Tag: single entry system

Questions Related to single entry system

In single entry system only ________________ accounts are opened.

commercial applications single entry system introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records meaning of incomplete records, reasons for incompleteness and its limitations ascertaining profit or loss from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs double entry system

  1. Real

  2. Nominal

  3. Personal

  4. Real and personal

Show answer
Correct Option: D
Explanation:

Under Single entry System only personal accounts and cash A/c are opened. 

Only personal and cash accounts and the cash and credit transactions (related to personal accounts) are recorded under this system.

In single entry system it is not possible to prepare _____.

commercial applications single entry system introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records meaning of incomplete records, reasons for incompleteness and its limitations ascertaining profit or loss from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs double entry system

  1. Balance sheet

  2. Receipts and payments account

  3. Trial balance

  4. Account sales

Show answer
Correct Option: C
Explanation:

Under single entry system Books of accounts are not maintained hence, Trial Balance is not Possible to Prepare.

A statement of ____________ is to be prepared in order to find out the profit and loss under a single entry system.

commercial applications single entry system introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records meaning of incomplete records, reasons for incompleteness and its limitations ascertaining profit or loss from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs double entry system

  1. Income

  2. Affairs

  3. Revenue

  4. Profit and loss

Show answer
Correct Option: B
Explanation:

Profit or loss earned by the business under single entry system is based on the difference between its Opening and closing capital.
To ascertain this capital Statement of affairs are prepared.

__________system is usually adopted by traders who have less knowledge of Accounting.

commercial applications single entry system introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records meaning of incomplete records, reasons for incompleteness and its limitations ascertaining profit or loss from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs double entry system

  1. Double entry system

  2. Single entry system

  3. Dual aspect system

  4. None of the above

Show answer
Correct Option: B
Explanation:

Single Entry System of Accounting, also known as Accounting from Incomplete Records, is a non-standard and non-scientific system of accounting. This system is adopted by small businessmen as they do not have enough capital and expertise to employ the standard double entry system of accounting in their business.

In _____ forms of business the owners are directly responsible for the debts of the business.

commercial applications single entry system introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records meaning of incomplete records, reasons for incompleteness and its limitations ascertaining profit or loss from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs double entry system

  1. Sole proprietor

  2. Corporate body

  3. Both

  4. None of the above

Show answer
Correct Option: A
Explanation:

Sole proprietorship is type of enterprise that is owned and run by one natural person and in which there is no legal distinction between the owner and business entity. The owner is in direct control of all elements and is legally accountable for the finances of such business and this may include debt, loans, loss, etc.

Income -tax of the sole trader paid is shown ___________.

commercial applications single entry system introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records meaning of incomplete records, reasons for incompleteness and its limitations ascertaining profit or loss from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs double entry system

  1. Debited to profit and Loss A/c

  2. Debited to Trading A/c

  3. Debited to his Capital A/c

  4. None of the above

Show answer
Correct Option: C
Explanation:

For a Sole Proprietor, income tax is not an expense incurred to generate revenue hence it is not treated as an expense to be paid out of profits. In this case, income tax is treated as a personal expense resulting in drawings from the business concluding to a reduction of capital.