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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 201. |
When cash is withdrawn frombank, the entry in the Cash Book is Called ………… entry . |
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| 202. |
When bank Column of a Cash Book shows a debit balance, it means ________ |
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| 203. |
When assets are listed in order of liquidity in a Balance Sheet in which order the following shall appear ? (a) Land and Building, (b) Cash in hand, (c) Machinery, (d) Bills Receivable |
| Answer» Solution :1. Cash in HAND, 2. Bills Receiable, 3. Machinery, 4. Land and Building | |
| 204. |
When bank Column of a Cash Book shows a credit balance, it means ________ |
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| 205. |
When an entry is made in journal: |
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Answer» Assets are listed FIRS |
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| 206. |
When an asset is purchased in cash or an expense is incurred in cash , cash in credited . Why ? |
| Answer» SOLUTION :Cash is an asset . On purchase of an asset against payment in cash , cash has GONE out , i.e., cash has decreased . THUS , Cash Account is CREDITED . | |
| 207. |
When an account is said to have a debit balance? |
| Answer» Solution :An account is SAID to have a DEBIT balance IFTHE total of its debit side is more than the total of its CREDIT side. | |
| 208. |
When an account is said to have a credit balance? |
| Answer» SOLUTION :An ACCOUNT is said to have a credit balance if the TOTAL of its credit side is more than the total of its DEBIT side. | |
| 209. |
'When a Sales Book is maintained, there is no need to open Sales Account in the Ledger''. Do you agree? |
| Answer» SOLUTION :No. Because Sales Book records only CREDIT Sales of goods WHEREAS Sales Account records both Cash as well as Credit Sales. | |
| 210. |
When a firm maintain a Cash Book, it need not maintain ………. A/c in the Ledger . |
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| 211. |
When a cheque deposited into bank is dishonoured, it is recorded on ……. Side of Cash Book in ……. Column. |
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| 212. |
When a firm maintain a Cash Book , it need not maintain ….. |
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Answer» Journal Proper |
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| 213. |
When a cheque deposited into bank is dishonoured by bank , it will be recorded in cash book in : |
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Answer» BANK COLUMN on debit side |
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| 214. |
Whatis accrual concept? |
| Answer» Solution :Revenue is recorded when sales and MADE or services are RENDERED and it is IMMATERIAL whether cash is RECEIVED or not. | |
| 215. |
What will be the Journal entries for the transactions in Q . 10 in the books of Roshan? |
Answer» SOLUTION :
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| 216. |
Whatwill be the effect of the followingon the AccountingEquation ? (i) Harish started business with cash₹ 18,000 (ii) Purchased goods for cash₹ 5, 000 and on credit₹ 2,000 (iii) Sold goods for cash₹4,000 (costing₹ 2,400) (iv) Rent paid₹ 1,000 and rent outstanding₹ 200 |
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| 217. |
Whatwill be the effect of the followingon the AccountingEquation ? (i) Harish started business with cash₹ 18,000 (ii) Purchased goods for cash₹ 5, 000 and on credit₹ 2,000 (iii) Sold goods for cash₹4,000 (costing₹ 2,400) (iv) Rent paid₹ 1,000 and rent outstanding₹ 200 |
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| 218. |
What will be the Journal entries for the transaction in Q 7 in the books of Rahul? |
Answer» SOLUTION :On SALES in the BOOKS of RAHUL 
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| 219. |
Whatwillbe effect of the followingon the Accounting Equation ? Started business with cash ₹45,000(ii)Openeda Bankform M/s. Sum & Co, for ₹11,200. |
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| 220. |
Whatwillbe effect of the followingon the Accounting Equation ? Started business with cash ₹45,000(ii)Openeda Bankform M/s. Sum & Co, for ₹11,200. |
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| 221. |
What type of information is required by long term lenders ? |
| Answer» Solution :They want information about the CREDITWORTHINESS and the ability of the ENTERPRISE to pay INTEREST and the repayment of their loans. | |
| 222. |
What purpose does a Balance Sheet serve? |
| Answer» Solution :The purpose of BALANCE SHEET is to measure the FINANCIAL position of the business as at a PARTICULAR DATE | |
| 223. |
What kind of transactions are recorded in the Cash Book ? |
| Answer» SOLUTION :CASH and BANK TRANSACTIONS are RECORDED. | |
| 224. |
What practical difficulties are encountered by a trader due to incompleteness of accounting records? |
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| 225. |
What isTrial balance ? Does the balancing of this ensure accuracy of books of accounts. |
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Answer» Solution :Trial balance : It is a statement prepared with the help of ledger balances at the end of financial year to test the ARITHMETICAL accuracy of books of accounts. Balancing of trial balance does not ensure the accuracy of books of accounts. Errors which remain undetected even if trial balance agrees: (i) Error of omission : If a transaction remains unrecorded in journal or subsidiary books. (ii) Error of commission : When wrong AMOUNT is entered EITHER in journal or subsidiary books. (iii) COMPENSATING error : If the EFFECT of one error is neutralised by the effect of some other error. (iv) Error of principle : When fundamental principle of accountancy is violated while recording a transaction. |
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| 226. |
What is Two-Sided Error? |
| Answer» SOLUTION :Two-Sided Errors are those errors that have been COMMITTED on both SIDES, i.e., Debit and credit. ALTHOUGH error has been committed YET the Trial Balance will agree. | |
| 227. |
What is Trial balance ? |
| Answer» Solution :TRIAL balance is a statement, prepared with the debit and CREDIT balances of ledger ACCOUNTS to test the ARITHMETICAL accuracy of the books. | |
| 228. |
What is Transfer Voucher? |
| Answer» SOLUTION :Non-cash VOUCHERS (or transfer vouchers) are the DOCUMENTARY EVIDENCE of non-cash TRANSACTIONS. | |
| 229. |
What is Trading Accounts? |
| Answer» Solution :Trading Account is the account that reveals gross PROFIT or gross loss. It is CREDITED with the AMOUNT of sales of goods and DEBITED with the opening stock of goods along with the direct EXPENSES related to the sales made i.e., purchases, freight inwards, wages, etc | |
| 230. |
What is Trade Discount? |
| Answer» Solution :Trade DISCOUNT is the discount allowed when the GOODS are sold to the purchaser for RESALE to the ultimate consumer or when the goods are purchased in LARGE quantity. | |
| 231. |
What is the use of Financial Statements for Potential Investors ? |
| Answer» Solution :The prospective investors are in need of detailed information regarding the progress of the concern because on the basis of the information revealed by financial statements they TAKE DECISIONS regarding the investment to be made in the paritcular business. They would like to get information RELATING to the PAST and present performance of the business and the decision to be taken for future. After keeping all facts in mind they come forward for investing their funds in the business. | |
| 232. |
What is the traditional function of accounting ? |
| Answer» SOLUTION :RECORDING of FINANCIAL TRANSACTIONS. | |
| 233. |
What is the significane of debit and credit balances of Cash Book? |
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Answer» Solution :Debitbalance as PER Cash BOOK means the amount which has been withdrawn in excess of the deposites Stating DIFFERENTLY, debit, balances means favourablebalance, while credit balancemeans unfavourable BALANCE. |
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| 234. |
What is the rule of recording transactions in Real Accounts? |
| Answer» SOLUTION :DEBIT what CAMES in and CREDIT what GOES out. | |
| 235. |
What is the rule of recording transactions in Personal Accounts? |
| Answer» SOLUTION :DEBIT the RECEIVER and CREDIT the GIVER. | |
| 236. |
What is the rule of recording transactions in Nominal Accounts? |
| Answer» SOLUTION :DEBIT the expenses and LOSSES and Credit incomes and GAINS. | |
| 237. |
What is the rule for Revenue or Income Account ? |
| Answer» SOLUTION :The RULE for Revenue or Income Account is INCREASES in revenue or income is credited and DECREASES are DEBITED . | |
| 238. |
What is the rule for Liability Account ? |
| Answer» SOLUTION :RULE for LIABILITY Account is Increases are CREDITS and decreases are debits . | |
| 239. |
What is the rule for Expense Account? |
| Answer» SOLUTION :The RULE for EXPENSES ACCOUNT is Increases in expenses are debited and decreases are CREDITED. | |
| 240. |
whatis theroleof computerin Accounting ? |
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| 241. |
What is the rule for an Asset Account ? |
| Answer» Solution :RULE for an ASSET ACCOUNT is 'Increases in ASSETS are debits and decreases credit' | |
| 242. |
What is the residual or scrap value of the asset? |
| Answer» SOLUTION :It is the estimated VALUE of a fixed asset at the END of its estimated useful life. It is the AMOUNT which is expected to be received when the asset is sold at the end of its useful life. | |
| 243. |
What is the reason that cheques deposited into bank but not yet credited by bank are not recorded in the amended cash book ? |
| Answer» SOLUTION :Cheques deposited intobank are already correctly recorded in the cash BOOK. As soon as they are collected by bank, they will be recorded in pass book also. | |
| 244. |
What is the reason that the capital expenditure is shows in the Balance Sheet? |
| Answer» Solution :Amount spent on acquiring or erection of FIXED assets is TERMED as capital expenditure . Such expenditure is SHOWN in theassets because it yields benefit over a long PERIOD of time. | |
| 245. |
What is the reason for agreement of Trial Balance ? |
| Answer» Solution :Under the DOUBLE entry system, each TRANSACTION is recorded two times, once on the debit side of an account and again on the CREDIT side of another account. It is because of this reason that the Trial Balance should ALWAYS AGREE. | |
| 246. |
What is the purpose of preparing trading and profit and loss account? |
| Answer» SOLUTION :N/a | |
| 247. |
What is the reason that cheques deposited into bank but dishonoured by the bank are recorded in the ameded cash book ? |
| Answer» Solution :Cheques deposited have been recorded on the debit side of bank COLUMN of CASH book. Since they will never be recorded in pass book due to their dishonour, the entry in the cash book must be reversed and hence SOULD be recorded on the CREDIT side of AMENDED cash book. | |
| 248. |
What is the principle of valuation of inventory ? |
| Answer» SOLUTION :The principle of valuation of inventory is that inventory is valued at COST or net REALISABLE value, WHICHEVER is LOWER. | |
| 249. |
What is the primary reason for business students and others to study accounting discipline ? |
| Answer» SOLUTION :Accounting information is PRESENTED and communicated in the form of financial statements, reports, graphs and charts to the internal and EXTERNAL users who REQUIRE it for MAKING important decisions.Primary reason to study accounting discipline is to acqure such knowledge which is helpful in understanding these statements, reports etc. | |
| 250. |
What is the objective of preparing an Account ? |
| Answer» SOLUTION :The objective of PREPARING an account is to SUMMARISE all transactions relating to a particular head in one account . Balance of all the ACCOUNTS leads to preparation of Trial Balance . | |