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Test: Principles of Accounting- 3 - B Com MCQ


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10 Questions MCQ Test - Test: Principles of Accounting- 3

Test: Principles of Accounting- 3 for B Com 2024 is part of B Com preparation. The Test: Principles of Accounting- 3 questions and answers have been prepared according to the B Com exam syllabus.The Test: Principles of Accounting- 3 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Principles of Accounting- 3 below.
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Test: Principles of Accounting- 3 - Question 1
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What is the purpose of the double entry system of accounting?

Detailed Solution for Test: Principles of Accounting- 3 - Question 1
The purpose of the double entry system of accounting is to ensure accurate recording of financial transactions, identify the debit and credit aspects of a transaction, and determine the financial position of a business. This system helps maintain the balance between the two aspects of every transaction and provides a complete and reliable accounting system.
Test: Principles of Accounting- 3 - Question 2
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Which account is debited when goods are purchased on credit?

Detailed Solution for Test: Principles of Accounting- 3 - Question 2
When goods are purchased on credit, the account to be debited is Goods Purchased A/c. This is because goods purchased is an expenditure (nominal account) and needs to be recorded on the debit side of the account. The corresponding credit entry will be made in the account of the giver, which in this case would be Ramesh A/c.
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Test: Principles of Accounting- 3 - Question 3
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According to the rules of debit and credit, what is the rule for personal accounts?

Detailed Solution for Test: Principles of Accounting- 3 - Question 3
The rule for personal accounts is to debit the receiver and credit the giver. This means that when a person receives a benefit from the business, their account is debited, and when a person gives a benefit to the business, their account is credited. This rule helps in determining the nature of personal accounts and ensures accurate recording of transactions involving individuals or entities.
Test: Principles of Accounting- 3 - Question 4
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Which account is credited when cash is received from a customer?
Detailed Solution for Test: Principles of Accounting- 3 - Question 4

Explanation:

  • Customer A/c: This account represents the amount owed by customers to the business for goods sold or services rendered on credit. When cash is received from a customer, it reduces the amount that the customer owes, so their account is credited.

  • Cash A/c: This account would be debited when cash is received, as it represents an increase in cash on hand.

  • Supplier A/c: This account is used when dealing with suppliers from whom goods or services are purchased on credit. It is unrelated to receiving cash from customers.

  • Bank A/c: This account is used when transactions involve banking activities, such as deposits or withdrawals from a bank account.

Therefore, the correct answer is: Customer A/c

Test: Principles of Accounting- 3 - Question 5
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What is the rule for real accounts?
Detailed Solution for Test: Principles of Accounting- 3 - Question 5
The rule for real accounts is to debit what comes in and credit what goes out. This means that when an asset is received by the business, the asset account is debited, and when an asset goes out of the business, the asset account is credited. This rule helps in determining the nature of real accounts and ensures accurate recording of transactions involving assets.
Test: Principles of Accounting- 3 - Question 6
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Which account is debited when salaries are paid?
Detailed Solution for Test: Principles of Accounting- 3 - Question 6
When salaries are paid, the account to be debited is Salaries A/c. Salaries paid is an expense (nominal account) and needs to be recorded on the debit side of the account. The corresponding credit entry will be made in the Cash A/c, as cash is going out of the business.
Test: Principles of Accounting- 3 - Question 7
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What is the purpose of the trial balance?
Detailed Solution for Test: Principles of Accounting- 3 - Question 7
The purpose of the trial balance is to verify the arithmetical accuracy of accounts. It ensures that the total of all debit balances equals the total of all credit balances, which helps in identifying any errors or discrepancies in the recording of transactions. The trial balance acts as a preliminary step before preparing the financial statements.
Test: Principles of Accounting- 3 - Question 8
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Which account is debited when office furniture is purchased?
Detailed Solution for Test: Principles of Accounting- 3 - Question 8
When office furniture is purchased, the account to be debited is Office Furniture A/c. Office furniture is an asset (real account) and needs to be recorded on the debit side of the account. The corresponding credit entry will be made in the Cash A/c, as cash is going out of the business.
Test: Principles of Accounting- 3 - Question 9
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What is the main characteristic of the double entry system?
Detailed Solution for Test: Principles of Accounting- 3 - Question 9
The main characteristic of the double entry system is the presence of dual aspects in every transaction. This means that every transaction has a debit aspect and a credit aspect, and the total of all debits must always equal the total of all credits. This characteristic ensures the accuracy of recording financial transactions and helps in maintaining the balance between the two aspects.
Test: Principles of Accounting- 3 - Question 10
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Which account is credited when rent is received?
Detailed Solution for Test: Principles of Accounting- 3 - Question 10

When rent is received, it increases the income of the business, and thus, the Rent Received A/c is credited. The cash coming into the business increases the asset, so Cash A/c is debited. According to the principles of accounting, the entry should be: Cash A/c (Debit) and Rent Received A/c (Credit). 

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