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

A person on whom the bills of exchange is drawn is called as ______.

  1. Drawer

  2. Drawee

  3. Payee

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

After credit purchases the Buyer has the obligation for Repayment of his debts towards seller. When a bill is drawn by the seller for a guaranteed payment he indicates the liability of the buyer to pay the bill. Hence, the buyer becomes Drawee when bill is drawn in his name.

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

A firm which keeps its books of accounts on single entry system has opening balance and closing balance of Bills Receivable as Rs. 9,000 and Rs. 11,000 respectively. Bills collected during the financial period amount to Rs. 20,000. Bills receivable received during the financial period amount to.

  1. Rs. 22,000

  2. Rs. 18,000

  3. Rs. 12,000

  4. Rs. 11,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Using the formula: Closing Balance = Opening Balance + Bills Received - Bills Collected. Plugging in the values: 11,000 = 9,000 + x - 20,000. Solving for x: 11,000 = x - 11,000, so x = 22,000.

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

While preparing the Annual Financial Statement, the balance of Bills Receivable Account can be treated as a(n) 
1. Accrued Income
2. Item of Asset
3. Personal Account Balance
of these statements

  1. 2 and 3 are correct

  2. 1 and 3 are correct

  3. 1 and 2 are correct

  4. None is correct
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Bills Receivable represents a claim against a person (the drawee), making it a personal account. It is also an asset for the business as it represents a future cash inflow.

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

When a bill is discharged, the acceptor debits ________________.

  1. Cash Account.

  2. Creditor's Account.

  3. Debtor's Account.

  4. Bills Payable Account.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

When a bill is discharged (paid), the acceptor settles their liability. This requires debiting the Bills Payable account to reduce the liability and crediting Cash or Bank.

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

Which of the following is a correct statement ?

  1. Bills Receivable Account is a Real Account.

  2. In order to renew a bill, the original bill need not be cancelled.

  3. At the time of endorsement of a bill, the drawee debts Bills Payable Account.

  4. When noting charges are paid by the bank at the time of dishonour of the bill, the drawee Credits Bank Account.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Bills Receivable is considered a real account in many accounting contexts as it represents a legal instrument or asset. Option B is wrong because renewal requires cancellation; C is wrong because the drawee does not record endorsement; D is wrong because the drawee would credit the creditor, not the bank.

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 account is _____________.

  1. an expense account

  2. an assets account

  3. a liability account

  4. a revenue account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A Bills Receivable is a written promise to receive money, which constitutes a current asset for the holder. Therefore, it is classified as an asset 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

Bill Payable is _________.

  1. Real A/c

  2. Personal A/c

  3. Nominal A/c

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

The accounts which are related to individuals, persons and firms are called personal accounts. Personal accounts are further classified into Natural Personal account, Artificial Personal Account and Representative Personal account. Bills Payable represents creditors for purchases. And every creditor is a person whether artificial or personal. Therefore, bills payable is a personal 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

The hundi payable at sight is called Darshani hundi.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 A hundi payable at sight is called darshani hundi. It is negotiable and is like a demand bill. It may be sold at par or at premium or at discount. A darshani hundi should be presented for payment within a reasonable time of its receipt by the holder.

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 information regarding a duly accepted bill received by drawer.

  1. Bill Receivable Book

  2. Bill Payable Book

  3. Cash Book

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

The Bills Receivable Book is the primary subsidiary book used to record the details of all bills received from debtors.