Introduction to accounting - accounting concepts and conventions, Indian Accounting Standards, accounting equation, double entry system, journal, ledger, cash book, other subsidiary books, trial balance, rectification of errors, bank reconciliation statement - One Line Questions

1. According to the Business Entity Concept, the owner and the business are treated as: — Separate entities
2. Which of the following is typically a credit balance in the ledger? — Sales Revenue
3. The primary purpose of preparing a Trial Balance is to verify: — Accuracy of arithmetic in ledger postings
4. When reconciling the bank statement, if the balance as per the cash book is taken as the starting point, and there is an error of overcasting the 'Bank' column in the cash book, what adjustment is needed? — Subtract the over-casted amount
5. When starting a bank reconciliation, if you begin with the balance as per the cash book and there are unpresented cheques, you should: — Subtract them
6. When starting a bank reconciliation, if you begin with the balance as per the passbook and there are deposits not yet credited by the bank, you should: — Add them
7. The Sales Journal is used to record: — All credit sales of goods
8. The Purchases Journal is used to record: — All credit purchases of goods
9. The 'Materiality' convention implies that: — Only material information needs to be disclosed.
10. A Trial Balance is a statement showing: — The debit and credit balances of ledger accounts
11. The convention of 'Conservatism' implies that accountants should: — Anticipate no profits but provide for all possible losses.
12. The accounting equation is represented as: — Assets = Liabilities + Owner's Equity
13. Which of the following is a liability? — Loan from proprietor
14. The concept of 'Periodicity' in accounting means that: — Business life is divided into artificial periods for reporting.
15. A Bank Reconciliation Statement is prepared to reconcile the difference between: — Bank balance as per passbook and bank balance as per cash book
16. The primary function of a Journal is to: — Record transactions chronologically
17. Recording an expense as an asset is an example of a: — Principle Error
18. The accounting concept that requires expenses to be recognized in the same period as the revenues they help generate is known as: — Matching
19. Which principle requires that financial statements should be prepared on a consistent basis from one period to another? — Consistency
20. Which accounting convention suggests that all material information should be disclosed in financial statements? — Full Disclosure
21. In double-entry bookkeeping, for every debit, there must be an equal and corresponding: — Credit
22. If a cheque received from a customer is dishonoured, it should be: — Debited to the customer's account and credited to the bank account
23. Which of the following items typically appears as an unpresented cheque on the bank side of a reconciliation? — Cheque issued by the company but not yet cashed by the payee
24. Which of the following is NOT a principle of the Double Entry System? — Every credit requires an equal credit.
25. The 'Double Entry System' of accounting means that: — Every transaction has at least two effects.
26. Which accounting concept emphasizes that only transactions that can be measured in monetary terms should be recorded? — Money Measurement Concept
27. The Sales Returns Journal is used to record: — Goods returned by customers
28. An interest credit by the bank appearing in the passbook but not in the cash book will: — Increase the cash book balance
29. Bank charges debited by the bank and not yet recorded in the cash book will: — Decrease the cash book balance
30. Which Indian Accounting Standard (Ind AS) deals with the presentation of financial statements? — Ind AS 1
31. The process of transferring entries from the journal to the ledger is called: — Posting
32. The ledger is a collection of: — Accounts
33. Which of the following is an example of an intangible asset? — Goodwill
34. The book of original entry where all business transactions are first recorded is called the: — Journal
35. Which of the following is an example of an asset? — Machinery
36. The accounting equation Assets = Liabilities + Owner's Equity is derived from the principle of: — Dual Aspect
37. Which accounting concept states that a business is assumed to continue operating indefinitely? — Going Concern Concept
38. If a sale of goods to Mr. X for $500 was wrongly recorded as $50 in the sales journal, this is an error of: — Commission
39. An error of casting (addition) in the Purchases Journal is an error of: — Commission
40. An error where an amount is recorded incorrectly in the books is a type of: — Commission Error
41. The 'Entity Concept' means that the business is considered: — A separate entity distinct from its owners
42. Recording a transaction in the journal is known as: — Journalizing
43. An error where a transaction is completely omitted from the books of account is called a: — Omission Error
44. An error that counterbalances another error is known as a: — Compensating Error
45. Which subsidiary book is used to record returns of goods sold on credit? — Sales Returns Book
46. Which of the following is a special journal used to record all cash receipts and cash payments? — Cash Book
47. Which account is debited when rectifying an error of overcasting the credit side of an account? — The account that was over-credited
48. If the Trial Balance does not tally, it indicates: — There are errors in the accounting records
49. A 'Suspense Account' is generally opened when: — The Trial Balance does not agree and the error cannot be immediately found.
50. The 'Cost Concept' in accounting states that assets should be recorded at: — Their historical cost
All One Line Questions
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