Tag: generally accepted accounting principles (gaap)

Questions Related to generally accepted accounting principles (gaap)

Book-keeping is an ________ of correctly recording of business transaction.

commercial applications generally accepted accounting principles (gaap) distinction between accounting and book-keeping distinction between book-keeping and accounting meaning and objectives of accounting

  1. Art and science

  2. Art

  3. Science

  4. Art or Science

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Correct Option: A
Explanation:

Book-keeping is that branch of knowledge which tells us how to keep a record of financial transaction. Book - keeping may be defined as the science and art of recording transactions in books so accurately and systematically that the true state of a business can be correctly ascertained. 

The work of a book keeper is ______ in nature.

commercial applications generally accepted accounting principles (gaap) distinction between accounting and book-keeping distinction between book-keeping and accounting meaning and objectives of accounting

  1. Analytical

  2. Clerical

  3. Executive

  4. Non-executive

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Correct Option: B
Explanation:

Book keeping is a process of recording the business transaction in specified set of books. All business transactions must be recorded in a book which is called journal.  
Book keeping does not involve interpreting and communication of financial information. 

The person who is recording the transaction is called book keeper. Its a clerical work only.

A business can not run without book keeping. 

commercial applications generally accepted accounting principles (gaap) distinction between accounting and book-keeping distinction between book-keeping and accounting meaning and objectives of accounting

  1. True

  2. False

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Correct Option: B
Explanation:

Book keeping is a systematic records of transaction however there are certain limitations such as book keeping doesn't follow the principle of double entry system moreover it is based on cash basis of accounting  but not made on an accruals basis so it is not necessary for a firm to use book keeping it can run without book keeping. 

Importance and utility of Book-keeping is _________ .

commercial applications generally accepted accounting principles (gaap) distinction between accounting and book-keeping distinction between book-keeping and accounting meaning and objectives of accounting

  1. Help in future reference

  2. Knowledge about Financial status

  3. Help in comparison

  4. All of the above

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Correct Option: D
Explanation:

Bookkeeping is the organization of financial information. Keeping your financial records organized makes it easier to locate and provide to appropriate parties. Bookkeeping is important because it helps with business analysis. It is a tool used by management to analyze business performance. It helps in taking the financial decision and comparison between the two firm also.

Book keeping is necessary only for organising with profit objective.

commercial applications generally accepted accounting principles (gaap) distinction between accounting and book-keeping distinction between book-keeping and accounting meaning and objectives of accounting

  1. True

  2. False

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Correct Option: B
Explanation:

Book keeping is the recording, on day to day basis, of the financial transactions and informations pertaining to a business. Essentially, book keeping means recording and tracking the numbers involved in the financial side of the business in a organized way. It is essential for business, but it is also useful for individuals and  non-profit organizations. 

Book keeping records monetary transactions only. 

commercial applications generally accepted accounting principles (gaap) distinction between accounting and book-keeping distinction between book-keeping and accounting meaning and objectives of accounting

  1. True

  2. False

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Correct Option: B
Explanation:

Money measurement concept says that only those transactions are recorded in the books of account which has the monetary value. 

Therefore only transactions which have the monetary value to be recorded in books. 
If there is money, there is accounting. No Money No accounting.

______ is an activity concerned with the recording of financial data relating to business operations in significant and orderly manner.

commercial applications generally accepted accounting principles (gaap) distinction between accounting and book-keeping distinction between book-keeping and accounting meaning and objectives of accounting

  1. Accounting

  2. Book keeping

  3. Auditing

  4. Vouching

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Correct Option: B
Explanation:

Book keeping is the recording of financial transactions, and is part of the process of accounting in business. It is a process concerned with recording of transactions. Book keeping is mainly concerned with financial data recording. Book keeping refers mainly to the record keeping aspects of accounting. book keeping involves preparing source documents for all transactions, operations, and other events of the business.

________ is the recording phase of Accounting system.

commercial applications generally accepted accounting principles (gaap) distinction between accounting and book-keeping distinction between book-keeping and accounting meaning and objectives of accounting

  1. Book keeping

  2. Ledger posting

  3. Balancing

  4. Accounting

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Correct Option: A
Explanation:

All financial transactions must be recording in the books of accounts of the business. Recording of transaction is the first steps in the accounting system. If any expense is incurred, this has to be recorded first to initiate the accounting process.

Book keeping is mainly concerned with which of the following features?

commercial applications generally accepted accounting principles (gaap) distinction between accounting and book-keeping distinction between book-keeping and accounting meaning and objectives of accounting

  1. It is concerned with financial data recording.

  2. It is concerned with designing the systems of recording, classifying and summarizing the recorded data.

  3. It is concerned with data interpreting for internal and external users.

  4. all of the above

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Correct Option: A
Explanation:

Book keeping and accounting terms are normally used as interchangeably but actually this is not the case. Book keeping is basically concerned with recording of a transaction in books of account of any business. It is to be noted that only financial data are to be recorded.

Which of the following is not dependent on accounting?

commercial applications generally accepted accounting principles (gaap) distinction between accounting and book-keeping distinction between book-keeping and accounting meaning and objectives of accounting

  1. Management accounting

  2. Cost accounting

  3. Financial accounting

  4. Book-keeping

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Correct Option: D
Explanation:

Book Keeping and Accounting are two different terms which are often used interchangeably. 

Book keeping is a method of recording all the business transactions. This work is normally performed by the junior executive. 
Accounting is a term which analyze and interpret the data which are recorded in the books of accounts through book keeping. 

Accounting starts when book keeping ends hence book keeping is not dependent on accounting.