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 commercial studies subsidiary books - 2 three column cash book three columnar cash book triple column cash book

Over draft as per cash book of B & Co. was Rs 30,000. A comparison of passbook and cashbook revealed the following:

  • The credit side of bank column of cash book was undercast by Rs 100
  • Interest on bank loan Rs 2,000 and bank charges of Rs 575 were not recorded in cash book.
Overdraft balance as per pass book should be ____________.

  1. Rs 32,675

  2. Rs 27,325

  3. Rs 28,675

  4. Rs 28,475
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Starting with cash book overdraft (30,000): Add undercast (100); add bank charges/interest (2,000 + 575 = 2,575). Total: 30,000 + 100 + 2,575 = 32,675.

Multiple choice book keeping and accountancy sub-division of journal - 2 (subsidiary books) introduction, meaning, types and advantages of subsidiary books journal proper or general journal meaning and types of subsidiary books

A second hand motor car was purchases on credit from B & Co. for Rs $10,000$. It will be recorded in _______________.

  1. Journal Proper (General Journal)

  2. Cash Book

  3. Purchase Book

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

Purchase book is a special purpose subsidiary book prepared by a business to record all credit purchases.

Multiple choice book keeping and accountancy sub-division of journal - 2 (subsidiary books) introduction, meaning, types and advantages of subsidiary books journal proper or general journal meaning and types of subsidiary books

Outstanding salary of Rs $34,000$ to be provided in the accounts will be recorded in  ________________.

  1. Bills Receivable Book

  2. Journal Proper(General Journal)

  3. Purchase Return Book

  4. Purchase Book
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Outstanding salary is an adjustment entry. Since it does not involve cash, bills, or inventory purchases, it is recorded in the Journal Proper.

Multiple choice book keeping and accountancy sub-division of journal - 2 (subsidiary books) introduction, meaning, types and advantages of subsidiary books journal proper or general journal meaning and types of subsidiary books

Investment was sold on credit for Rs $1,00,000$ at par will be recorded in _______________.

  1. Cash Book

  2. General Journal

  3. Purchases Return Book

  4. Purchase Book
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The sale of an asset (investment) on credit is not a regular trade transaction. Therefore, it is recorded in the General Journal (Journal Proper) rather than the Sales Book.

Multiple choice book keeping and accountancy sub-division of journal - 2 (subsidiary books) introduction, meaning, types and advantages of subsidiary books journal proper or general journal meaning and types of subsidiary books

Goods were sold on credit basis to Mr. Ram for Rs $10,000$. It will be recorded in _______________.

  1. Journal Proper(General Journal)

  2. Cash Book

  3. Purchase Book

  4. Sales Book
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Sales Book is a book in which non-cash sales are recorded with details of customer, invoice, amount and date; these details are later posted to each customer's account in the sales ledger.

Multiple choice book keeping and accountancy sub-division of journal - 2 (subsidiary books) introduction, meaning, types and advantages of subsidiary books journal proper or general journal meaning and types of subsidiary books

Unpaid salary Rs. 200 is to be provided for in the accounts by entry in the ____________.

  1. bill receivable book

  2. purchases book

  3. journal proper (General Journal)

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

Provision for outstanding expenses is an adjusting entry. All such adjustments are recorded in the Journal Proper.

Multiple choice book keeping and accountancy sub-division of journal - 2 (subsidiary books) introduction, meaning, types and advantages of subsidiary books journal proper or general journal meaning and types of subsidiary books

'A' owned Rs. 25,000 to 'B' 'A' becomes insolvent. 'B' got A's computer valuing Rs. 11,500 in his full settlement journal entry will be passed in the books of 'B'. 

  1. Purchase A/c Dr. 11,500

    To A 11,500

  2. Computer Dr 11,500

    Bad-debts Dr. 13,500

    To A 25,000

  3. Computer A/c Dr. 25,000

    To A 25,000

  4. Computer A/c Dr. 11,500

    Purchases A/c Dr. 13,500

    To A 25,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

B receives a computer (asset) for 11,500 and writes off the remaining 13,500 as a bad debt, as the total claim was 25,000. The entry correctly debits the asset and the bad debt expense, and credits the debtor.

Multiple choice book keeping and accountancy sub-division of journal - 2 (subsidiary books) introduction, meaning, types and advantages of subsidiary books journal proper or general journal meaning and types of subsidiary books

Which of the following account(s) will be affected while rectifying the following error?

Sales to Ram Rs.336 recorded in the books of original entry as Rs.363.

  1. Sales Account

  2. Ram's Account

  3. Cash Account

  4. Both Sales and Ram's Account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The amount debited to Ram account is more than what should have been debited. The same goes for the amount credited to Sales account. Hence, Ram and Sales account are affected with overstated value of Rs.27.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Debtors as per trial balance - Rs. $40,600$
Bad debt not yet provided - Rs. $600$
Provision for debt to be made at $5\%$ on sundry debtors.
Provision for discount on debtors to be created @ $2\%$.
Amount of provisions for discount on debtors.

  1. Rs. $760$
  2. Rs. $600$
  3. Rs. $2,000$
  4. Rs. $2,600$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

First, calculate the adjusted debtors: 40,600 - 600 (bad debt) = 40,000. The provision for discount is calculated on the remaining balance after the provision for bad debts. Provision for bad debts = 5% of 40,000 = 2,000. Remaining debtors = 40,000 - 2,000 = 38,000. Provision for discount = 2% of 38,000 = 760.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Debtors Closing Balance Rs 5000, R.D.D 10 % and Provision for discount on Debtors is  5% than what is its value of provision on discount.

  1. Rs. 225

  2. Rs. 200

  3. Rs. 300

  4. Rs. 350
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Provision for bad debts = 10% of 5000 = 500. Net debtors = 5000 - 500 = 4500. Provision for discount = 5% of 4500 = 225.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

From the following details, how much should be charged to profit and loss a/c as bad debts during the current year.
provisions for bad debts A/c at the beginning of the year Rs.20,000
Actual bad debts during year Rs.19,000
Debtors balance at the end of the year Rs.80,000
Previsions for bad debts to be made @5% of total debtors. 

  1. Rs.3,000

  2. Rs.4,000

  3. Rs.2,600

  4. Rs.3,600
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Bad debts to be charged = Actual bad debts + New provision - Old provision. New provision = 5% of 80,000 = 4,000. Total charge = 19,000 + 4,000 - 20,000 = 3,000.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Debtors appeared in balance sheet at Rs. $18,525$ after making following adjustment.
Bad debt written off Rs. $400$.
Provision for discount on debtors @ $2.5\%$.
Provision for bad debt @ $5\%$.
Debtors as per trial balance $=$?

  1. Rs. $20,400$
  2. Rs. $16,788$
  3. Rs. $20,432$
  4. Rs. $18,573$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Let X be the debtors before adjustments. After bad debt: X - 400. After bad debt provision (5%): (X - 400) * 0.95. After discount provision (2.5%): (X - 400) * 0.95 * 0.975 = 18,525. (X - 400) * 0.92625 = 18,525. X - 400 = 20,000. X = 20,400.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

Extract of trial balance of Mr.Z is as follows.

Particulars Dr. Rs. Cr. Rs.
Debtors $24,000$ -
Provisions for bad debts - $400$

Included amongst the debtors is Rs. $3,000$ due to Ram and included among the creditors Rs. $1,000$ due to him.
Provision for bad debts to created at @ $5\%$ and for discount @ $2\%$. Debtors will be shown at balance at.

  1. Rs. $21,413$
  2. Rs. $21,885$
  3. Rs. $22,344$
  4. Rs. $22,148$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Debtors = 24,000 - 1,000 (mutual set-off) = 23,000. Provision for bad debts = 5% of 23,000 = 1,150. Net = 23,000 - 1,150 = 21,850. Provision for discount = 2% of 21,850 = 437. Final = 21,850 - 437 = 21,413.

Multiple choice elements of book keeping and accountancy adjustments in preparation of financial statements manager's commission on net profit preparation of final accounts preparation of financial statements

From the following details find out the closing capital that will be appear in balance sheet on $31-12-2015$.

Particulars Rs.
Capital on $1-1-2015$ $14,00,000$
Drawings $5,000$
Repair $2,000$
Net profit before manager commission $6,62,900$
Debtors $1,50,000$

Provision for bad debts @ $6\%$.
The manager is entitled commission of $5\%$ of net profit after charging his commission.

  1. Rs. $20,26,333$
  2. Rs. $20,15,857$
  3. Rs. $20,14,305$
  4. Rs. $20,24,755$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The closing capital is calculated as Opening Capital + Net Profit (after commission) - Drawings. The net profit after commission is calculated by dividing the profit before commission by (1 + rate/100), which is 6,62,900 / 1.05 = 6,31,333. Adding this to the opening capital (14,00,000) and subtracting drawings (5,000) results in 20,26,333.