Tag: elements of accounts

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Questions Related to elements of accounts

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

When fixed assets or stationeries are purchased on credit, the entries are passed in the _____________.

  1. General journal

  2. Purchase day book

  3. Purchase account

  4. Any of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Purchase Day Books are only for credit purchases of inventory. Credit purchases of fixed assets or stationery are recorded in the General Journal.

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

Credit purchase of plant and machinery is recorded in which of the following specialized journals?

  1. General Journal

  2. Cash Journal

  3. Purchase Journal

  4. Purchase return Journal
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Specialized purchase journals are for inventory. Plant and machinery are fixed assets, so their credit purchase is recorded in the General Journal.

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

A subsidiary book which is used to record all those business transactions which do not find any place in the purchase book, sales book, return books, cash book, bills receivable and payable book, etc. is called journal proper..

  1. True

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

Journal proper is book of original entry (simple journal) in which miscellaneous credit transactions which do not fit in any other books are recorded. It is also called miscellaneous journal. The form and procedure for maintaining this journal is the same that of simple journal.

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

Stock-in-trade also includes _____________.

  1. goods in the process of production for sale

  2. items held as fixed assets

  3. items consumed for daily use

  4. depreciation on fixed assets
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Stock-in-trade doesn't include all of a firm's assets when used in the business "

"Stock-in-trade refers to any merchandise or equipment kept on hand and used in carrying on a business. It includes the collection of goods, inventories and merchandise, maintained by a business entity for the purpose of using them for processing, making salable goods or for selling to the customers with an intention to make profit from such deals."

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

Main object of preparing a 'Journal' is to __________.

  1. ascertain the financial position of the business

  2. journalise the cash transactions

  3. make posting in the ledger

  4. record the business transactions first of all
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Main objectives of preparing journal: To make permanent and systematic record of all the financial transactions. 

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

Journal is book of _____________.

  1. Analytical record

  2. Chronological record

  3. Alphabetical record

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

A journal is known as the original book of entry and is also called the prime entry. All the accounting transactions are first recorded in journal in the order of the transactions taking place. Such order is called a chronological order.

Multiple choice elements of accounts accounting in business journal - book of original entry purchases and sales book meaning and importance of journal

 A journal entry in which two or more account is debited or credited is referred as ________.

  1. Journal entry

  2. Multi entry

  3. Additional entry

  4. Compound entry
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A compound entry is a journal entry that involves more than two accounts, where either the debit or credit side (or both) has multiple entries.