 A business is an activity carried out with the intention of earning the profit.

 Balance sheet indicates the financial status of the business at given period.
 Balance sheet indicates the expenditure & income from the business.
 The process of accounting split into three steams i.e. financial, cost,
management accounting.
 Accounting period Concept________________
1 Longer life-span on business is divided into shorter segments
2 Assets acquired by organization are recorded at their cost of
acquisition
3Each one being in the form of accounting period
4Selection of accounting period may depend on various factors
 Depreciation
Amt on fixed assets
Amt on current assets
Amt on tangible assets
Amt on intangible assets
 Amount with drawn for personal purpose drawing A/C to be debited.
 Purchased computers of Rs. 50,000 come under the heading of fixed asset
 Profit & Loss A/C credit side has
Commission received
Rent paid
Interest paid
Gross profit
 Purchase Goods of Rs. 7500 on 10% cash discount. The discount amount is
_______
 When bank balance as per pass book is considered then following to be
deducted.
cheques issued but not presented ,
direct deposit by customer ,
wrong credits given by bank
Bank charges
 Office & Administration overhead includes
Salary ,
Rent & Taxes ,
Stationary & postage
Octrai
 Store ledger
Record of all receipts and issue transactions ,
Financial expressions of all transactions ,
Maintenance of Store ledges provides a second check
Ascertain gross profit and loss
 Following points are taking into consideration for evaluation of receipts
The Price ,
The trade discount is to be deducted ,
Other amounts such as sales tax, excise duty, octroi duty
Depreciation
 Accounting to the matching principles of accounting, the ________ incurred
during an accounting period are required to be match with ________ during
that period
 Benefits available from revenue expenditure are received in the :
Same years or in several years
 Financial Accounting is …
 Designed to supply information to internal/ external users ,
Referred as 'Historical' form of accounting ,
Concerned with financial factors
Involves special techniques for attainment of objectives
 If the customer is not likely to pay the amount receivable from him, this
amount should to be treated as ________.
 Business Entity Concept
Business is separated from the owner. ,
The accounting process carried out for the business ,
Separate legal entity
Dual effect
 When bank balance as per pass book is considered then following to be
added.
Bills payable met by the bank
cheques deposited but not cleared ,
Interest debited by bank ,
bank charges debited by bank
 Accounting refers to the process of analyzing & interpreting the information
already recorded in the books of accounts.
 Cash and---------------are the two systems of accounting.
 Accounting to the matching principles of accounting, the ________ incurred
during an accounting period are required to be match with ________ during
that period
 To ascertain the ________ of all the transactions recorded in the ledger
account, the account is required to be ________
Net effect
Profit
Balanced
Credited
 Depreciation does not involve cash out flow
 Balance sheet indicates the financial status of the business at given period.
 Fixed assets do not give the returns during the same period during which they
are paid for
 A business is an activity carried out with the intention of earning the loss.
 ________ of Trial Balance generally ensures ________ accuracy of the
process of ledger posting .
Talling
arithmetical
balance
perfect
 Convention of Materiality __________________
1 Only those transactions will be considered which have
material impact on profitability ,
2 Insignificant transaction will be ignored ,
3 The cost of non-used should not be considered as the item
Of cost
4 Accounting policies and procedures should be followed
Consistently
 Amount with drawn for personal purpose drawing A/C to be debited.
 Cost Accountancy is a science, art and practice of a cost Accountant.
 Science indicates the possession and the application of
relevant systematic knowledge. ,
Art indicates the skill and ability. ,
Practice indicates continuous effects on the part of
cost accountant.
 Management Accounting aims at enabling the management to take the
decisions about the future. It may consider future data as well as non-
financial factors.
 Limitations of Management Accounting includes-------------------
Its wide scope ,
Possibility of intuitive decision ,
Requires elaborate organizational structure
Don`t sleep
 Double Entry Accounting System__________________
Every business transactions have two elements ,
When business receives something, it has to pay
something ,
Every debit has a corresponding credit
Expenditure should be equal to fixed assets
 Sundry creditors transfer to asset side.

 A bank reconciliation statement is prepared on a particular date.

 As soon as the suspense account balance is wiped out , it may be assumed
that all mistakes have been corrected.
 Credit sale of Rs. 5000 to Bobby should be entered in the purchase book.
 This cost indicates historical cost which is incurred in past.
Sunk cost
Real cost
Market cost
Fixed cost
 LAST IN FIRST OUT (LIFO)

1 The price of the latest available lot is considered first ,

2 If that lot is exhausted, the price of the lot prior to that is
considered ,
3 Physical issue of the material may not be made out of the
said lot
 Generally accounts of the assets will have ________ balance and liabilities
will have ________ balance
 Interest on overdraft charged by the bank is ________ to the pass book and
________ to the cash book
 ________ Legal charges and ________ are the accounts which are shown on
the debit side of Profit & Loss Account
Audit fee
Office rent
Wages
loan
 Financial Accounting protects the interest of outsiders . it considers ________
transaction and it is a ________ requirement
Historical
Past
Present
 Legal
 Accounts is a
Record of all transaction
Record of cash only
Nothing but a fake
Ek pardesi
 Whatever is to be sold need not be produced.
 Patents and Trade Marks Account is a Real Account.
 __________ Accounting becomes a source of information for Management
Accounting.
 The phrase 'By Balance c/d.' written on the credit side of the rent account,
indicates credit balance for this account.
 While preparing trial balance, the balance as per ________ book is considered
as bank balance.
 Locate the steps involved in rectifying the errors in the books of accounts
Find the wrong entry passed ,
Find the correct entry to be passed ,
Find the entry that will resolve the mistake in the
Books
Find your underwear under your pant
 Profitability statement indicates the amount of assets & liabilities.
 The purchase account should be debited when an order is placed with the
supplier of material.
 Profitability statement indicates the amount of assets & liabilities.


Question Correct Answer Your Answer

Accounting Books of Accounts

Profitability statement Amount payable to supplier

Balance-sheet Not accounted for in the books of

Accounts
Book-Keeping Amount not received from customer

Financial statement Process of analyzing &

interpretation

Personal account Sundry debtors and creditors

Bills Payable Financial status

Bills Receivable Indicates the amount of profit

earned
Trade Discount Accounted for in the books of
Accounts
Cash Discount Profitability statement & Balance-
sheet
Bad debts Amount received from the customer
 Real Accounts may also consist the accounts of some intangible assets like
Goodwill Account
 The rate at which the depreciation is to be calculated are also specified in the
Income Tax Act 1961.
 Cash and---------------are the two systems of accounting.
 P/L A/C debit side includes
Wages
Commission received
Gross profit
Capital
 Trading a/c credit side includes
sales ,
goods lost by fire ,
wages
closing stock
 A proprietor purchase goods worth Rs. 5500 & cash account credited to Rs.
5000 rectification of the suspense accounted debited to Rs……………….
 Amit purchase of Rs. 6710 had been posted to the debit of the creditors A/C
as 6170 rectifying the transaction the creditor A/C is to be debited amount to
Rs……………….
 Following error affect the trial balance
Wrong totaling of subsidiary books ,
Posting on the wrong side of an account ,
Wrong use of accounting principle
Omission of posting an account in the ledger
 A bill of Rs. 500 for old furniture sold to Raj, was entered in the sales day
book T/F
 Indirect Expenses includes
Rent ,
Freight charges
Telephone expenses ,
Insurance
 Financial Accounting protects the interest of outsiders . it considers ________
transaction and it is a ________ requirement
 Generally speaking income represents wealth increase and business success;
higher the income, lower will be the success of a business.
 P&L statement which is a period statement & relates to a certain period tells about
results of operations.
 Treating capital receipt as revenue income is an example of errors of commission.
 Due to compensating errors the arithmetical accuracy of the trial balance is
affected.
 Cost Accounting is concerned with calculation of the profitability and state of
affairs of the organization as a whole.
 The ________ adjustment is necessary to reflect the cost for the use of fixed asset
during the year.
Expence
Income
Depreciation
Bad debts
 Cheque received from a client on 28th September, 2004 must be entered in the
bank book only after it is credited in the pass book.
 Profit and loss account Land & Building

Manufacturing account Closing stock of finished goods

Balance Sheet Commission received

Trading account Work in Progress

 Financial accounting may deal with the ascertainment of cost & calculation of
profitability of the individual product.
 Debit all the expenses and credit all the income is the rule of the Real Account.
 Management Accounting is the process of analysis and interpretation of financial
data collected with help of financial accounting and cost accounting
 The amount of profit which is retained by the organisation is transferred to
'Reserves and Surplus' in the balance sheet.
 Rent of Rs.7,500/- for the month of April was received in March. Which account
should be credited in the books of accounts for making an entry for receipt of the
said amount?
 The assets which are suppoed to be used by the organisation to do business, are
known as ________assets.
 Financial Accounting discloses the financial performance & financial statements
of the business as a whole.
 The purpose of profit and loss account is to brign together information which
relates to gross profit and the expenses for running the business.
 Interest receivable is a________ for the organization
Current assests
Current liabilities
Fixed assests
Profit and loss
 An adjustment relating to outstanding expenses will ________ the net profit.
 The process of accounting split into three steams i.e. financial, cost, management
accounting.
 Financial statements are basically in two forms i.e. profitability statement and
balance sheet.
 All personal expenses of the owner should be debited to the organisation's profit
and loss account.
 Going concern concept is also known
Continuity concept
Dual aspect concept
Going concern concept
Cost concept
 The credit side of the sales book was overcast by Rs.2,000/-. As a result of this
rectification, what of the given impacts is likely to happen?
 Double entry system of accounting follows the principle of :
 Every debit has corresponding credit
Business is separated from the owner. ,
The accounting process carried out for the business ,
Separate legal entity
 Balance sheet indicates the financial status of the business at given period.
 Long term loan borrowed from financial institution comes under the heading of
long term liabilities.
 The amount of income for the current period which is not received during the
current period, is called ……………….
 Ledger Reviewing internal control system
Audit Maintain all types of accounts
Accounting Book of original entry
Journal Process of analyzing & interpretation
 The cost of asset is Rs. 1,10,000, Estimated scrap value 10,000,estimated life
10 yrs. Calculate the depreciation according to straight line method
 Management Accounting aims at enabling the management to take the
decisions about the future. It may consider future data as well as non-
financial factors. T
 (No. of unit * Rate of depreciation per unit ) this formula is used for written
down value method. F
 The ________ ledger carries the individual accounts, whereas the general ledger
records the consolidated effect of the individual transactions.
 An adjustment relating to outstanding expenses will ________ the net profit.
 Bank reconciliation statement is a systematic presentation of errors made by the
accountant.
Question Correct Answer

Ledger Maintain all types of accounts

Audit Reviewing internal control

system
Accounting Process of analyzing &
interpretation
Journal Book of original entry

 Depreciation is caused by use factor, obsolescence and…………………………………

………………………[time factor]
 Features of real account are………….
Mainly deals with items which are having physical ,
Consists of some intangible assets , examples
include - Lane, Building, Vehicles
 ________account can be defined as the record of all the transactions pertaining to a
person, asset, liability income or expenditure which have taken place in a specified
period. [Ledger]
 The balance of the suspense account will ________ after all the
errors are
[becom
e zero]
 Factory light, telephone expenses are examples of ________ expenses.
Liabilities All the amount owed by the
business
Drawing Withdrawn for personal use
Journal Book of original entry
Ledger Maintain all types of
Accounts
Assets All the properties owned by
the business