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 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

Bill Payable Account _______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

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

Bills payable represent a formal written promise to pay a debt, which constitutes a liability for 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

Drawing Account is in the nature of ________________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. A Capital Account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Drawings represent the withdrawal of assets by the owner, which directly reduces the owner's equity (capital) in 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

Unaccrued Interest 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
B Correct answer
Explanation

Unaccrued (or unearned) interest is interest received in advance. Since the business has an obligation to provide the service or wait for the time to pass, it is 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

ICICI Bank 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 bank account represents cash held by the business at a financial institution, which is 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

Personal Income Tax Account is ______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. A Capital Account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Personal income tax paid by the proprietor using business funds is treated as a withdrawal of capital, thus it is in the nature of a capital 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

Bill Receivable Account is _______________.

  1. An Asset Account

  2. A liability Account

  3. A Revenue Account

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

Bills receivable represent a formal written promise from a customer to pay, which is a right to receive cash and thus 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

Capital Account is in the nature of _______________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. A Capital Account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The capital account represents the owner's residual interest in the assets of the business after deducting liabilities.

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

Accrued Interest 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

Accrued interest is interest that has been earned but not yet received. It represents a future inflow of cash, making it 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

Proprietor's Account is in the nature of ________________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. A Capital Account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The proprietor's account represents the owner's equity in the business, which is classified under the capital 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

Sales Tax Payable 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
B Correct answer
Explanation

Sales tax payable represents tax collected from customers that must be remitted to the government, creating a liability.