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

Questions Related to introduction to single entry system and difference between single entry and double entry system

Double entry system of book-keeping refers to a system where, _____________________.

  1. the number of accounts with a debit balance must agree with the number of accounts with the credit balance

  2. each transaction is recorded twice, once in journal and then in ledger

  3. equal debit and credit entries are made for each transaction

  4. each transaction is recorded in two set of account book


Correct Option: C
Explanation:

Double Entry System of accounting is based on the dual aspect of accounting. It says that every transaction will have two effects in books of account.

For every debit , there will a credit of similar amount and vice versa. 

For example, Goods worth Rs. 1000 purchased for cash. There are 02 accounts which are affecting here i.e. cash is going out of Rs.1000 and Goods are coming for Rs.1000.

Hence, it is true that equal debit and credit entries are made for each transaction. 

Double entry book keeping system is most scientific system of recording business transactions.

  1. True

  2. False


Correct Option: A
Explanation:

"The specific technique which reflects the concept of duality is known as double entry book-keeping."-Lewis and Gillespie.

It is the most common system of bookkeeping whereby the two aspects of every transaction i.e., the receiving aspect (debit) and the giving aspect (credit) are recorded in the books of accounts. It is based on the 'dual aspect concept'.
This method of writing every transaction in two different accounts on opposite sides for equal value is known as the double entry system of book keeping. This is the most accurate, complete and scientific system of accounting. 

The Double Entry System of accounting originated in _________.

  1. America

  2. Russia

  3. Italy

  4. England


Correct Option: C
Explanation:
Double entry accounting system first invented in Italy by a church father who's named Luca Bartolomes Pacioli. He was the mathematician and contemporary of Leonardo Da Vinci.

Double Entry Principle means _____________________.

  1. having debit for every credit and similarly, credit for each debit

  2. writing all the entries twice in the book

  3. maintaining the double account for all business transactions

  4. writing two times the same entry


Correct Option: A
Explanation:
Double entry means that every transaction will involve at least two accounts. For example, if your company borrows money from the bank, the company's asset Cash is increased and the company's liability Notes Payable is increased. ... Double entry also requires that one account be debited and the other account be credited.

In double entry system of book-keeping every business transaction affects _____________.

  1. two accounts

  2. two sides of the same account

  3. the same account on two different dates

  4. all of the above


Correct Option: A
Explanation:

Because every business transaction affects at least two accounts, our accounting system is known as a double-entry system.  For example, when a company borrows $1,000 from a bank, the transaction will affect the company's Cash account and the company's Notes Payable account.

The accounting system which records both the aspects i.e. debit and credit, of all the transactions is known as _____________.

  1. Double entry system

  2. Single entry system

  3. Double account system

  4. Inflation accounting system


Correct Option: A
Explanation:

 Double-entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account. The double-entry has two equal and corresponding sides known as debit and credit. The left-hand side is debit and right-hand side is credit.

In double Entry system of Book-keeping every business transaction affects __________.

  1. Two accounts.

  2. Two sides of the same account.

  3. The same account on two different dates.

  4. All of these.


Correct Option: A
Explanation:

Because every business transaction affects at least two accounts, our accounting system is known as a double-entry system. 

For example, when a company borrows $1,000 from a bank, the transaction will affect the company's Cash account and the company's Notes Payable account.

The system of recording transactions based on dual aspect concept is _____________.

  1. Double account system

  2. Double entry system

  3. Single entry system

  4. Incomplete system


Correct Option: B
Explanation:

The system of recording transactions based on dual aspect is called as double entry system.