Tag: book keeping and accountancy

Quizzes (126) Questions (1524)

Questions Related to book keeping and accountancy

Multiple choice book keeping and accountancy company accounts - issue of debentures issue of debentures for consideration other than cash types of debentures issue of debentures at par, premium, discount, collateral security and for consideration other than cash

It is uncommon is case of debentures issued as collateral security that______.

  1. Interest be given on debentures

  2. Accounting entry is not made

  3. Existence of debenture given as a note in balance sheet

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

It is standard practice to disclose the existence of debentures issued as collateral security in the notes to the balance sheet, and interest is generally not paid on collateral debentures unless the loan defaults. Since the options provided do not describe an 'uncommon' event, 'None of the above' is the correct choice.

Multiple choice book keeping and accountancy company accounts - issue of debentures issue of debentures for consideration other than cash types of debentures issue of debentures at par, premium, discount, collateral security and for consideration other than cash

Features of debentures issued as collateral securities. Select from the given options______.

  1. Only interest on loan to be paid

  2. Interest on loan as well debenture to be paid

  3. Debenture issued as a security towards the loan taken

  4. Both a & b
Reveal answer Fill a bubble to check yourself
D Correct answer
Multiple choice book keeping and accountancy company accounts - issue of debentures issue of debentures for consideration other than cash types of debentures issue of debentures at par, premium, discount, collateral security and for consideration other than cash

P Ltd. issued $10,000$, $12\%$ debentures of Rs. $100$ each at a premium of $10\%$ which are redeemable after $10$ years at a premium of $20\%$. The amount of loss on redemption of debentures to be written off every year will be.

  1. Rs. $1,60,000$

  2. Rs. $80,000$

  3. Rs. $20,000$

  4. Rs. $16,000$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The loss on redemption is the premium payable on redemption, which is 20% of Rs. 100 = Rs. 20 per debenture. For 10,000 debentures, the total loss is Rs. 2,00,000. Over 10 years, the annual write-off is 2,00,000 / 10 = Rs. 20,000.

Multiple choice book keeping and accountancy company accounts - issue of debentures issue of debentures for consideration other than cash types of debentures issue of debentures at par, premium, discount, collateral security and for consideration other than cash

A Ltd issued $3,000$ $15\%$ Debentures of Rs. $100$ each at a discount of $7.5\%$ payable at a premium of $5\%$ at the end of $5$ years. The loss on issue of debentures will be.

  1. Rs. $22,500$

  2. Rs. $30,000$

  3. Rs. $37,500$

  4. Rs. $45,000$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The loss on issue includes the discount on issue (7.5% of 100 = 7.5) and the premium on redemption (5% of 100 = 5). Total loss per debenture = 7.5 + 5 = 12.5. For 3,000 debentures, total loss = 3,000 * 12.5 = 37,500.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

If a bill is. dishonoured, when presented for payment by third party, the drawer will debit:

  1. Acceptors account

  2. Third partys account

  3. Neither of the two

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

When a bill is dishonored, the drawer must reverse the credit given to the drawee. Therefore, the drawer debits the acceptor's (drawee's) account to record the debt again.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

A bill of Rs 23000 dishonoured and noting charges paid by Drawer is Rs. 100 than Drawee's A/c will be Debited for Rs. __________.

  1. 23100

  2. 23000

  3. 100

  4. none
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Upon dishonor, the drawee is liable for the original bill amount plus the noting charges paid by the drawer. Thus, 23000 + 100 = 23100.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

When noting charges are paid by the bank at the time of the dishonour of the bill, the drawee credits:

  1. Bank account

  2. Noting charges account

  3. Neither (a) nor (b)

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

In the books of the drawee, the bank or the holder is not credited for noting charges; rather, the drawee debits Noting Charges and credits the Drawer's account. Therefore, neither bank nor noting charges account is credited by the drawee.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

At the time of endorsement of a bill, the drawer credits:

  1. The drawee

  2. The endorsees personal account

  3. Bills receivable account

  4. either (A) or (B)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When a bill is endorsed, the drawer transfers the bill to an endorsee. The drawer credits the Bills Receivable account because the asset is leaving their possession.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

When the bill is dishonoured, the account debited in the book of drawee _____________.

  1. Acceptor's account

  2. Creditor's account

  3. Bills payable account

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

In the books of the drawee, when a bill is dishonored, the liability that was previously removed (Bills Payable) must be reinstated. Therefore, the Bills Payable account is debited.

Multiple choice book keeping and accountancy bill of exchange (trade bill) dishonour of a bill dishonour of bills bills of exchange advantages of bill of exchange

If a cheque sent for collection is dishonored, the debit is given to _________.

  1. Suppliers Account

  2. Bank Account

  3. Customers Account

  4. Cash Account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

At the time of receiving a cheque, customer account was credited, hence if the cheque bounces, a reverse entry has to be passed by debiting the customer account and crediting the bank account.