Tag: elements of accounts

Questions Related to elements of accounts

An increase in marginal cost of capital and capital rationing are two arising complications of _____________.

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. maximum capital budget

  2. greater capital budget

  3. optimal capital budget

  4. minimum capital budget

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Correct Option: C

Under sales on return or approval basis (when transactions are few), the seller sends goods by treating these as ________________.

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. An ordinary sale and no entry is passed in the books

  2. An ordinary sale and entry for normal sale is passed in the books

  3. Sale on approval and no entry is passed

  4. Any one of the above

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Correct Option: B

How is the date of receipt of consideration by the supplier determined?

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. Date on which the receipt of payment is entered in the books of account

  2. Date on which the receipt of payment is credited in the bank account

  3. Earlier of (a) & (b)

  4. (a) & (b) whichever is later

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Correct Option: C

An outstanding bonds are also classified as _______________.

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. standing bonds

  2. outdated bonds

  3. dated bonds

  4. seasoned bonds

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Correct Option: D

A risk which is classified as its contribution to risk of portfolio is classified as __________.

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. classified risk

  2. contributed risk

  3. irrelevant risk

  4. relevant risk

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Correct Option: D

The Reserve Bank of India has decided to help banks, as a temporary measure, by providing additional liquidity support under LAF. What is the full form of LAF?

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. Loan Adjustment Fund

  2. Liquidity Adjustment Facility

  3. Long Awaited Funds

  4. Loan Against Funds

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Correct Option: B

Source document are useful to record business transactions in the books of accounts.

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. True

  2. False

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Correct Option: A
Explanation:

The source document is essential to the bookkeeping and accounting process as it provides evidence that a financial transaction has occurred. During an accounting or tax audit, source documents back up the accounting journals and general ledger as an indisputable transaction trail.

Cash memo is used for credit purchase/sale.

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. True

  2. False

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Correct Option: B
Explanation:

Whenever goods are sold in cash, a seller prepares a cash memo and records therein details of goods sold. This memo includes quantity, rate and total amount of goods sold, along with the date of transaction. 

All cash transactions are recorded in the books of accounts on the basis of the cash memos. 
A cash memo is prepared when goods are sold for cash. 
Thus, a cash memo is given by a trader in the case of sale and it is received in the case of purchases.
Cash memos are used for cash purchases/sales in order to record the credit purchases/sales, an invoice or bills are prepared by the seller.

Trade discount allowed on the sales, if appearing in the trial balance, is shown in the final accounts ____________.

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. on the debit side of trading account

  2. on the debit side of the profit and loss account

  3. by way of deduction from the sales in the trading account

  4. credit of profit & loss Account

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Correct Option: C

When does a entry termed as a combined entry ____________________.

elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

  1. If two transactions of one company are involved

  2. If there is debit and credit both

  3. Transactions are of the same nature and they take place on the same day.

  4. An the accounts are debited the very same day

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Correct Option: C