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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.
| 252. |
What is the main objective of setting accounting standards ?OrWhat is meant by Accounting Standards ? Explain one objective of Accounting |
| Answer» SOLUTION :Accounting Standards are the guidelines for the preparation and presentationof Financial Statemanets . The objective of setting Accounting Standards is to bring uniformity in accounting PRACTICES and to ensure TRANSPARENCY , CONSISTENCY and comparability . | |
| 253. |
What is the main objective of preparing a Trial Balance? |
| Answer» SOLUTION :The MAIN objective of preparing a Trial Balance is to verify the ARITHMETICAL accuracy of ACCOUNTING entries. | |
| 254. |
What is the last step of accounting process ? |
| Answer» SOLUTION :Communication the final results to the USERS who analyse them as PER their INDIVIDUAL REQUIREMENTS. | |
| 255. |
What is the importance of the words 'Per Annum' for charging depreciation on fixed assets? |
| Answer» Solution :When rate of depreciation is given with the WARDS 'PER annum or p.a.', like `10%` per annum or `10%` p.a., then depreciation is charged on the fixed asset only for the period for which the asset is used. HOWEVER, when depreciation rate is without the words 'per annum' then depreciation is charged for the FULL accounting period, irrespective of the date of purchase of TLIE asset. | |
| 256. |
What is the impact of GST Collected at the time of sale of asset on profit or loss? |
| Answer» Solution :GST COLLECTED does not have any impact on PROFIT or LOSS, it being a liability of the FIRM to deposit in Government Account. | |
| 257. |
What is the impact of GST Paid at the time of purchase of machinery on depreciation ? |
| Answer» Solution :GST PAID does not have any IMPACT on depreciation SINCE GST Paid is not a COST of asset, it is set-off against GST Collected. | |
| 258. |
What is the function of Book Keeping? |
| Answer» Solution :The function of BOOK Keeping is to identify financial transactions and events, measuring them in MONEY TERMS, recording them in the books of account and CLASSIFYING the recorded transactions. | |
| 259. |
What is the first step of accounting process ? |
| Answer» SOLUTION :RECORDING of TRANSACTIONS in the BOOKS of ACCOUNTS. | |
| 260. |
What is the full form IFRS? |
| Answer» SOLUTION :INTERNATIONAL FINANCIAL REPORTING STANDARDS. | |
| 261. |
What is the effect of overvaluing Clothing Stock on the Current Year' s Profit ? |
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Answer» DECREASES the gross PROFIT and NET profit. |
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| 262. |
What is the common objective between the Double Entry System and Single Entry System? |
| Answer» SOLUTION :Common objective between the two SYSTEMS is to determine the FINANCIAL PERFORMANCE of the business. | |
| 263. |
What is the difference between Straight Line Method and Diminishing Balance Method of charging Depreciation? (Any two) |
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Answer» SOLUTION :(i) Under the Straight Line METHOD of Depreciation, Depreciation is UNIFORM year after year whereas under the Written Down VALUE Method, it reduces every year. (II) Depreciation under the Straight Line Method is calculated at a fixed percentage on the original cost whereas under the Written Down Value Method, it is calculated on original cost (in first year) and on written down value in subsequent years. |
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| 264. |
What is the basic difference between IFRS and Accounting Standards (AS) issued by ICAI (Institute of Chartered Accountants of India) |
| Answer» Solution :IFRS are based on FAIR Value Concept whereas Accounting Stanedards are based on Historical COST Concept. | |
| 265. |
What is the basic accounting equation? |
| Answer» SOLUTION :ASSETS = LIABILITIES + CAPITAL | |
| 266. |
What is Statement of Affairs? |
| Answer» SOLUTION :A Statement of AFFAIRS is a statement of all assets and liabilities. The difference between the AMOUNTS of two SIDES is taken as CAPITAL. | |
| 267. |
What is Single Entry System? |
| Answer» Solution :Single ENTRY System of accounting is a system in which accounting RECORDS are not maintained according to Double Entry System of BOOK keeping. | |
| 268. |
What is signified by a debit bank balance ? |
| Answer» Solution :A debit bank BALANCE SIGNIFIES balance LYING deposited in the bank . | |
| 269. |
What is signified by a credit bank balance ? |
| Answer» Solution :A CREDIT BANK balance SIGNIFIES AMOUNT payable to the bank by the firm . | |
| 270. |
What is signified by a debit cash balance ? |
| Answer» Solution :A debit cash BALANCE SIGNIFIES Cash in Hand . | |
| 271. |
What is revenue? |
| Answer» SOLUTION :Revenue is theincome of a recurring (reguar ) nature such as RECEIPTS from SALE of goods, rent, COMMISSION etc. | |
| 272. |
What is Profit and Loss Account ? |
| Answer» SOLUTION :Profit and LOSS Account is the account which shows net profit earned or net loss incurred during an accounting period. It is credited with GROSS profit and indirect income and DEBITED with all indirect expenses and Losses. The net result is either net profit or net loss | |
| 273. |
What is owner's equity? Give an equation for calculating owner's equity. Give two examples at least. |
| Answer» | |
| 274. |
What is One-Sided Error? |
| Answer» Solution :ONE-Sided Errors are those errors which have occurred in one SIDE 'Debit or Credit' of an account. Because of which Trial Balance will not AGREE. | |
| 275. |
What is money measurement Concept? |
| Answer» SOLUTION :Only those TRANSACTIONS and EVENTS are recorded in accounting which can be expressed in TERMS of money. | |
| 276. |
What is ment by Two-column Cash Book? |
| Answer» Solution :Two-column Cash BOOK is the Cash Book which has two COLUMNS on each side, one column each to record cash transactions and SECOND column each to record bank transactions. | |
| 277. |
What is menat by Reserve Fund? |
| Answer» SOLUTION :The term 'RESERVE Fund' means reserve the amount of which has been invested outside the BUSINESS. | |
| 278. |
What is menat by Provision for Discount on Debtors ? |
| Answer» SOLUTION :Provision for Discount on Debtors means provision MADE for discount that is likely to be allowed to the debtors. It is CALCULATED as a PERCENTAGE of debtors. | |
| 279. |
What is meant by Written Down Value Method of providing Depreciation? |
| Answer» Solution :WRITTEN Down VALUE METHOD of providing depreciation means depreciation is calculated and charged at a fixed rate on written down value of the asset every YEAR. | |
| 280. |
whatismeantby Utilitysoftware ? |
| Answer» | |
| 281. |
What ismeant by Unearned Income ? |
| Answer» SOLUTION :UNEARNED Income means income that has been received against which SERVICES are yet to be rendered or GOODS are yet to be SOLD. | |
| 282. |
What is meant by Tangible Assets ? |
| Answer» Solution :Tangible Assets are the assets which have physical existence, i.e., they can be seen and TOUCHED such as Land, BUILDING, Plant and Machinery and COMPUTERS | |
| 283. |
What is meant by Straight Line Method of providing Depreciation? |
| Answer» SOLUTION :Straight Line METHOD of providing depreciation means depreciation is calculated at a percentage of original cost. Depreciation REMAINS uniform from YEAR to year. | |
| 284. |
What is meant by Specific Reserve? |
| Answer» SOLUTION :Specific Reserve is the reserve CREATED for a specific PURPOSE and can be UTILISED only for that purpose. | |
| 285. |
What is meant by Simple Cash Book ? |
| Answer» SOLUTION :SIMPLE Cash Book is a Cash Book with one COLUMN on each side to record only cash TRANSACTIONS. | |
| 286. |
What is meant by Sales? |
| Answer» Solution :The term sales is USED for the AMOUNT of sale of GOODS and services RENDERED .The term sales includes both Cash andCredit Sales. | |
| 287. |
What is meant by Revenue Reserve? |
| Answer» Solution :REVENUE RESERVES are the reserves being the AMOUNT set ASIDE out of revenue profits. | |
| 288. |
What is meant by Revenue Receipt ? |
| Answer» Solution :Revenue Receipt is the amount RECIVED by the business in the regular course of business SAY because of sales of GOODS and/or services RENDERED | |
| 289. |
What is meant by Revenue from Operations ? |
| Answer» SOLUTION :Revenue from Operations means revenue EARNED by the enterprise from its Operating Activities such as Net Sales (Sales - Sales Return), services RENDERED, sale of scrap, etc. | |
| 290. |
What is meant by Revenue Expenditure ? |
| Answer» SOLUTION :Revenue EXPENDITURE is that expenditure benefit of which is exhausted within the ACCOUNTING year in which it is incurred. EXAMPLE is expense on salaries | |
| 291. |
What is meant by Reserves? |
| Answer» SOLUTION :Reserve is an AMOUNTS SET ASIDE out of profits. It is an appropriation of Profits. | |
| 292. |
What is meant by 'Rebate'? |
| Answer» Solution :REBATE is the discount allowed for reasons other than those for which Trade Discount is allowed. SAY for POOR QUALITY of goods. | |
| 293. |
What is meant by Purchases? |
| Answer» Solution :Theterm purchases is USED for buying of GOODS for resale or for use in MANUFACTURING process. Theterm purchases INCLUDES both Cash and Credit PURCHASE of goods. | |
| 294. |
What is meant by qualitative information? |
| Answer» Solution :Qualitative aspects of business UNITS are those aspects which cannot be EXPRESSED in monetary TERMS, such as changes in management, REPUTATION of the business, codial management-labour relations, firms ability to develop new products, efficiency of management, SATISFACTION of firms customers etc. | |
| 295. |
What is meant by provision for doubtful debts? How are the relevant accounts prepared and what journal entries are recorded in final accounts? How is the amount for provision for doubtful debts calculated? |
| Answer» SOLUTION :N/a | |
| 296. |
What is meant by Provision for Doubtful Debts ? |
| Answer» SOLUTION :PROVISION for Doubtful Debts means provision made against debts of the amount that are doubtful of recovery. It is CALCULATED as a PERCENTAGE of debtors. | |
| 297. |
What is meant by provision for discount on debtors? |
| Answer» SOLUTION :N/a | |
| 298. |
What is meant by Provision? |
| Answer» Solution :Provision is an amount set aside by charging it in Profit and LOSS ACCOUNT to provide for a known LIABILITY the amount of which cannot be DETERMINED with accuracy. | |
| 299. |
What is meant by Prepaid Expenses ? |
| Answer» Solution :PREPAID EXPANSES are the expanses that have been paid but their BENEFIT will not be exhausted in current accounting PEROID but in the next YEAR. | |
| 300. |
What is meant by Posting? |
| Answer» Solution :Posting means TRANSFERRING the entries from the JOURNAL to the LEDGER ACCOUNT. | |