Tag: introduction to single entry system and difference between single entry and double entry system

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Multiple choice 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

In single entry system only ________________ accounts are opened.

  1. Real

  2. Nominal

  3. Personal

  4. Real and personal
Reveal answer Fill a bubble to check yourself
D Correct answer
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.

Multiple choice 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

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

  1. Balance sheet

  2. Receipts and payments account

  3. Trial balance

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

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

Multiple choice 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

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

  1. Income

  2. Affairs

  3. Revenue

  4. Profit and loss
Reveal answer Fill a bubble to check yourself
B Correct answer
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.

Multiple choice 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

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

  1. Double entry system

  2. Single entry system

  3. Dual aspect system

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

Multiple choice 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

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

  1. Sole proprietor

  2. Corporate body

  3. Both

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

Multiple choice 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

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

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

Multiple choice elements of book keeping and accountancy accounting from incomplete records ascertaining profit or loss from incomplete records meaning and preparation of statement of profit meaning of incomplete records, reasons for incompleteness and its limitations preparation of final accounts from incomplete records preparation of statement of affairs introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

To ascertain the profit, closing capital is to be adjusted by deducting ________ and adding _________.

  1. Opening capital, Drawings

  2. Opening capital, Cash deposit

  3. Surplus, Opening balance

  4. None of the Above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

To ascertain the profit, closing capital is to be adjusted by deducting opening capital and adding drawings.


Below is the example:
Opening Capital               Rs.30000
Drawings                           Rs.5000
Closing Capital                 Rs.50000

Solution:
Closing Capital                Rs.50000
Add: Drawing                  Rs.  5000
                                         ----------------
                                         Rs.55000
Less: Opening Capital    Rs.30000
                                         ---------------
Profit during the year      Rs.25000
                                        -----------------

Multiple choice elements of book keeping and accountancy accounting from incomplete records ascertaining profit or loss from incomplete records meaning and preparation of statement of profit meaning of incomplete records, reasons for incompleteness and its limitations preparation of final accounts from incomplete records preparation of statement of affairs introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

Kumar and Shanu-entered into a joint venture to purchase and sell new year gifts. They agreed to share the profit and losses equally. Kumar purchased goods worth Rs. 1,00,000 and spent' Rs. 10,000 in sending the goods to Shanu. He also paid Rs. 5,000 for insurance. Shanu spent Rs. 10,000 as selling expenses and sold goods for 2,00,000. Remaining goods Were taken over by him at Rs. 5,000. What will be the amount to be remitted by Shanu to Kumar as final settlement?

  1. Rs. 1,55,000

  2. Rs. 1,50,000

  3. Rs. 1,15,000

  4. Rs. 80,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Kumar's total investment: 1,00,000 + 10,000 + 5,000 = 1,15,000. Shanu's sales: 2,00,000 + 5,000 = 2,05,000. Total profit: 2,05,000 - 1,15,000 - 10,000 (Shanu's expenses) = 80,000. Profit share: 40,000 each. Shanu owes Kumar: 1,15,000 (Kumar's cost) + 40,000 (Kumar's profit) - 0 (Kumar's share of sales) = 1,55,000.

Multiple choice elements of book keeping and accountancy accounting from incomplete records ascertaining profit or loss from incomplete records meaning and preparation of statement of profit meaning of incomplete records, reasons for incompleteness and its limitations preparation of final accounts from incomplete records preparation of statement of affairs introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

Profit under single entry system of Book Keeping means ______________.

  1. The difference between opening and closing cash balances and reduced by fresh capital introduced.

  2. The difference between opening net assets and closing net assets as increased by drawings and reduced by new capital introduced.

  3. Profit shown by Trading and Profit and Loss Account and Balance sheet.

  4. The amount of closing cash balance as reduced by expenses.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When there is no double entry system of accounting is followed, the profits are calculated on the basis of comparing the opening and closing of capital/assets by giving the effect of drawings.

This can be represented as:

Closing Capital                 xxxxx
Add: Drawings                  xxxxx
Less: Fresh capital            xxxxx 
Less: Opening Capital      xxxxx
Balance will be Profit       xxxxx

Multiple choice elements of book keeping and accountancy accounting from incomplete records ascertaining profit or loss from incomplete records meaning and preparation of statement of profit meaning of incomplete records, reasons for incompleteness and its limitations preparation of final accounts from incomplete records preparation of statement of affairs introduction to single entry system and difference between single entry and double entry system meaning and featuresof incomplete records

If opening capital is $Rs.80,000$, closing capital is $Rs.1,80,000$, withdrawals are $Rs.10,000$ and additional capital brought in the business is Rs. $20,000$, then the profit will be________.

  1. $Rs.90,000$

  2. $Rs.1,10,000$

  3. $Rs.70,000$

  4. $Rs.1,50,000$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

        Closing Capital                         1,80,000

Add: Drawings                                    10,000
Less: Additional Capital                   (20,000)
_________________             __
 Adjusted Capital                              1,70,000 
Less: Opening Capital                      (80,000)
______________             _____
Profit during the year                        90,000