Tag: elements of accounts

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Questions Related to elements of accounts

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

Bills Receivable book is to keep record of ___________.

  1. Bills Received From Customers

  2. Bills Received From Supplier

  3. Credit Purchases

  4. Cash Sales
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

There are various subsidiary books. Bills receivable book is also a subsidiary book which is used to records all bills received from customers.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

The bank rate means ____________________________________.

  1. Rate of Interest charged by commercial banks from borrowers

  2. Rate of Interest at which commercial banks discounted bills of their borrowers

  3. Rate of interest allowed by commercial banks on their deposits

  4. Rate at which RBI purchases or re-discounts bills of exchange of commercial banks
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The bank rate is the official interest rate at which the central bank (RBI in India) provides loans or rediscounts bills of exchange to commercial banks.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

On drawing a bill of exchange the drawer debit __________.

  1. bill receivable a/c

  2. bills A/c

  3. bills payable A/c

  4. endorsee A/c
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When a drawer draws a bill, they create a bill receivable, which is an asset. Increasing an asset requires a debit entry to the Bills Receivable account.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

____________ is designed as a summary of all the bills accept by the firm for which payment has to be made on specified dates of maturity in future.

  1. Bill receivable book

  2. Bill Payable Book

  3. Cash Book

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

The Bills Payable Book is a subsidiary book used to record all bills accepted by the firm, which represent future payment obligations.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

Bill payable book only records transactions relating to ____________.

  1. drawing of bills

  2. accepting of bills

  3. both

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

The Bills Payable book is a subsidiary book used specifically to record the details of bills accepted by the business. It tracks the obligations the business has agreed to pay at a future date.

Multiple choice elements of accounts ledger and posting meaning of bill of exchange index of ledger, forms of ledger and process of posting posting of entries in ledger

Consider the following statement, while preparing annual financial statements, the balance of bills receivable account can be treated as.
I. An accrued income
II. An item of assets
III. A "personal account" balance
Of these statement.

  1. II and III are correct

  2. I and III are correct

  3. I and II are correct

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


  • Accounts receivable represents revenue that has been both earned and billed but not yet received.
  • Accounts receivable is recorded as an asset on the balance sheet.
  • These B/R and B/P are not assets because they are not yet acquired as like Plant, building etc. 
  • They are yet to be encashed. Asset means which has been acquired and has some value. Hence, Bills Receivable and Bills Payable are Representative Personal A/cs.