blank" title="Click to know more about FUNDAMENTAL">FUNDAMENTAL</a> <a href="https://interviewquestions.tuteehub.com/tag/accounting-637" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNTING">ACCOUNTING</a> concept . It is because of this concept , distinction is made between <a href="https://interviewquestions.tuteehub.com/tag/capital-908677" style="font-weight:bold;" target="_blank" title="Click to know more about CAPITAL">CAPITAL</a> and revenue expenditures and thus assets and <a href="https://interviewquestions.tuteehub.com/tag/liabilites-2156931" style="font-weight:bold;" target="_blank" title="Click to know more about LIABILITES">LIABILITES</a> are recognised.</body></html> | |
| 43. |
Why is Input GST (CGST and SGST or IGST) Account credited when goods are given as charity and goods are damaged or lost in fire or theft ? |
| Answer» <html><body><p></p>Solution :It is <a href="https://interviewquestions.tuteehub.com/tag/credited-7316860" style="font-weight:bold;" target="_blank" title="Click to know more about CREDITED">CREDITED</a> because goods given as <a href="https://interviewquestions.tuteehub.com/tag/charity-914534" style="font-weight:bold;" target="_blank" title="Click to know more about CHARITY">CHARITY</a> and goods being damaged or lost in fire or theft in not sale i.e., <a href="https://interviewquestions.tuteehub.com/tag/gst-13422" style="font-weight:bold;" target="_blank" title="Click to know more about GST">GST</a> is not <a href="https://interviewquestions.tuteehub.com/tag/collected-2526120" style="font-weight:bold;" target="_blank" title="Click to know more about COLLECTED">COLLECTED</a>. <a href="https://interviewquestions.tuteehub.com/tag/therefore-706901" style="font-weight:bold;" target="_blank" title="Click to know more about THEREFORE">THEREFORE</a>, Input GST will not be set- off against Output GST.</body></html> | |
| 44. |
Why is Closing stock valued at lower of cost or net realisable value (market value) ? |
| Answer» <html><body><p></p>Solution :Closing stock is valued at <a href="https://interviewquestions.tuteehub.com/tag/lower-1080637" style="font-weight:bold;" target="_blank" title="Click to know more about LOWER">LOWER</a> of cost or net <a href="https://interviewquestions.tuteehub.com/tag/realisable-7708686" style="font-weight:bold;" target="_blank" title="Click to know more about REALISABLE">REALISABLE</a> value (market value) because of the <a href="https://interviewquestions.tuteehub.com/tag/prudence-1171261" style="font-weight:bold;" target="_blank" title="Click to know more about PRUDENCE">PRUDENCE</a> Concept of <a href="https://interviewquestions.tuteehub.com/tag/accounting-637" style="font-weight:bold;" target="_blank" title="Click to know more about ACCOUNTING">ACCOUNTING</a>, <a href="https://interviewquestions.tuteehub.com/tag/whereby-7723000" style="font-weight:bold;" target="_blank" title="Click to know more about WHEREBY">WHEREBY</a> anticipated losses are accounted while anticipated profits are not.</body></html> | |
| 45. |
Why is Bank Reconciliation Statement prepared ? |
| Answer» <html><body><p></p>Solution :Bank <a href="https://interviewquestions.tuteehub.com/tag/reconciliation-620590" style="font-weight:bold;" target="_blank" title="Click to know more about RECONCILIATION">RECONCILIATION</a> Statement is <a href="https://interviewquestions.tuteehub.com/tag/prepared-1163605" style="font-weight:bold;" target="_blank" title="Click to know more about PREPARED">PREPARED</a> to determine the <a href="https://interviewquestions.tuteehub.com/tag/reasons-1179183" style="font-weight:bold;" target="_blank" title="Click to know more about REASONS">REASONS</a> for differences between <a href="https://interviewquestions.tuteehub.com/tag/balance-891682" style="font-weight:bold;" target="_blank" title="Click to know more about BALANCE">BALANCE</a> as Cash Book and balance as per Bank Statement or Bank Pass Book and if necessary to record the entry.</body></html> | |
| 46. |
Why is Accrued Income credited to the Profit and Loss Account and shown as current asset in the Balance sheet ? |
| Answer» <html><body><p></p>Solution :Accrual Concept of accounting requires that revenue be recognised when goods or services have been sold <a href="https://interviewquestions.tuteehub.com/tag/whether-7262895" style="font-weight:bold;" target="_blank" title="Click to know more about WHETHER">WHETHER</a> the amount has been <a href="https://interviewquestions.tuteehub.com/tag/received-1179289" style="font-weight:bold;" target="_blank" title="Click to know more about RECEIVED">RECEIVED</a> or not. Since income is credited to <a href="https://interviewquestions.tuteehub.com/tag/profit-1168589" style="font-weight:bold;" target="_blank" title="Click to know more about PROFIT">PROFIT</a> and Loss Account, it is credited to the Profit and Loss account. And since, the amount is due to the enterprise, it is <a href="https://interviewquestions.tuteehub.com/tag/shown-1206565" style="font-weight:bold;" target="_blank" title="Click to know more about SHOWN">SHOWN</a> as a <a href="https://interviewquestions.tuteehub.com/tag/current-940804" style="font-weight:bold;" target="_blank" title="Click to know more about CURRENT">CURRENT</a> asset in the Balance Sheet.</body></html> | |
| 47. |
Why is a Compensating Error not disclosed by the Trial Balance? |
| Answer» <html><body><p></p>Solution :A <a href="https://interviewquestions.tuteehub.com/tag/compensating-2531812" style="font-weight:bold;" target="_blank" title="Click to know more about COMPENSATING">COMPENSATING</a> Error is not <a href="https://interviewquestions.tuteehub.com/tag/disclosed-7675060" style="font-weight:bold;" target="_blank" title="Click to know more about DISCLOSED">DISCLOSED</a> by the Trial <a href="https://interviewquestions.tuteehub.com/tag/balance-891682" style="font-weight:bold;" target="_blank" title="Click to know more about BALANCE">BALANCE</a> as <a href="https://interviewquestions.tuteehub.com/tag/one-585732" style="font-weight:bold;" target="_blank" title="Click to know more about ONE">ONE</a> error is nullified by <a href="https://interviewquestions.tuteehub.com/tag/another-876628" style="font-weight:bold;" target="_blank" title="Click to know more about ANOTHER">ANOTHER</a> error.</body></html> | |
| 48. |
Why Input GST (CGST and SGST or IGST) Account ir credited when proprietor takes the goods for personal use ? |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :It is credited because <a href="https://interviewquestions.tuteehub.com/tag/gst-13422" style="font-weight:bold;" target="_blank" title="Click to know more about GST">GST</a> credit is allowed by when goods are sold. Goods taken by <a href="https://interviewquestions.tuteehub.com/tag/proprietor-1170512" style="font-weight:bold;" target="_blank" title="Click to know more about PROPRIETOR">PROPRIETOR</a> is not a <a href="https://interviewquestions.tuteehub.com/tag/sale-1193496" style="font-weight:bold;" target="_blank" title="Click to know more about SALE">SALE</a> but drawings .</body></html> | |
| 49. |
Why fixed assets are not shown in the books at market value? |
| Answer» <html><body><p></p>Solution :Fixed assets are not <a href="https://interviewquestions.tuteehub.com/tag/shown-1206565" style="font-weight:bold;" target="_blank" title="Click to know more about SHOWN">SHOWN</a> in the books at market <a href="https://interviewquestions.tuteehub.com/tag/value-1442530" style="font-weight:bold;" target="_blank" title="Click to know more about VALUE">VALUE</a> because : (i) as per historical concept, we <a href="https://interviewquestions.tuteehub.com/tag/recorded-2240050" style="font-weight:bold;" target="_blank" title="Click to know more about RECORDED">RECORDED</a> fixed assets at original cost, and (ii) as per going <a href="https://interviewquestions.tuteehub.com/tag/concern-25789" style="font-weight:bold;" target="_blank" title="Click to know more about CONCERN">CONCERN</a> concept, the assets are not going to be sold in the <a href="https://interviewquestions.tuteehub.com/tag/near-1112277" style="font-weight:bold;" target="_blank" title="Click to know more about NEAR">NEAR</a> future, Hence, the market value is irrelevant.</body></html> | |
| 50. |
Why expenditure is classified into capital and revenue. |
| Answer» <html><body><p></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :<a href="https://interviewquestions.tuteehub.com/tag/financial-988642" style="font-weight:bold;" target="_blank" title="Click to know more about FINANCIAL">FINANCIAL</a> statements cannot be prepared without classifying theexpenditure into capital and revenue. Capital expenditure is written in the Balance Sheet whereas revenue expenditure is written on the debit <a href="https://interviewquestions.tuteehub.com/tag/side-1206832" style="font-weight:bold;" target="_blank" title="Click to know more about SIDE">SIDE</a> of Trading or <a href="https://interviewquestions.tuteehub.com/tag/profit-1168589" style="font-weight:bold;" target="_blank" title="Click to know more about PROFIT">PROFIT</a> and Loss Account.</body></html> | |