Tag: book keeping and accountancy

Quizzes (126) Questions (1524)

Questions Related to book keeping and accountancy

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns receipts and payments receipts and payments account prepration of income and expenditure account prepration of income and expenditure account and balance sheet

The total of all payments irrespective of their nature (whether capital or revenue) and whether they pertain to past, current and future periods are to be shown on its credit side is step ____ in preparation of Receipt and Payment Account.

  1. 1

  2. 2

  3. 3

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

The third step in preparation of Receipt and Payment account is showing the total amounts of all payments on credit side whether of capital or revenue nature and whether pertaining to past, current and future periods.

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns receipts and payments receipts and payments account prepration of income and expenditure account prepration of income and expenditure account and balance sheet

________is/are example(s) of capital receipts.

  1. Sale proceed of fixed asset

  2. Loan raised from financial institutions

  3. Capital raised through book building process

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

b'Option D is correct. Capital receipts refer to those receipts which either create a liability or cause a reduction in the assets of the firm. They are non-recurring or non-routine in nature. Sale proceeds of fixed assets leads to reduction in assets. Loan and Capital raised create liability for firm. All are capital receipts. '

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns receipts and payments receipts and payments account prepration of income and expenditure account prepration of income and expenditure account and balance sheet

________ is/are a capital receipt.

  1. Money raised through issue of shares

  2. Bank loan

  3. Sale of investments

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

b'Option D is correct. Capital receipts refer to those receipts which either create a liability or cause a reduction in the assets of the firm. They are non-recurring or non-routine in nature. Sale of investments leads to reduction in assets. Bank loan and money raised through issue of shares create liability for firm. All are capital receipts. '

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns receipts and payments receipts and payments account prepration of income and expenditure account prepration of income and expenditure account and balance sheet

Interest charged by the bank will be deducted, when the overdraft as per the Cash Book is made the starting point for making the Bank Reconciliation Statement. (True/False)

  1. True

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

When starting with an overdraft as per the Cash Book, items that decrease the bank balance (like interest charged by the bank) are added, not deducted, to reconcile with the Pass Book.

Multiple choice book keeping and accountancy origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

The credit balance in the bank account is_______.

  1. An asset

  2. A liability

  3. An expense

  4. Contingent liability
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A credit balance in bank account means that the person in whose account this belongs to is under an obligation to pay the bank back the entitlement of such balances. This money has been owned to the account holder by the bank and must be repaid i.e. it is a liability.

Multiple choice book keeping and accountancy origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

In technical term a cash memo is called a cash voucher.

  1. True

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

A cash memo is prepared when goods are sold or purchased for cash, i.e. cash receipts and payments. 

A cash voucher is prepared for cash purchases or sales. It serves as the source document to record entries in the cash book.
Both are Same.

Multiple choice book keeping and accountancy origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

Where fixed production overhead is debited to work in progress as standard hours of work times the standard absorption rate, a favourable overhead volume variance is debited to _________________.

  1. Work-in-progress account

  2. Overhead volume variance account

  3. Production overhead control account

  4. Profit and loss account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In standard costing, overhead volume variances represent the difference between absorbed overheads and budgeted overheads. When a favourable variance occurs, it is adjusted against the production overhead control account.

Multiple choice book keeping and accountancy origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

Goods destroyed by fire should be credited to______.

  1. Purchases account

  2. Sales account

  3. Loss of goods by fire account

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

Loss of goods by fire, it is just possible that some goods may catch fire and result in loss to the business. This is definitely loss, so "Loss of goods by fire" account will be debited. Such goods have been destroyed, not sold, so their  valuation will be made at cost price. So, purchases account will be credited. The journal entry for this transaction will be made as under:


Loss of goods by fire A/c       Dr.
       To Purchases A/c

Multiple choice book keeping and accountancy origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

Wages paid for erection of machinery are debited to ____________.

  1. Wages Account

  2. Machinery Account

  3. Profit and Loss Account

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

All incidental charges incurred for installation of assets are charged to the cost of that asset. Wages paid on erection of machinery is a capital expenditure and will be debited to machinery account.

Multiple choice book keeping and accountancy origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

Which of the following account may have a debit or credit balance?

  1. Discount received account

  2. Sales account

  3. Trade expenses account

  4. Loan account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A debit balance increases the balance in an expense account and a credit balance decreases the balance. Loan account may have debit or credit balance i.e. when a business secures a loan it records it as an increases in the appropriate asset account and corresponding increases in an account called loan.