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 bill of exchange (trade bill) dishonour of a bill dishonour of bills advantages of bill of exchange

Acceptances received and recorded in bills receivable book are transferred to the ledger ______________.

  1. on the debit side of relevant personal accounts

  2. on the credit side of relevant personal account

  3. <span>either (a) or (b)</span>

  4. none of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When a bill is accepted and recorded in the bills receivable book, the acceptor is the person who owes money. In the ledger, the acceptor's personal account must be credited because they are the giver of the bill (a liability or reduction in asset).

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Prepaid Salary Account is _____________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A prepaid salary is an amount paid in advance for services not yet received. According to accounting principles, it represents a future economic benefit to the business, classifying it as an asset.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Which of the following is (are) benefits of subsidiary ledger accounts to business?

  1. It tells about customer attitude of payments

  2. It can be checked against the control account to pick up recording errors

  3. It tells about the complete history of transactions of business client

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

Subsidiary ledgers provide detailed information about individual accounts (like specific customers or suppliers), which helps in tracking payment history, identifying recording errors by reconciling with control accounts, and managing client relationships.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Outstanding Salary Account is ______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expenses Account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

An outstanding salary is an amount owed to employees for services already rendered but not yet paid. This represents a financial obligation of the business, making it a liability.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Interest Received Account is ________________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest received is income earned by the business, which classifies it as a revenue account. It increases the equity of the business.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Which of the following is (are) benefit/s of subsidiary ledger accounts to business?

  1. It tells about customer attitude of payments

  2. It can be checked against the control account to pick up recoding errors

  3. It tells about the complete history of transactions of business client

  4. All of the given options
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Subsidiary ledgers provide detailed customer payment history showing payment patterns and attitudes, maintain complete transaction records for each client, and allow verification against control accounts to identify recording errors. All three benefits listed are genuine advantages of maintaining subsidiary ledgers. The comprehensive nature of these benefits means the correct answer must encompass all the listed functions.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Salary Account is _______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expenses Account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Salaries represent the cost of labor incurred by the business to generate revenue, making them an expense account.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Which of the following types of information are found in subsidiary ledgers, but not in the general ledger?

  1. Total cost of goods sold for the period.

  2. The quantity of a particular product sold during the period.

  3. The amount owed to a particular creditor.

  4. The portion of total current assets that consist of cash.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

General ledgers contain summary totals for financial reporting. Subsidiary ledgers contain the granular, itemized details, such as specific quantities sold or specific amounts owed by individual clients.