Tag: elements of accounts

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Questions Related to elements of accounts

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

Port Trust dues are payable by _________________.

  1. The forwarding agent

  2. Importer

  3. Exporter

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

The 'Landing and Shipping DuesOffice' levies a charge for services of dock authorities which has to be borne by the importer. After payment of dock charges, the importer is given back one copy of the application as a receipt. This receipt is is known as 'port trust dues receipt'.

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

Import procedure begins with _____________.

  1. Indent

  2. Marine insurance

  3. Mate's certificate

  4. Shipping order
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 Indent orders are orders that are placed for products produced offshore. It generally is for a large quantity of standard or custom made products manufactured overseas and due to the higher volumes, the price per unit is lower.


After the initial formalities are over and the importer has obtained the licence quota and the necessary amount of foreign exchange, the next step in the import of goods is that of placing the order. This order is known as Indent.

Multiple choice adjustment of partners capital and death of a partner retirement/ death of a partner elements of accounts

On the death of a partner, credit balance of Profit and Loss Account appearing in, the Balance sheet, should be credited to the Capital Accounts of ______________ .

  1. all partners including the deceased partner in their profit-sharing ratio

  2. the remaining partners in the new profit-sharing ratio

  3. neither the deceased partner nor the remaining partners.

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

When a partner dies, the accumulated profits in the Profit and Loss Account belong to all partners based on their profit-sharing ratio, as it was earned during their tenure.

Multiple choice adjustment of partners capital and death of a partner retirement/ death of a partner elements of accounts

X and Y have capitals of Rs. 20,000 and Rs. 10,000 respectively and share profits and losses equally. On dissolution of firm all creditors are paid off and a balance of cash left is Rs. 5,000. It will be distributed as follows :

  1. Rs. 5,000 to X

  2. Rs. 5,000 to Y

  3. Rs. 2,500 each to X and Y

  4. Rs. 3,333 to A and Rs. 1,667 to B
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

According to piecemeal distribution of cash, partners whose capitals are more than proportionate to other partner's capital should first be refunded to bring down their capitals to proportionate levels. After that amount left unpaid be shared in profit sharing ratio. In this, X and Y share profits and losses equally. So their capitals should also be equal. To make capital equal X will be paid first. So Rs. 5000 will be paid to X. 

Multiple choice adjustment of partners capital and death of a partner retirement/ death of a partner elements of accounts

 New profit sharing ratio is calculated at the time of _________ .

  1. Admission of a partner

  2. Retirement of a partner

  3. Death of a partner

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

Partnership - The relation between persons who have agrred to share the profit of a business carried on by all or any of them acting for all is known as partnership. 

Partnership can be reconstituted at any time during the accounting year in any of the following ways :-
1. Admission of a partner
2. Retirement of a partner
3. Death of a partner
In any of the above instances new profit sharing ration must be calculated to allocate the income and expenditure to partners in a reconstituted firm.

Multiple choice adjustment of partners capital and death of a partner retirement/ death of a partner elements of accounts

In partnership, a minor _______________ .

  1. Cannot be a partner

  2. Can be a partner

  3. Can be admitted only to the benefits of a partnership

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

A partnership is a contract between the partners. Hence a minor cannot be a partner in a partnership firm. However, according to the Partnership Act, a minor may be admitted to the benefits of a partnership. So while the minor will not be a partner he will enjoy all the benefits of a partnership.

Multiple choice adjustment of partners capital and death of a partner retirement/ death of a partner elements of accounts

On the dissolution of a firm, an amount realized from the unrecorded asset is credited to:

  1. Revaluation account

  2. Realisation account

  3. Cash account

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

At the time of dissolution, all the assets are transferred to realisation account. Journal entry is:
Realisation A/c Dr. 
    To assets A/c 
When assets are sold, entry is:   
Bank A/c Dr. 
    To Realisation A/c
Because bank balance increased.

Multiple choice adjustment of partners capital and death of a partner retirement/ death of a partner elements of accounts

Cash paid on settlement of retiring partners claim is credited to _____.

  1. Cash A/c

  2. Partners Capital A/c

  3. Retiring Partner Capital A/c

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

Cash is a real account. Rule for the real account is as under:

Debit what comes in 
Credit what goes out

Cash paid to partner at the time of retirement. Accordingly journal entry will be passed as:
Partner's Capital A/c                 Dr.
          To Cash A/c