Tag: elements of book keeping and accountancy

Questions Related to elements of book keeping and accountancy

The difference between capital at the end of year and capital at the beginning of year is called ____________.

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

  1. Profit

  2. Income

  3. Drawings

  4. Expenses

Show answer
Correct Option: A
Explanation:

An increment of closing capital is a result of excess revenue earned during the year against the opening capital at the beginning thus representing Profit.

In order to find out the correct profit, drawings are ___________ to the closing capital.

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

  1. Deducted

  2. Added

  3. Divided

  4. Multiplied

Show answer
Correct Option: B
Explanation:

As Drawing refers to withdrawal of capital, Due to drawings, closing capital is decreased resulting a reduced Profit.
Hence, to ascertain correct profit Drawings are added back to closing capital.

Find the total at assets at the end of the year if the net profit, drawing during the year and assets at the beginning of the year were 12,000, 7,000 and 15,000 respectively.

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

  1. 20,000

  2. 10,000

  3. 9,000

  4. 8,000

Show answer
Correct Option: A
Explanation:

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

 Assets in the beginning of the year =Rs 15000
Less : Drawing made during the year (7000)
Add : Net profit for the year                  12000
                                                            = Rs 20000

                                             Rs.
Opening Capital                  50,000
Closing Capital                    52,000
Net profit during the year      5,000     
If the above figure are drawn from the books of a trader, then  his drawings, if any, are ____________.

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

  1. Rs. 5,000

  2. Rs. 3,000

  3. Rs. 1,000

  4. Rs. 6,000

Show answer
Correct Option: B
Explanation:
 PARTICULARS  AMT RS.
 opening capital   50,000
add : net profit during the year    5,000
   
 less : closing capital  (52,000)
 TOTAL    3,000

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

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

  1. True

  2. False

Show answer
Correct Option: B

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 _____________.

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

  1. Rs. 67,000

  2. Rs.63,000

  3. Rs.77,000

  4. Rs.89,000

Show answer
Correct Option: B
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

Profit = Capital at the end+______- Capital introduced - Capital in the beginning.

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

  1. Sales

  2. Drawings

  3. Loan

  4. Net Purchases

Show answer
Correct Option: B
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.  

Favourable balance as per cash book means __________.

elements of book keeping and accountancy recording and posting of cash transactions understand the method of recording cash transactions simple cash boook meaning, features and types of cash book

  1. debit balance in the bank column of the cash book

  2. debit balance in the pass book

  3. credit balance in the bank column in the cash book

  4. none of the above

Show answer
Correct Option: A

The balance of the Cash Column is _____________.

elements of book keeping and accountancy recording and posting of cash transactions understand the method of recording cash transactions simple cash boook meaning, features and types of cash book

  1. Always Debit

  2. Always Credit

  3. Either Debit or Credit

  4. Neither Debit nor Credit

Show answer
Correct Option: A

Under sales on returned or approval basis, when transactions are few, the seller, while sending the goods, treats them as

elements of book keeping and accountancy recording and posting of cash transactions understand the method of recording cash transactions simple cash boook meaning, features and types of cash book

  1. an ordinary sale but no entry is passed in the books

  2. an ordinary sale and entry for normal sale is passed in the books

  3. Approval sale and no entry is passed

  4. None of these

Show answer
Correct Option: B