Tag: elements of book keeping and accountancy

Questions Related to elements of book keeping and accountancy

An increase in one liability may lead to _________________.

elements of book keeping and accountancy accounting equation explain the concept of accounting equation usefulness of an accounting equation accounting equations and transactions

  1. Increase in another asset

  2. Decrease in liability

  3. Both (A) and (B)

  4. Either (A) or (B)

Show answer
Correct Option: D

Capital is the difference between.

elements of book keeping and accountancy accounting equation explain the concept of accounting equation usefulness of an accounting equation accounting equations and transactions

  1. Income and expenses

  2. Sales and Cost of goods sold

  3. Assets and liabilites

  4. None of the above

Show answer
Correct Option: C

If assets are increased by 2,000 and liabilities are increased by 1,200. What will be the effect on business equity?

elements of book keeping and accountancy accounting equation explain the concept of accounting equation usefulness of an accounting equation accounting equations and transactions

  1. 800

  2. 2,000

  3. 3,200

  4. 1,200.

Show answer
Correct Option: A
Explanation:
The duality principle is commonly expressed in terms of fundamental Accounting Equation, which is as follows:
Assets = Liabilities + Equity ( Capital)
Equity = Assets - Liabilities
            = 2,000 - 1,200 
            = 800.

Sriram purchased a furniture for Rs. 6,000, the accounts affected from this transaction will be _________________.

elements of book keeping and accountancy accounting equation explain the concept of accounting equation usefulness of an accounting equation accounting equations and transactions

  1. Capital account and cash account

  2. Furniture account and cash account

  3. Furniture account and capital account

  4. Capital account and bank account.

Show answer
Correct Option: B

Listed in random order are the balance sheet figures of Mr. Q as at 31st March, 2015.

Trade receivables Rs. $50,000$
Trade payables Rs. $30,000$
Building Rs. $90,000$
Capital Rs. $1,00,000$
Bank loan Rs. $40,000$
Inventories Rs. $10,000$
Cash Rs. $20,000$
Reserves Rs. $50,000$
Intangible assets Rs. $30,000$
Shares Rs. $20,000$
Equipment Rs. $40,000$
Retained earnings        Rs. $40,000$


Determine the owner's equity?

elements of book keeping and accountancy accounting equation explain the concept of accounting equation usefulness of an accounting equation accounting equations and transactions

  1. Rs. $2,10,000$

  2. Rs. $1,90,000$

  3. Rs. $1,20,000$

  4. Rs. $1,70,000$

Show answer
Correct Option: B

Which of the following accounting equation is correct?

elements of book keeping and accountancy accounting equation explain the concept of accounting equation usefulness of an accounting equation accounting equations and transactions

  1. Capital (Rs. $15,000$)$=$Fixed Assets(Rs. $12,000$) $+$ Cash ($4,000$)

  2. Trade Payable (Rs. $3,000$) $+$ Capital (Rs. $17,000$) $+$ Bills Payable (Rs. $4,000$) $=$Fixed Assets (Rs. $20,000$)

  3. Capital (Rs. $15,000$) $=$Cash ($3,000$) $+$ Fixed Assets (Rs. $9,000$)

  4. Trade Payable (Rs. $8,000$) $+$ Capital (Rs. $7,000$) $=$Fixed Assets (Rs. $8,000$)$+$ Cash at bank (Rs. $4,000$)$+$Cash (Rs. $3,000$)

Show answer
Correct Option: D
Explanation:

Accounting Equation :- Total Assets = Capital+ Liabilities 

                                    = 15000 = 15000
Option D is Correct

In India __________ has a pre-dominant share in the debt market.

elements of book keeping and accountancy sub-division of journal - 2 (subsidiary books) explain the importance of preparing subsidiary books meaning and advantages of subsidiary books purchase book or purchase journal

  1. Government Securities

  2. Corporate Deposits

  3. Corporate Equities

  4. Global Depository Receipts

Show answer
Correct Option: A
Explanation:

Debt market refers to the financial market where investors buy and sell debt securities, mostly in the form of bonds. These markets are important source of funds, especially in a developing economy like India. India debt market is one of the largest in Asia. 

It is also the most dominant category in the India debt market. Bond Market: It consists of Financial Institutions bonds, Corporate bonds and debentures and Public Sector Units bonds.

The source document required for recording transactions in Purchase Return Book.

elements of book keeping and accountancy sub-division of journal - 2 (subsidiary books) explain the importance of preparing subsidiary books meaning and advantages of subsidiary books purchase book or purchase journal

  1. Debit note

  2. Credit note

  3. Cash memo

  4. Credit memo

Show answer
Correct Option: A
Explanation:

When the goods are returned a debit note is prepared and is sent to the supplier with the returned goods. An original copy is sent to the supplier, informing him of the amount for which his account has been debited on account of the returned goods. A duplicate copy of the debit note becomes the source document, on the basis of which entries are recorded in the purchase return book. Thus a debit note is required for recording the transactions in the Purchase return book.

In the purchase book, the record is in respect of _________.

elements of book keeping and accountancy sub-division of journal - 2 (subsidiary books) explain the importance of preparing subsidiary books meaning and advantages of subsidiary books purchase book or purchase journal

  1. Cash purchase of goods

  2. Credit purchase of goods dealt in

  3. All purchases of goods dealt in

  4. None of these

Show answer
Correct Option: B

Mr. N returns the goods of  50,000 purchased on credit to Mr. Z. This transaction will recorded by Mr. N in ______ and by Mr. Z in ______.

elements of book keeping and accountancy sub-division of journal - 2 (subsidiary books) explain the importance of preparing subsidiary books meaning and advantages of subsidiary books purchase book or purchase journal

  1. Sales Return Book, Purchases Return Book

  2. Purchases Return Book Sales Return Book

  3. Sales Return Book, Sales book

  4. Purchases Return Book, Purchase Book

Show answer
Correct Option: B