Tag: accountancy

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Questions Related to accountancy

Multiple choice accountancy provisions and reserves reserves provisions provision and reserves

Provision can be created for __________.

  1. Current assets

  2. Liabilities & assets

  3. Valuation adjustment for fixed asset

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

A provision is an amount that you put in aside in your accounts to cover a future liability.
The purpose of a provision is to make a current year’s balance more accurate, as there may be costs which could, to some extent, be accounted for in either the current or previous financial year. These costs that distinctly belong to a specific year could be misleading if accounted for in the future.
A provision is not a form of saving, even though it is an amount that is put aside for a future plausible cost or obligation. Provisions resulting impact is a reduction in the company's equity.
When accounting, provisions are recognized on the balance sheet and then expensed on the income statement.

Provision can be created for any of the foloowing:

1. Current assets

2. Liabilities and assets

3. Valuation adjustment for fixed asset


Multiple choice accountancy provisions and reserves reserves provisions provision and reserves

Debtors are of $Rs.30000$
Bad debts are of $Rs. 6000$
Rate of provision for bad debt is $20$%
State what is the amount of Provision?

  1. $Rs.4800$

  2. $Rs.5000$

  3. $Rs.4000$

  4. $Rs.7000$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Provision for bad debts is created towards anticipated bad debts based on a certain percentage. 

Amount of provision for bad debts is calculated on the net debtors i.e. after deducting the actual bad debts from the debtors. 
Solution to the given problem is as under:

Debtors                           $Rs.30000$
Less: Bad Debts             $Rs. 6000$
                                        ----------------
Balance debtors             $Rs.24000$
                                       -----------------
Provision for bad debts @$20$% on $Rs. 24000$= $Rs.4800$

Multiple choice accountancy provisions and reserves reserves provisions provision and reserves

Give journal entry for:
Bad debts written off.

  1. Bad debts A/c Dr.

    To Profit & loss A/c

  2. Profit & Loss A/c Dr.

    To Provision for doubtful debts A/c

  3. Profit & loss A/c Dr.

    To Sundry debtors A/c

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

Amount which is not recoverable from the debtors is called bad debts. Bad debts has to be debited as an expense/loss and credited to sundry debtors account. 


1. Bad Debts A/c                                 Dr.
      To Sundry Debtors A/c 

Bad debts is a loss for the organization and should be debited to profit & loss account. 

2. Profit & Loss A/c                                Dr.
          To Bad Debts a/c


Instead of passing 2 separate entries, only 1 comprehensive entry can be passed:
Profit & loss A/c   Dr.
      To Sundry Debtors A/c

Multiple choice accountancy provisions and reserves reserves provisions provision and reserves

Debtors are of $Rs.20000$
Bad debts are of $Rs. 3000$
Rate of provision for bad debt is $10$%
State the amount for Provision?

  1. $Rs.1800$

  2. $Rs.2000$

  3. $Rs.1700$

  4. $Rs.2500$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Provision for bad debts is created towards anticipated bad debts based on a certain percentage. 

Amount of provision for bad debts is calculated on the net debtors i.e. after deducting the actual bad debts from the debtors. 
Solution to the given problem is as under:

Debtors                           $Rs.20000$
Less: Bad Debts             $Rs. 3000$
                                        ----------------
Balance debtors             $Rs.17000$
                                       -----------------
Provision for bad debts @$10$% on $Rs.17000$= $Rs.1700$

Multiple choice accountancy provisions and reserves reserves provisions provision and reserves

Debtors are of $Rs.20000$
Bad debts are of $Rs.5000$
Rate of provision for bad debt is $15$%
State the amount for Provision?

  1. $Rs.5000$

  2. $Rs.2250$

  3. $Rs.3500$

  4. $Rs.2000$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Provision for bad debts is created towards anticipated bad debts based on a certain percentage. 

Amount of provision for bad debts is calculated on the net debtors i.e. after deducting the actual bad debts from the debtors. 
Solution to the given problem is as under:

Debtors                           $Rs.20000$
Less: Bad Debts             $Rs. 5000$
                                        ----------------
Balance debtors             $Rs.15000$
                                       -----------------
Provision for bad debts @$15$% on $Rs.15000$= $Rs.2250$

Multiple choice meaning and elements of computer system computer in accounting accountancy

Which of the following statements is true for the dirty page in a page table?

  1. Helps to maintain LRU information

  2. Allows only read on a page

  3. Helps to avoid unnecessary writes on paging device

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

A dirty bit (or modified bit) in a page table indicates that a page has been modified. This helps the OS know it must write the page back to disk before replacing it, avoiding unnecessary writes if the page hasn't changed.

Multiple choice meaning and elements of computer system computer in accounting accountancy

Many user terminals are connected simultaneously to same computer in process of ______________.

  1. Loosely coupled systems

  2. Tightly coupled systems

  3. Time sharing systems

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

Time sharing systems allow multiple users to access a computer simultaneously by rapidly switching the CPU between tasks, giving each user the illusion of dedicated access.

Multiple choice meaning and elements of computer system computer in accounting accountancy

In analogue computer __________________.

  1. Input is first converted to digital form

  2. Input is never converted to digital form

  3. Output is displayed in digital form

  4. All of above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Analog computers work with continuous physical quantities (like voltage or pressure) and do not convert input into digital form for processing.