Tag: elements of book keeping and accountancy

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Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

Return of goods purchased on credit to the suppliers will be entered in _________ journal.

  1. Purchase return

  2. Sales return 

  3. Purchase and sales return 

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

Return of goods purchased on credit to the supplier is recorded in the Purchase return journal. Sometimes goods purchased are returned to the supplier for various reasons such as goods are not of the required quality, or are defective, etc. For every return, a debit note is prepared , the original one is sent to the supplier for making necessary entries in his book and on the basis of duplicate copy of debit note entry is recorded in purchase return journal.

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

A purchased goods costing Rs. 1,00,000. B sold the. goods for Rs. 1,60,000. Profit sharing ratio between A and B being equal, what will be the final remittance ?

  1. B will remit Rs. 1,30,000 to A

  2. B will remit Rs. 1,55,000 to A

  3. A will remit Rs. 1,05,000 to B

  4. B will remit Rs. 30,000 to A
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A spent 1,00,000. Total sales were 1,60,000. Profit is 60,000. Shared equally, each gets 30,000 profit. A invested 1,00,000 and is entitled to 30,000 profit, total 1,30,000. Since B collected 1,60,000, B must remit 1,30,000 to A.

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

If Y takes away goods in personal business under memorandum joint venture method, then he will debit these goods in his books to ________________.

  1. Joint venture account

  2. Personal account

  3. Purchases account

  4. Sales A/c
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under the memorandum joint venture method, when a venturer takes goods for personal use, it is treated as a purchase by that venturer and debited to their Purchases account.

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

When a large number of articles are sent on a sale or return basis, it is necessary to maintain __________________.

  1. Sale journal

  2. Goods returned journal

  3. Sale or return journal

  4. Any one of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When goods are sent on a sale or return basis in large quantities, a separate 'Sale or Return Journal' is maintained to track these transactions until they are finalized as actual sales.

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

P and Q enter into a Joint Venture sharing profits and losses in the ratio 3:2. P purchased goods costing Rs. 2,00,000. Other expenses of P Rs. 20,000. Q, sold the goods for Rs. 2,00,000. Remaining goods were taken over by Q at Rs. 10,000. The amount of final remittance to be paid by Q to P will be ______________.

  1. Rs. 2,10,000

  2. Rs. 2,14,000

  3. Rs. 2,20,000

  4. None
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

P's total investment = 2,00,000 + 20,000 = 2,20,000. Total sales = 2,00,000 + 10,000 (goods taken by Q) = 2,10,000. Loss = 2,20,000 - 2,10,000 = 10,000. P's share of loss (3/5) = 6,000. Q's share of loss (2/5) = 4,000. Q owes P for goods taken (10,000) and must pay P's net claim. Actually, P spent 2,20,000 and Q collected 2,00,000 cash. Q owes P 2,20,000 - 6,000 (P's loss) = 2,14,000.

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

Goods returned by X is entered as __________________.

  1. Debit X A/c; Credit purchase return A/c

  2. Debit X A/c; Credit cash A/c

  3. Debit sales return A/c; Credit X A/c

  4. Debit X A/c; Credit sales A/c

  5. Debit sales A/c; Credit Xs A/c
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When goods previously sold are returned by a customer (X), the transaction is recorded in the Sales Return book, debiting Sales Return A/c and crediting the customer's account (X A/c).

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

The following comments below relate to the recording of journal entries. Which statement is true?

  1. For any given journal entry, debits must exceed credits.

  2. It is customary to record credits on the felt and debits on the right

  3. The chart of accounts reveals the amount to debit and credit to the affected accounts

  4. Journalization is the process of converting transactions and events into debit/credit format.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Journalization is indeed the process of converting transactions into debit/credit format for recording. Option A is wrong because debits must equal credits, not exceed them. Option B is incorrect because debits are recorded on the left, not 'felt' (likely a typo for 'left'). Option C is wrong because the chart of accounts only lists account names and numbers, not debit/credit amounts.

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

For every entry in journal the transaction can be ___________.

  1. personal

  2. real

  3. nominal

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

Journal entries can involve personal accounts (individuals/entities), real accounts (assets), and nominal accounts (expenses/incomes/gains/losses).

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

The following comments ail 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
D Correct answer
Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

Journal and ledger records transactions in _________________.

  1. A chronological order and analytical order respectively.

  2. An analytical order and chronological order respectively.

  3. A chronological order only

  4. An analytical order only
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The journal records transactions chronologically as they occur, while the ledger organizes them analytically by account type.