Tag: elements of book keeping and accountancy

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Questions Related to elements of book keeping and accountancy

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

Posting refers to the process of transferring information from _________.

  1. journal to ledger accounts

  2. general ledger accounts to journals

  3. source documents to journals

  4. journals to source documents
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Posting is the process of transferring the entries from the book of original entry (journal) to the ledger. In other words, posting means grouping of all the transactions in respect to a particular account at one place for meaningful conclusion and for further accounting process. Posting from the journal is done periodically, may be, weekly or fortnightly or monthly as per the requirements and convenience of the business.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

The following relate to the recording process. Which of these statements is correct_________.

  1. The general ledger is a chronological record, of transactions.

  2. The general ledger is posted from transactions recorded in the general journal.

  3. The trial balance provides the primary source document for recording transactions into the general journal

  4. Transposition is the transfer of information from the general journal to the general ledger.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

After the transactions are recorded in these journals, a summary of all the transactions is posted in each journal to the general ledger, which contains all of a company's accounts. An account is a separate, detailed record associated with a specific asset, liability, equity, revenue, or expense item.

Multiple choice elements of book keeping and accountancy ledger and posting distinction between subsidiary books and ledger explain the meaning of ledger posting methods of posting entries

The process of transferring the transactions relating to changes in a particular item at one place in the form of an account is called _________.

  1. Journalising

  2. Balancing

  3. Posting

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

Posting is the accounting process of transferring transactions to their specific accounts in the ledger to maintain a record of changes for each item.

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