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Accounting Basics

 1) The golden rule for the Nominal account  is --------------. 
Answer  ::   Debit all expense and losses & Credit all incomes and gains

 2)  According to -------------- principle a business is treated as a separate entity that is distinct from  its owner. 
Answer  ::   Business Entity Concept

 3) According to -------------- principle only those  transactions which are capable of being expressed in terms of  money are included in the accounting records. 
Answer  ::   Money Measurement Concept

 4)  According to ------------- principle the  enterprise is normally viewed as a going concern that is, continuing in operation for the foreseeable  future.  
Answer  ::   Going concern  principle

 5) The Going concern concept  is also known as -------------. 
Answer  ::   Continuity assumption

 6) According to ---------------- principle  revenues and costs are recognized as they are earned or incurred. 
Answer  ::   Accrual principle

 7) Accrual  principle  is  also known as ------------. 
Answer  ::   Revenue  recognition principle

 8)  According to ------------- principle the  expenses incurred in an accounting period should be matched  with the revenues recognized in that period.
Answer  ::   Matching principle

 9)  According to ------------- principle the  accounting data should be definite, verifiable and free from  personal bias of the accountant. 
Answer  ::   Objectivity principle

 10) ----------------- assumed that  accounting policies are consistent from one period to another. 
Answer  ::   Consistency concept

 11)  Trading account shows ------------- profit. 
Answer  ::   Gross Profit

 12)  Profit and Loss account shows -------------- profit. 
Answer  ::   Net Profit

 13)  Balance Sheet is also  known as -----------------. 
Answer  ::   Position statement

 14) The Balance Sheet is a ------------- but not an -------------. 
Answer  ::   Statement, Account

 15) ------------- is one which is not an actual liability but which may become  one on the happening of some uncertain future event. 
Answer  ::   Contingent Liability

 16)  Sales – Cost of Goods sold = -----------------. 
Answer  ::   Gross Profit

 17) Gross Profit – Operating expenses = -------------------. 
Answer  ::   Operating Profit

 18)  Operating profit + Non operating incomes – non operating expenses = ------------. 
Answer  ::   Net profit

 19) Accounting is defined as ----------------. 
Answer  ::   An art of recording, classifying, summering in a significant manner and  in terms of money, transactions and events which are in part at  least, of financial nature and interpreting the results thereof.

 20) The basic sequence in the accounting process can best be  described as -------------. 
Answer  ::   Transactions, Source document,  Journal, Ledger, Trial balance