Tag: book keeping and accountancy

Quizzes (126) Questions (1524)

Questions Related to book keeping and accountancy

Multiple choice book keeping and accountancy adjustments in preparation of financial statements accrued income earned or accrued income need for adjustment, closing stock and outstanding expenses

On receipt of Rs 975 from Shyam on his account for Rs 1000 Shyam's Account should be credited with ____________.

  1. Rs 1000

  2. Rs 975

  3. Rs 25

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

When a payment is received from a debtor, the debtor's account is credited with the actual amount of cash received, regardless of the total balance owed.

Multiple choice book keeping and accountancy adjustments in preparation of financial statements accrued income earned or accrued income need for adjustment, closing stock and outstanding expenses

What will be the treatment of "accrued income" if appearing in the Trial Balance.

  1. It will be shown on the assets side as current assets in the balance sheet

  2. It will be shown on the liabilities side as current liability in the balance sheet

  3. It will be shown on the debit side of trading account as an expense

  4. It will be shown on the credit side of profit and loss account as an income
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Accrued Income is treated as an asset for the company , hence it will be shown in Asset Side in the Balance Sheet. 

Multiple choice book keeping and accountancy adjustments in preparation of financial statements accrued income earned or accrued income need for adjustment, closing stock and outstanding expenses

In balance sheet, accrued income is shown under which head of assets _______________.

  1. Intangible Assets

  2. Current Assets

  3. Fictitious Assets

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

It may happen that certain items of income such as interest on loan, commission, rent, etc. are earned during the current accounting year but have not been actually received by the end of the same year. Such incomes are known as accrued incomes. The adjusting entry for accrued income is:

Accrued Income A/c Dr.     
      To Concerned Income A/c
The amount of accrued income will be added to the related income in the profit and loss account and the new account of accrued income will appear on the asset side under the head current assets of the balance sheet

Multiple choice book keeping and accountancy adjustments in preparation of financial statements accrued income earned or accrued income need for adjustment, closing stock and outstanding expenses

 Give effect of the following adjustment entry:
 The accrued rent is Rs. 1,900.  

  1. Rent A/c Dr. 1,900

    To Accrued Rent A/c 1,900

  2. Accrued Rent A/c Dr. 1,900

    To Rent A/c 1,900

  3. Accrued Rent A/c Dr. 1,900

    To Asset A/c 1,900

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

It may happen that certain items of income such as interest on loan, commission, rent, etc. are earned during the accounting year but have not been actually received  by the end of the year. Such incomes are known as accrued income. The adjustment entry for accrued income is:

Accrued Income A/c Dr.
     To Concerned Income A/c
The amount of accrued income will be added to the related income in the profit and loss account and the new account of accrued income will appear on the asset side of the balance sheet.
The effect of adjustment entry for  accrued rent of Rs. 1,900 is:
Accrued Rent A/c  Dr.      1,900     
      To Rent A/c                              1,900

Multiple choice book keeping and accountancy company accounts - redemption of debentures debentures redemption methods of redemption of debentures accounting effects for redemption of debentures

Which of these is not a method of redemption of debentures ?

  1. Purchase in open market

  2. Auction of debentures

  3. Drawing of lots

  4. Payment in lump sum
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Standard methods for redemption of debentures include purchase in open market, drawing of lots, and payment in lump sum. Auction is not a recognized method for debenture redemption.

Multiple choice book keeping and accountancy company accounts - redemption of debentures debentures redemption methods of redemption of debentures accounting effects for redemption of debentures

Debentures can be redeemed _____________.

  1. At par

  2. At premium

  3. At discount

  4. Both (a) and (b)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Debentures can be redeemed at par (face value), at a premium (above face value), or sometimes at a discount, depending on the terms of the issue.

Multiple choice book keeping and accountancy company accounts - redemption of debentures debentures redemption methods of redemption of debentures accounting effects for redemption of debentures

When a company issues debenture, it usually mentions the terms on which they will be redeemed on their maturity.

  1. True

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

It is a legal and accounting requirement to state the terms of redemption (maturity date, price, etc.) at the time of issuing debentures.

Multiple choice book keeping and accountancy company accounts - redemption of debentures debentures redemption methods of redemption of debentures accounting effects for redemption of debentures

Premium on redemption is a/an  ____________ of a company payable in future.

  1. liability

  2. asset

  3. income

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

If a company agrees to pay a premium upon redemption, that premium represents a future obligation or debt that the company must settle, making it a liability.