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 book keeping and accountancy analysis of financial statements financial statement of company rules for recording in journal dual effect of transactions, types of accounts and rules of debit and credit

Mr. Bhandari purchased a car for Rs. 50,000, making a down payment of Rs. 10,000 and signing a Rs. 40,000 bill payable due in 60 days. As a result of this transaction ___________________.

  1. Total assets increased by Rs. 50,000

  2. Total liabilities increased by Rs. 40,000

  3. Total assets increased by Rs. 40,000

  4. Total assets increased by Rs.. 40,000 with corresponding increase in liabilities by Rs. 40,000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The total asset (car) increases by 50,000. Cash (an asset) decreases by 10,000, and a liability (bills payable) increases by 40,000. The net increase in assets is 40,000 (50,000 - 10,000), which matches the increase in liabilities.

Multiple choice book keeping and accountancy analysis of financial statements financial statement of company rules for recording in journal dual effect of transactions, types of accounts and rules of debit and credit

Outstanding business rent of Rs.$15,000$ was paid by the proprietor from his purse. The effect on the balance sheet is that ________________.

  1. both liabilities and assets are increased

  2. both liabilities and assets are decreased

  3. liabilities are increased, while the assets are decreased

  4. liabilities are decreased, while the assets are increased
Reveal answer Fill a bubble to check yourself
C Correct answer
Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

A bill of Rs. 20,000 for old office furniture sold to Sethi was entered in the Sales Day Book Which of the following rectification entry is correct?

  1. Suspense A/c Dr. 20,000

    To Office Furniture A/c 20,000

  2. Sales A/c Dr. 20,000

    To Office Furniture A/c 20,000

  3. Office Furniture A/c Dr. 20,000

    To Suspense A/c 20,000

  4. Office Furniture A/c Dr. 20,000

    To Sates A/c 20,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The sale of old furniture is not a credit sale of goods, so it should not be in the Sales Day Book. To rectify, we must reverse the entry in Sales (debit) and record it correctly in the Furniture account (credit).

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Sales book was overcast by Rs. 20,000. If this error located after preparation of trial then which of the following rectification entry is correct? 

  1. Suspense A/c Dr. 20,000

    To Sales A/c 20,000

  2. Sales A/c Dr. 20,000

    To Suspense A/c 20,000

  3. Profit & Loss Adj. A/c Dr. 20,000

    To Sales A/c 20,000

  4. Sales A/c Dr. 20,000

    To Profit & Loss Adj. A/c 20,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

If the Sales book was overcast, the sales account was credited with an excess amount. To rectify this after the trial balance, we debit the Sales account and credit the Suspense account.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Goods sold on credit basis to A Brothers for Rs 1,000 will be entered in _____________.

  1. Cash Book

  2. Journal Proper (General Journal)

  3. Sales Book

  4. Bills Receivable Book
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Credit sales of goods are recorded in the Sales Book. Cash sales go to the Cash Book, and non-goods credit transactions go to the Journal Proper.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

While checking the accounts of ABC the following discrepancies were noticed, even though the trial balance was made to balance by putting the difference to Suspense A/c.
(i) Sales day book for the month of June was found overcast by Rs. 7,000.
(ii) A credit purchase of Rs. 3,000 was omitted to be recorded in the purchase day book.
(iii) Rs. 4,300 received from A credited to A A/c 3,400. (iv) Purchase of Office Equipment worth 25,000 included in trading purchases.
From the above details what would have been the difference in Trial Balance which was made to balance by opening Suspense A/c.

  1. Debit side short by 9,100

  2. Credit side short by 29,100

  3. Debit side more by 7,900

  4. Credit side more by 6,100
Reveal answer Fill a bubble to check yourself
A Correct answer
Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

A company sent their cars to dealers on sale or return basis. All such transactions are however treated like actual sales and are passed through a sales day book. Just before the end of the financial year two cars which costs Rs 50000 each have been sent on 'sale return' and have been debited to customers at Rs 60000 each, cost of goods lying with the customers will be _______________.

  1. Rs 100000

  2. Rs 120000

  3. Rs 60000

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

Cost of cars is Rs 50000 each so the cost of goods lying with the customers will be 100000.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Rs. 5,000 received from Ram on 1.1.09 for the old furniture sold to him on 1.06.08 which of the following entry should be passed for recording the transaction in the books of accounts?

  1. Cash A/c Dr.

    To furniture A/c 5,000

  2. Cash A/c Dr. 5,000

    To suspense 5,000

  3. Cash A/c Dr. 5,000

    To bad-debits recovered A/c 5,000

  4. Cash A/c Dr. 5,000

    To Ram A/c 5,000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Since the furniture was sold to Ram on credit previously, the amount received from him should be credited to his account to settle the debt. The cash received is debited to the Cash account.

Multiple choice elements of accounts sub-division of journal - 2 (subsidiary books) sales book or sales journal introduction, meaning, types and advantages of subsidiary books meaning and types of subsidiary books

Following are the sales return of Jindal & Co. a saree dealer:
05.01.2016 - Goyal & Co. Rampur returned 2 Polyster sarees @ 125 each
10.01.2016 - Accepted return of goods by Garf & Co. 2 Kota sarees @ 50 
17.01.2016 - Mittal & Co. Hissar returned 2 silk sarees @ 325
31.01.2016 - Mohan returned one typewriter @ 500
Total of sales returns book will be _____.

  1. Rs.900

  2. Rs.800

  3. Rs.1000

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

Particulars | Credit Note No. | L.F. | Amount | | --- | --- | --- | --- | --- | | 5th Jan 2016 | Goyal & Co. Rampur returned 2 Polyster sarees @ 125 each |   |   | 250 | | 10th Jan 2016 | Return of goods by Garf & Co. 2 Kota sarees @ 50   |   |   | 100 | | 17th Jan 2016 | Mittal & Co. Hissar returned 2 silk sarees @ 325 |   |   | 650 | | 31st Jan 2016 | No Entry |   |   | - | |   | Total of Sales Return book |   |   | 900 |

Multiple choice book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

Debit balance as per Cash Book of ABC Enterprises as on 31st March is Rs. 3,000. Cheques deposited but not cleared amounts to Rs. 200 and Cheques issued but not presented of Rs. 300. The bank allowed interest amounting Rs. 100 and collected dividend Rs. 100 on behalf of ABC Enterprises. Balance as per pass book should be __________ .

  1. Rs. 3,200

  2. Rs. 2,900

  3. Rs. 3,700

  4. Rs. 3,300
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Bank reconciliation statement of ABC Ltd.
Balance as per cash book                                             =    3000 
Add:- Cheques issued but not presented                    =      300
         Dividend collected on behalf of ABC LTD          =       100
          Interest allowed by bank                                    =        100

Less:- Cheques deposited but not cleared                  =     (200)
          
Balance as per Passbook                                              =     3300
Multiple choice book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

From the following information calculate balance as pass book.
- Balance as per cash book (Dr.) $1,900$
- Cash deposited in bank for Rs. $100$ entered in cash book as $Rs.90$
- Transfer to wife's bank account not entered in cash book $Rs.1,500$
- Bank charges not recorded in cash book $Rs.20$
- Standard order payment $Rs.30$

  1. Rs. $440$
  2. Rs. $260$
  3. Rs. $3,320$
  4. Rs. $360$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The reconciliation is as follows :

   Particulars Amount in Rs. 
   Balance as per cash book (Dr.) $1900$ 
 Add Cash deposited in bank and less amount entered in cash book   $10$ 
 Less Transfer to saving account not entered in cash book  $1500$ 
 Less Bank charges not recorded in cash book  $20$ 
 Less Stand order payment by bank  $30$ 
   Balance as per pass book (Cr.) $360$
Multiple choice book keeping and accountancy bills of exchange renewal of the bill retirement and renewal of a bill accounting treatment of bill transaction

X draws a bill of exchange of Y for $Rs. 20,000$ payable in $4$ months. On the due date Y could not make the payment and requested X to renew a fresh bill for another three months at $12$% interest p.a. The amount of fresh bill will be ____________.

  1. $Rs. 20800$
  2. $Rs. 20400$
  3. $Rs. 22400$
  4. $Rs. 21300$
Reveal answer Fill a bubble to check yourself
A Correct answer
Multiple choice book keeping and accountancy bills of exchange renewal of the bill retirement and renewal of a bill accounting treatment of bill transaction

S draws 2 bills of exchange on 1.1.06 for Rs. 3,000 and Rs. 10,000 respectively . The bill of exchange for Rs. 3,000 is for 2 months, while the bill of exchange for Rs. 10,000 is for 3 months. These bills are accepted by K. On 4.3.06 K requests S to renew the first bill with interest at 18% p.a for a period of 2 months. S agrees to this proposal. On 20.3.06 K retires the acceptance for Rs. 10,000 the interest rebate, i.e., discount being Rs. 50.
Before the due date of the renewed bill K becomes insolvent and only 60 paise in a rupee can be recovered from his estate. How much bed debt will be recorded in the books of S?

  1. RS. 1,236

  2. Rs. 1,854

  3. Rs. 3,090

  4. Rs. 3,000
Reveal answer Fill a bubble to check yourself
A Correct answer