Bbaft

Which of the following is an essential function of a trial balance?

• • A) To calculate profit and loss

• • B) To verify that total debits equal total credits

• • C) To prepare a cash flow statement

• • D) To ensure that all assets are listed

When a transaction is recorded in the wrong account but the correct amount is posted, it is known as:

• A) Error of Principle

• B) Error of Commission

• C) Error of Omission

• D) Compensating Error

If a debit balance of ₹500 in the rent account is incorrectly recorded as ₹50, how would this error be rectified?

• A) Debit Rent Account by ₹450

• B) Credit Rent Account by ₹450

• C) Debit rentAccount by ₹50

• D) Credit rent Account by ₹50

The consistency principle in accounting implies that:

• • A) All businesses should use the same accounting policies

• • B) A business should change its accounting policies frequently

• • C) A business should use the same accounting policies over time

• • D) A business should disclose its accounting policies

In Tally software, the purpose of a ledger is to:

• • A) Record individual transactions in chronological order

• • B) Summarize and categorize all transactions related to an account

• • C) Prepare trial balances automatically

• • D) Manage inventory

Which of the following is a capital receipt?

• Interest earned from a bank deposit

• Sale of goods

• Proceeds earned from sale of a fixed asset

• Dividend earned

Contingent liabilities are shown in the financial statements as:

• • A) An expense on the income statement

• • B) A note in the financial statements

• • C) A deduction from assets

• • D) An addition to liabilities

Which statement about contingent assets is TRUE?

• • A) They are always recorded on the balance sheet

• • B) They are recognized only when the realization is certain

• • C) They must be recorded at fair value

• • D) They are not disclosed in the financial statements

The dual aspect concept is best reflected by which accounting equation?

• • A) Assets = Liabilities + Expenses

• • B) Assets = Liabilities + Owner’s Equity

• • C) Revenues = Expenses + Liabilities

• • D) Assets = Revenues + Liabilities

Which of the following is an example of a one-sided error?

• • A) A cash sale is recorded in the Sales Account but omitted from the Cash Account

• • B) Rent expense is incorrectly recorded as the Repairs expense

• • C) The purchase of equipment is recorded as the Purchases

• • D) Sales return is entered twice in the Sales Return Account