Commerce Accountancy · Economics

Journal Entries and Depreciation

650 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

For mutual accommodation, A accepted a bill of 2 months for Rs. 10,000 drawn on him by B. B discounted the bill at 12% p.a. Out of the proceeds, A receives

  1. Rs. 9,800

  2. Rs. 8,100

  3. Rs. 4,900

  4. Rs. 5,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Mutual accommodation means both the persons will receive half the amount, i.e. 10,000. Charges for discounting = 12% per annum We need to find for 2 months, which will come out to be Rs. 200. Rs. 200 will also be divided equally as charges. Therefore, B's receivables will be 5,000 - 100 = 4,900.

Multiple choice

The term loan of Rs. 50,00,000 was received from IFCI. It was used as under

(i) Rs. 20,00,000 was advanced to supplies for capital work-in-progress (ii) Rs. 30,00,000 was used for financing the working capital

Choose the correct option.

  1. Both (i) and (ii) are capital expenditures.

  2. (i) is capital expenditure and (ii) is revenue expenditure.

  3. Both (i) and (ii) are revenue expenditures.

  4. (i) is deferred revenue expenditure and (ii) is capital expenditure.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Any capital expenditure will be debited under capital account, and all the day to day expenditures will be debited as revenue expenditure.

Multiple choice

Rs. 4,500 is paid to Rohan as salary for the month of December 2012, which was debited from his account. This is an error of _____.

  1. principle

  2. omission

  3. commission

  4. compensation
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The errors which are committed while recording or posting a transaction are called errors of commission. Such errors include posting wrong amounts, posting on wrong side of accounts or posting in wrong accounts, wrong totaling or carrying forward, and wrong balancing. 

Multiple choice

On 31st March, 2011, the books of Ajit showed a net profit of Rs. 84,000. Later it was discovered that the closing stock was over valued by 4,000 and the discount received of Rs. 1,500 was treated as an expense. What was the correct net profit of Ajit?

  1. Rs. 81,500

  2. Rs. 83,000

  3. Rs. 89,500

  4. Rs. 91,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

84,000 - 4,000 + 1,500 (Not recorded as profit) + 1500 (because it was rated as an expense). Therefore, the amount of 1,500 discount will be added two times = Rs. 83,000

Multiple choice
Total sales 90,000
Cash sales 20,000
Opening debtors 20,000
Cash received from debtors 20,000
Bad debts 3,000
Return inward 1,000
Bills received from customers 10,000

Debtors at the end will be

  1. 56,000

  2. 50,000

  3. 40,000

  4. 65,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
Particulars Debit Particulars Credit
Balance b/d 20,000 By cash 20,000
credit sales 70,000 By bad debts 3,000
    By Return Inwards 1,000
    By B/R 10,000
    By balance c/d (b/f) 56,000
Multiple choice

From the following information, find the amount to be debited to Profit & Loss Account for the period ending 31-03-2014. Provision for doubtful debts - Rs. 800 (on 01-04-2013) Debtors on 31-03-2014 - Rs. 40,000 Bad debts - Rs. 2,000 Bad debts are to be written off and provision for doubtful debts is to be created at the rate of 5% on debtors.

  1. Rs. 3,100

  2. Rs. 4,000

  3. Rs. 3,200

  4. Rs. 3,900
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Provision for bad debts a/c:   ||||| |---|---|---|---| |Particulars|Debit|Particulars|Credit| |To Bad debts|2,000|Balance b/d|800| | | |By P & l (b/f)|3100| |To balance c/d|1900| | |

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns prepration of income and expenditure account accounting treatment for npo's special issues associated with accounts of non-trading concerns receipts and payments receipts and payments account financial accounting and reporting accounting procedure for not-for-profit organisations balance sheet, classification of assets and liabilities accounting records of not-for-profit organisations prepration of income and expenditure account and balance sheet

Given : Stock of stationery on Jan. 1, 2015 Rs 200; payments for stationery during 2015 Rs 1,000; and stock of stationery on Dec. 31, 2015 Rs 50.
What will be the amount posted to Income and Expenditure A/c for the year ending Dec. 31, 2015?

  1. Rs 750

  2. Rs 850

  3. Rs 1,150

  4. Rs 1,250
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Stationery amount to be shown in income & expenditure account can be calculated using the formula given below:

$Stationery\quad amount=\quad Opening\quad stock-Closing\quad stock+Payments\quad made$
Substitute values in the above equation
$Stationery\quad amount=\quad Rs200-Rs50+Rs1000\quad =Rs1,150$.

Multiple choice elements of book keeping and accountancy accounting from incomplete records ascertaining profit or loss from incomplete records meaning and preparation of statement of profit meaning of incomplete records, reasons for incompleteness and its limitations preparation of final accounts from incomplete records preparation of statement of affairs introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

Kumar and Shanu-entered into a joint venture to purchase and sell new year gifts. They agreed to share the profit and losses equally. Kumar purchased goods worth Rs. 1,00,000 and spent' Rs. 10,000 in sending the goods to Shanu. He also paid Rs. 5,000 for insurance. Shanu spent Rs. 10,000 as selling expenses and sold goods for 2,00,000. Remaining goods Were taken over by him at Rs. 5,000. What will be the amount to be remitted by Shanu to Kumar as final settlement?

  1. Rs. 1,55,000

  2. Rs. 1,50,000

  3. Rs. 1,15,000

  4. Rs. 80,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Kumar's total investment: 1,00,000 + 10,000 + 5,000 = 1,15,000. Shanu's sales: 2,00,000 + 5,000 = 2,05,000. Total profit: 2,05,000 - 1,15,000 - 10,000 (Shanu's expenses) = 80,000. Profit share: 40,000 each. Shanu owes Kumar: 1,15,000 (Kumar's cost) + 40,000 (Kumar's profit) - 0 (Kumar's share of sales) = 1,55,000.

Multiple choice elements of book keeping and accountancy accounting from incomplete records ascertaining profit or loss from incomplete records meaning and preparation of statement of profit meaning of incomplete records, reasons for incompleteness and its limitations preparation of final accounts from incomplete records preparation of statement of affairs introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

Rs. 19,500 debited to building repairs on 31 st Dec. 1993 inclined Rs. 9,500 as the cost of building a small room for the watch man. A bill of Rs. 800 for colour wash of the whole building during the year was not received till  Dec. 1993. The amount to be debited to profit and loss account would be _____________.

  1. Rs. 20,300

  2. Rs. 19,500

  3. Rs. 10,800

  4. Rs. 9,500
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The cost of building a room (9,500) is a capital expenditure, not a repair expense. Total repairs = 19,500 - 9,500 = 10,000. Adding the outstanding bill of 800 for colour wash, the total amount to be debited to P&L is 10,000 + 800 = 10,800.