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

When goods are purchased for the joint venture, the account to be debited is __________________.

  1. Purchases account

  2. Joint venture account

  3. Venture's capital account

  4. Joint ventures stock A/c
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A joint venture is an arrangement in which two or more parties agree to pool their resources for the purpose of a specific task or transaction.

A joint venture account is prepared for measurement of venture profit. This account is debited with all venture expenses and credited with all sales or collections. The excess balance of credit side over the debit side shows the profit on joint venture and vice versa. Profit /Loss are transferred to co-venturers’ accounts in the profit-sharing ratio.

Goods bought on joint venture as well as expenses incurred in connection with the business are debited to the joint venture account and credited to the seller's account or the joint bank 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

If the goods purchases are in transit, then the journal entry to record will be _______________.

  1. Purchase A/c Dr.

    To Supplier's A/c

  2. Goods-in-transit A/c Dr.

    To Purchase A/c

  3. Goods-in-transit A/c Dr.

    To Supplier's A/c

  4. Supplier's A'c Dr.

    To Goods-in-transit
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When goods are in transit and ownership has passed to the buyer, they should be recorded as an asset (Goods-in-transit) with a corresponding liability to the supplier.

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

Bills Receivable Book is a part of the ___________.

  1. ledger

  2. balance sheet

  3. journal

  4. profit and loss account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Bills Receivable Book also known as a B/R book. 

Bills receivable book is a subsidiary or secondary book of accounting, where all bills of exchange, which are receivable for the business, are recorded. The total value of all the bills receivable for an accounting period is transferred to the books of accounts.

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

According to the Money Measurement concept, the following will be recorded in the books of Accounts __________________.

  1. Quality control in business

  2. Commission payable to salesman

  3. Extra profits made due to introduction of a budgetary control system

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

According to money measurement concept, commission payable to a salesman is to be recorded in the books of accounts. It states that only those transactions should be recorded in the books of accounts that are capable of being measured in monetary terms.

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 process of recording a transaction in the journal is called __________.

  1. posting

  2. journalising

  3. tallying

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

A journal may be defined as the book of original or prime entry containing a chronological record of the transactions from which posting is done to the ledger. The transactions are recorded first in the journal in the order in which they occur. The process of recording the transactions in a journal is called as journalizing.

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

 In bookkeeping and accounting, a ledger is a book (or record) for collecting historical transaction data from a journal and organizing entries by account. The ledger provides the transaction history and current balance in each accounting system account, throughout the accounting period.

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 details of goods returned by the customers to the business organization are recorded in _______ book.

  1. Sales Returns Book

  2. Purchase returns books

  3. Journal proper

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

The customer may return the goods. 

Thus, goods sold that are returned by the customer or buyer, are recorded in the Sales Return Book. 

The Credit Note contains the name of the customer, details of goods returned and reason thereof. Each Credit Note is dated and serially numbered.

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

_______ records the details of goods returned by the business organization to the supplier(s).

  1. Sale Returns Book

  2. Purchase returns books

  3. Journal proper

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

When the goods purchased on credit are returned to the supplier, these are recorded in the Purchase return book. Sometimes, goods purchased can be defective or of low quality, etc. and hence, need to be returned. A separate book is maintained for the purchase return and these are not deducted from the purchases in the Purchase book. Also, Purchase return is recorded at the net amount on the invoice.

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

Sale of office furniture should be debited to __________.

  1. Office furniture account

  2. Sales account

  3. Cash account

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Profit on sale of furniture account is a nominal account the golden rule regarding which says “ All expenses and losses should be debited and all income and gains should be credited” as we are earning income from selling we have to credit this account.

Cash A/c Dr.

To Sales 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 total amount column of the purchases return book is _______________.

  1. Credited to purchases returns account

  2. Debited to sales return account

  3. Credited to sales return account

  4. Debited to purchases returns account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The total of the Purchases Return Book represents goods returned to suppliers, which reduces purchases; therefore, it is credited to the Purchases Returns Account.