Tag: elements of accounts

Questions Related to elements of accounts

From the point of view of Registration, the debentures are classified as -

elements of accounts company accounts - redemption of debentures redemption by payment in lump sum accounting effects for redemption of debentures redemption of debentures

  1. Secured and unsecured Debentures

  2. Redeemable Debentures and Irredeemable Debentures

  3. Convertible Debentures and Non-convertible Debentures

  4. Registered Debentures and Bearer Debentures

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Correct Option: D

Which is not the salient feature of sinking fund method?

elements of accounts company accounts - redemption of debentures redemption by payment in lump sum accounting effects for redemption of debentures redemption of debentures

  1. Interest is an integral part

  2. Amount released is affected by fractionations in interest rate

  3. Investment in securities

  4. Premium is paid in advance at the beginning of year

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Correct Option: D

Interest is credited to profit and loss account in ________________.

elements of accounts company accounts - redemption of debentures redemption by payment in lump sum accounting effects for redemption of debentures redemption of debentures

  1. annuity method

  2. sinking fund method

  3. insurance policy method

  4. all of the above

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Correct Option: B

Identify the statement which is common in sinking fund method from the following.

elements of accounts company accounts - redemption of debentures redemption by payment in lump sum accounting effects for redemption of debentures redemption of debentures

  1. The amount received at the end of the life of an asset is fixed

  2. The amount received at the end of the life of an asset is not fixed

  3. The amount received at the beginning of the life of an asset is fixed.

  4. None of the above

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Correct Option: B

Profit on sale of sinking fund investment is credited to ______________.

elements of accounts company accounts - redemption of debentures redemption by payment in lump sum accounting effects for redemption of debentures redemption of debentures

  1. General reserve

  2. Capital reserve

  3. Sinking fund

  4. None of these

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Correct Option: C
Explanation:

Profit or loss on sale of investments is transferred to sinking fund. After the redemption of all debentures, balance left in sinking fund is transferred to general reserve but the portion of the profit on sale of sinking fund investment is preferably transferred to capital reserve.

Sinking fund is _________.

elements of accounts company accounts - redemption of debentures redemption by payment in lump sum accounting effects for redemption of debentures redemption of debentures

  1. always general purpose fund

  2. always for some specific purpose

  3. both purposes (A & B)

  4. none of the above

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Correct Option: B

After the redemption of debentures, any credit balance in the Sinking Fund A/c is transferred to ______ A/c.

elements of accounts company accounts - redemption of debentures redemption by payment in lump sum accounting effects for redemption of debentures redemption of debentures

  1. General reserve

  2. Capital reserve

  3. P & L

  4. None of these

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Correct Option: A
Explanation:

After the redemption of all debentures, balance left in sinking fund is transferred to general reserve but the portion of the profit on sale of sinking fund investment is preferably transferred to capital reserve.

Perpetual inventory system involves ____________.

elements of accounts cash book and its types petty cash book meaning, importance and components of voucher bank book and petty cash book

  1. bincard and stores ledger

  2. bill of material and material requisition

  3. purchase requisition and purchase order

  4. inward and outward invoices

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Correct Option: A

Accounting information system is important component of the organisational MIS in an organisation. 

elements of accounts using computerised accounting system grouping and codification of accounting steps in installation of cas accounting information system

  1. True

  2. False

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Correct Option: A
Explanation:

Accounting information system is important component of the organisational MIS in an organisation. It receives information and provides information and provides information to the other functional MIS.

___________ reports will be prepared only when the management requests them.

elements of accounts using computerised accounting system grouping and codification of accounting steps in installation of cas accounting information system

  1. Summary

  2. Exception

  3. Demand

  4. Customer/Supplier

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Correct Option: C