Commerce Accountancy · Economics

Journal Entries and Depreciation

596 Questions

Journal entries and depreciation are core accountancy topics involving the systematic recording of financial transactions and the calculation of asset value reduction over time. Students must solve problems related to bad debts, provision calculations, and error rectification. These questions are essential for candidates appearing in commerce and accounting competitive exams.

Bad debts provisionAsset depreciation calculationPurchase return errorsTrial balance rectificationDebenture issuance

Journal Entries and Depreciation Questions

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions understand the method of recording cash transactions simple cash boook meaning, features and types of cash book

____________recorded in cash book.

  1. Rs. 5000 received from Rahul

  2. Rs. 6500 paid to Gopal

  3. Loan of Rs. 51000 taken from Bank

  4. All of three
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The cash book records all cash receipts and cash payments, including loans taken in cash.

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions understand the method of recording cash transactions simple cash boook meaning, features and types of cash book

Which of these will not be recorded in cash book/account?

  1. Two months rent of Rs. 5000 paid in advance

  2. One year insurance premium Rs.9000 paid in advance

  3. Goods purchased on 3 months credit

  4. Goods worth Rs. 5900 sold cash
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The cash book only records cash transactions. A credit purchase does not involve an immediate cash flow, so it is recorded in the purchase journal, not the cash book.

Multiple choice elements of accounts subsidiary books - 2 understand the method of recording cash transactions simple cash boook recording and posting of cash transactions

Withdrawl column of the Pass Book showed a wrong entry of Rs. 112. When the balance as per Cash Book is the starting point __________.

  1. Rs. 112 to be added

  2. Rs. 112 to be subtracted

  3. No adjustment in required

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

If the pass book shows a withdrawal that did not occur (or was recorded incorrectly), the pass book balance is lower than it should be. To reconcile with the cash book, you must subtract the error from the cash book balance.

Multiple choice elements of accounts subsidiary books - 2 understand the method of recording cash transactions simple cash boook recording and posting of cash transactions

A debit balance of Rs. 1,000 has been brought forward as a credit balance of Rs. 100 on the next page in the Pass Book. To ascertain the balance as per Cash Book _______________________.

  1. Rs. 900 should be added to the balance as per Cash Book.

  2. Rs. 900 should be subtracted from the balance as per Pass Book

  3. Rs. 1,100 should be added to the balance as per Pass Book

  4. None of the above.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A debit balance of 1000 brought forward as a credit balance of 100 is an error of 1100. The reconciliation requires adjusting for the difference in the pass book to match the cash book records.

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

You have Rs. 1500 in your savings account at the beginning of the month.the record below shows all of your transactions during the month.How much money is in your account after these transactions?

Date Withdrawal Deposit
4/9/14 Rs 1200 Rs 2000
22/9/14 Rs. 2100 Rs.2500
  1. $Rs.\ 2000$
  2. $Rs.\ 3100$
  3. $Rs.\ 2500$
  4. $Rs.\ 2700$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

We have, Amount of money in savings account at the beginning of the month =Rs.1500
Total amount of money withdrawal Rs 1200+2100=Rs.3300
Total amount of money deposited =Rs(2000+2500)=Rs.4500
So, total amount of money after transactions=Rs (1500-3300+4500)=Rs.2700 

Multiple choice elements of book keeping and accountancy accounting in business develop the understanding of recording of transactions in journal illustrations on journal entries types of journal entries meaning and classification of business transactions

When the claim on account of loss of stock is partly accepted by the insurance company, the journal entry will be _________________________.

  1. Insurance Claim A/c Dr.

    Profit and loss A/c Dr.

    To Trading A/c

  2. Insurance Claim A/c Dr.

    To Trading A/c

  3. Insurance Claim A/c Dr.

    To Profit and loss A/c

  4. Insurance Claim A/c Dr.

    Trading A/c

    To Profit and loss account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When a claim is partly accepted, the amount accepted is debited to the Insurance Claim account, the loss not covered is debited to the Profit and Loss account, and the total value of the lost stock is credited to the Trading account.

Multiple choice elements of book keeping and accountancy accounting in business develop the understanding of recording of transactions in journal illustrations on journal entries types of journal entries meaning and classification of business transactions

What will be the necessary adjusting closing entry for the following adjustment as on $31^{st}$ March, $2005$. Insurance paid $Rs. 4,000$ (including premium of $Rs. 3,000$ per annum paid upto $30^{th}$ June, $2005$________________________.

  1. Insurance prepaid A/c Dr. $Rs. 750$

    To Insurance A/c $Rs. 750$
  2. Insurance A/c Dr. $Rs. 750$

    Insurance prepaid A/c $Rs. 750$
  3. Insurance A/c Dr. $4000$

    To cash A/c $4000$
  4. Insurance A/c Dr. $3000$

    To cash A/c $3000$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The total insurance is 4000. The premium for the period from April 1 to June 30 (3 months) is prepaid. Calculation: (3000 / 12) * 3 = 750. The entry to record the prepayment is to debit Prepaid Insurance and credit the Insurance expense account.

Multiple choice elements of book keeping and accountancy accounting in business develop the understanding of recording of transactions in journal illustrations on journal entries types of journal entries meaning and classification of business transactions

In certain jobs, for example, hotels farms, hospitals, the employees are given the facility of residing in a house free of rent or they are given meals or clothes, water etc. A transfer of the proportionate amount is essential to salaries or wages account. Entry for this is ________________.

  1. Meals A/c Dr.

    Water A/c Dr.

    Apartment A/c Dr.

    To Salaries or Wages A/c

  2. Salaries or Wages A/c Dr

    To Meals A/c

    To water A/c

    To Apartment A/c

  3. Cash A/c Dr.

    To Meals A/c

    To Water A/c

    To Apartment A/c

  4. Meals A/c Dr.

    Water A/c Dr.

    Apartment A/c Dr.

    To Cash A/c
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When employees receive benefits in kind, the cost is treated as part of their salary. Therefore, the Salaries/Wages account is debited, and the individual expense accounts (Meals, Water, Apartment) are credited to remove these costs from their respective expense categories.

Multiple choice elements of book keeping and accountancy accounting in business develop the understanding of recording of transactions in journal illustrations on journal entries types of journal entries meaning and classification of business transactions

Goods worth Rs. $10,000$ were purchased by B on which the traders allowed Rs. $500$ trade discount and offer to give $5\%$ cash discount if immediate payment is made. The Purchase A/c will be debited by _________.

  1. Rs. $10,000$
  2. Rs. $9,800$
  3. Rs. $9,000$
  4. Rs. $9,500$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Discount are two types , trade discount and cash discount. 

Trade discount is allowed on the list price hence amount of trade discount is not reflected in books of account. 
Net price i.e. after deducting trade discount is only recorded in the books of account. 

Purchase Price                Rs.10000
Less: Trade Discount       Rs.500
Net Purchase Price         Rs.9500

Hence, Purchase account will be debited by Rs.9500.

Multiple choice elements of book keeping and accountancy accounting in business develop the understanding of recording of transactions in journal illustrations on journal entries types of journal entries meaning and classification of business transactions

Which of the following are not errors of principle?
(i) Motor expenses entered in Motor Vehicles account.
(ii) Purchases of machinery entered in Purchases account.
(iii) Sales of Rs. 250 to Varun completely omitted from books.
(iv) Sales to a Varun entered in Amit's account.

  1. (i) and (iv)

  2. (ii) and (iii)

  3. (i) and (ii)

  4. (iv) and (iii)
Reveal answer Fill a bubble to check yourself
A,C Correct answer
Multiple choice elements of book keeping and accountancy accounting equation explain the concept of accounting equation usefulness of an accounting equation accounting equations and transactions

The outside liabilities of a business are Rs. $20,000$. The proprietor's capital is Rs. $50,000$. Total assets of the firm are worth ___________.

  1. Rs. $50,000$
  2. Rs. $30,000$
  3. Rs. $70,000$
  4. Rs. $20,000$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The accounting equation is Assets = Capital + Liabilities. Here, Assets = 50,000 (Capital) + 20,000 (Liabilities) = 70,000.

Multiple choice elements of book keeping and accountancy accounting equation explain the concept of accounting equation usefulness of an accounting equation accounting equations and transactions

On 31st Dec. 2006 assets of the business are Rs.3,00,000 and its capital is Rs.1,00,000. Its liabilities on that date will be __________.

  1. Rs. $4,00,000$
  2. Rs. $2,00,000$
  3. Rs. $1,00,000$

  4. none of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Using the accounting equation Assets = Capital + Liabilities, we have 3,00,000 = 1,00,000 + Liabilities. Therefore, Liabilities = 3,00,000 - 1,00,000 = 2,00,000.

Multiple choice elements of book keeping and accountancy accounting equation explain the concept of accounting equation usefulness of an accounting equation accounting equations and transactions

Suppose P start a business with $Rs. 50,000$ cash and then buys furniture from F.F. Co. on credit for $Rs. 2,000$. Now, the accounting equation
$Assets = Capital + Liabilities$ will be __________________.

  1. $52,000 = 50,000 + 2,000$
  2. $50,000 = 50,000 + 0$
  3. $50,000 = 48,000 + 2,000$
  4. $48,000 = 50,000 - 2,000$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Initially, Assets (50,000) = Capital (50,000). After buying furniture on credit, Assets increase by 2,000 (furniture) and Liabilities increase by 2,000. The new equation is 52,000 = 50,000 + 2,000.

Multiple choice elements of book keeping and accountancy accounting equation explain the concept of accounting equation usefulness of an accounting equation accounting equations and transactions

X started business with a capital of $Rs. 2,00,000$ and purchased goods worth $Rs. 20,000$ on credit. These transactions may be expressed in the form of 'Accounting Equation' such as___________. 

  1. $Rs. 2,20,000 = Rs. 2,00,000 + Rs. 20,000$
  2. $Rs. 2,20,000 = Rs. 2,00,000 - Rs. 20,000$
  3. $Rs. 20,000 = Rs. 2,00,000 - Rs. 2,00,000$
  4. $Rs. 2,20,000 = 0 + Rs. 2,20,000$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Starting capital is 2,00,000. Purchasing goods on credit increases assets (stock) by 20,000 and increases liabilities (creditors) by 20,000. Total assets = 2,20,000; Capital = 2,00,000; Liabilities = 20,000. Thus, 2,20,000 = 2,00,000 + 20,000.

Multiple choice elements of book keeping and accountancy accounting equation explain the concept of accounting equation usefulness of an accounting equation accounting equations and transactions

A business entity has assets of $Rs. 2,60,000$ and liabilities of $Rs. 60,000$. Owner's equity in this case is__________. 

  1. $Rs. 3,20,000$
  2. $Rs. 2,60,000$
  3. $Rs. 2,00,000$
  4. $Rs. 60,000$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Owner's equity = Assets - Liabilities. 2,60,000 - 60,000 = 2,00,000.