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

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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

Loss of stock is said to be normal loss when such loss is not due to inherent characteristics of the commodities.

  1. True

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

Normal loss is inherent to the nature of the commodity (e.g., evaporation, breakage). Abnormal loss is not inherent.

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

Capital on 1 January Rs.65,000, Interest on drawing Rs.5,000, Interest on Capital Rs.2,000, Drawings Rs.14,000, Profit for the year Rs.15,000. His capital as on 31 December will be _____________.

  1. Rs. 67,000

  2. Rs.63,000

  3. Rs.77,000

  4. Rs.89,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
 PARTICULARS  AMT RS.
 Capital at the beginning of the year  65,000
 less: drawings  14,000
 less: int. on drawings   5,000
 add: int.on capital   2,000
 add: profit for the year  15,000
   
 Capital at the end of the year  63,000
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 = Capital at the end+______- Capital introduced - Capital in the beginning.

  1. Sales

  2. Drawings

  3. Loan

  4. Net Purchases
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Profit is calculated by the taking into account the fluctuations of the capital at the beginning and at the end of the year, by adding the drawings, and deducting the capital introduced to the capital at the end of the year.  

Multiple choice elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

Trading and Profit and Loss Account cannot be prepared from books maintained on single entry basis because :

  1. Nominal accounts are not maintained in the ledger.

  2. Real accounts are not maintained in the ledger.

  3. Personal accounts are not maintained in the ledger.

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

In a single entry system, only personal accounts and cash books are typically maintained. Nominal accounts (expenses, incomes) are not recorded, making it impossible to calculate profit or loss through a traditional Trading and Profit and Loss account.

Multiple choice elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

Difference between the opening and closing capital after adjusting drwaings and capitals introduced during the year is profit for the year.

  1. True

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

Under the single entry system, profit is calculated using the equation: Closing Capital + Drawings - Capital Introduced - Opening Capital = Profit.

Multiple choice elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

Profit, under Single Entry System is ascertained ____________ .

  1. by preparing Profit and Loss Account.

  2. by preparing Statement of Affairs

  3. by preparing Cash Account

  4. all of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Since a full set of accounts is not maintained in a single entry system, profit is typically ascertained by comparing the capital at the beginning and end of the period, often using a Statement of Affairs.

Multiple choice elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

A statement of affairs is a summarised statement of an estimated _____________.

  1. Financial position

  2. Profit

  3. Income

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

To ascertain the Capital, Statements of affairs are prepared.
Capital = Assets - Liabilities
The above equation under which statement of affairs are prepared reflects the financial position of the business.

Multiple choice elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

The capital at the end of the accounting year is ascertained by preparing _______.

  1. Cash Account

  2. Closing statement of affairs

  3. Total debtors account

  4. Opening statement of affairs
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Statement of Affairs is Based under Accounting Equation " Assets = Capital + Liabilities"
thus to ascertain the Closing Capital at the end of the year  Closing Liabilities are deducted from closing assets.

Multiple choice elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

The difference between assets and liabilities is called as ___________.

  1. Capital

  2. Drawings

  3. Incomes

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

As assets represents the total funds applied in the business from capital (owners fund) and liabilities(external funds e.g bank loan, creditors etc).
therefore the difference between Assets and Liabilities will represent Capital.

Multiple choice elements of book keeping and accountancy accounting from incomplete records preparation of final accounts from incomplete records preparation of statement of affairs ascertaining profit or loss from incomplete records introduction to single entry system and difference between single entry and double entry system

Find the total assets at the end of the year if net profit, drawing during the year and assets at the of beginning of the year were 12,000, 7000 and 20,000 respectively. 

  1. 25,000

  2. 15,000

  3. 9,000

  4. 8,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Calculation of total assets at the end of the year :- 

 Assets in the beginning of the year =Rs 20000
Less : Drawing made during the year (7000)
Add : Net profit for the year                  12000
                                                            = Rs 25000