Top 25 Questions and Answers- Accounts [Notes with PDF]

Today, we will learn the Top 25 Questions and Answers-Accounts. If you read it from top to bottom with a proper emphasis, you’ll get a basic idea of the accounts.

It will also enhance your accounting knowledge and help you do well on any competitive test.

So let’s get started.

Questions and Answers- Accounts

Question-01: What is an account?

Answer: An account is a summary record of all transactions relating to a particular account, institution, property, income, or expenditure arranged by accounting rules under an appropriate heading.

Question-02: What is the necessity of recording accounts?

Answer: The necessity of recording accounts are as follows:

  • Determining Cash Balance
  • Application of double entry system
  • Justify arithmetical accuracy of accounts
  • Determining Financial position
  • Aid to prepare financial statement.
  • Helping in assessing tax.

Question-03: How many types of accounts tables are used in accounting? And what are they?

Answer: Two types of accounts tables are used in accounting. Which are as follows:

  • T-Table
  • Moving Balance Table

Question-04: What are the features of the “T “Table?

Answer: The features of the “T “table are

  • There will be an account title,
  • The table has two sections: Debit & Credit.
  • Four columns out of eight columns on both sides
  • Accounts should calculate the balance of accounts (the difference between total debit and total credit) after a specific period interval.
  • Each account should have a code number.

Question-05: What are the features of the Moving Balance Table?

Answer: The features of the “Moving Balance “table are

  • There will be an account title,
  • Each account should have a code number.
  • For date, description & journal folio (J.F.), one column each.
  • It has four columns in total for the amount.
  • Debit & credit amount column, side by side,
  • It calculates the balance of accounts after posting each transaction.

Question-06: How many methods are there for the classification of accounts? And what are they?

Answer: There are two methods for the classification of accounts. Which are as follows:

  • Traditional Method and
  • Modern or Equation Method.

Question-07: What are the advantages of the classification of accounts?

Answer: The advantages of classification of accounts areas:

  • After the account classification, It is effortless to determine the debit and credit aspects of transactions.
  • It is easy to calculate the accounting unit’s financial results (i.e. income & expenditure or trading and profit & loss accounts).

Question-08: What is the format of the account?

Answer: The format which is used to record by summarizing the same class of transactions under the appropriate heading is called the format of the account.

Question-09: What is a personal account?

Answer: An account relating to a person or institution is called a personal account—for example, Harry A/C, Potter A/C, ABC International A/C, etc.

Question-10: How many types of personal accounts are there, and what are they?

Answer: There are two (2) types of personal accounts. Which are as follows:

Question-11: What is Debtor Account?

Answer: The personal accounts from whom the concern or accounting units are entitled to receive money are called debtor account.

Question-12: What is a creditor account?

Answer: The personal accounts to whom money is to be paid by the concern or accounting unit are called creditor account.

Question-13: What is an impersonal account?

Answer: An account that does not relate to any person or institution, but rather to a property, income, or expenditure is called an impersonal account—for example, Machinery A/C, Salary A/C, Commission A/C, etc.

Question-14: What is a real or property account?

Answer: An account relating to a property is called a real or property account—for example, Land A/C, Building A/C, Furniture A/C, etc.

Question-15: What is the nominal account?

Answer: An account relating to an income or expenditure is called a nominal account—for example, Salary A/C, Discount Allowed A/C, etc.

Question-16: What is an asset account?

Answer: The account kept in classifying the transactions for which the assets increase or decrease is called an asset account—for example, Bank A/C, Cash A/C, Building A/C, etc.

Question-17: What is a liability account?

Answer: The account kept classifying the transactions for which liability increases or decreases is called liability account. For example, Accounts Payable A/C, Capital A/C, Loan A/C, etc.

Question-18: What is an expenditure account?

Answer: The account kept under different heads classifying the various expenditures of a business or institution is called an expenditure Account—for Example, Wages A/C, Purchase A/C, Gas Bill A/C, etc.

Question-19: What is an income account?

Answer: The accounts kept under different heads having classified the transactions relating to income properly, are called income account. For Example, Sales A/C, Commission Received A/c, Service Revenue A/C, etc.

Question-20: What is the owner’s equity account?

Answer: Owners equity means owner claim over assets. The account which represents the owner’s claim is called the owners’ equity account.

Question-21: What is the full form of Dr. and Cr.?

Answer:

Dr. = Debit

Cr. = Credit

Question-22: What is debit?

Answer: When the value comes in, or the asset increases are called a debit.

Question-23: What is Credit?

Answer: When the value goes out, or the asset decreases is called credit.

Question-24: What is Balance?

Answer: The difference between the total amount of debit and credit of an account is called balance.

Question-25: What is the balancing of the account?

Answer: Balancing of the account is the process of finding the balance between the debit and credit sides of an account at the end of a specific period.

I hope you understand the concepts of the accounts at the end of the article. Read these Top “25” Questions and Answers- Accounts regularly and strengths your accounting skill.

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