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 recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

The purchase of supplies for cash will result in an _______________.

  1. Increase in cash and a decrease in capital

  2. Increase in cash and an increase in supplies

  3. Increase in supplies and a decrease in cash

  4. Increase in equipment and an increase in capital
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When supplies are purchased for cash, the asset 'Supplies' increases because you have acquired more of them, and the asset 'Cash' decreases because you paid money out. This is a direct asset exchange.

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

Location of the debit column is ____________.

  1. in contravention with particulars

  2. in front of the particulars column where the amount is debited

  3. in front of the particulars column where the amount is credited

  4. not present anywhere in the journal
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In a standard journal format, the debit column is located directly to the right of (in front of) the particulars column, aligning with the row where the debited account name is written.

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

Book keeping is meant to show all the transactions.

  1. Of the whole year

  2. Of the accounting period

  3. Of half year

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

Bookkeeping is designed to systematically record all financial transactions that occur within a defined accounting period, which could be a month, quarter, or financial year.

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

In the Sales Book ______ of goods recorded. 

  1. Cash sale

  2. Credit sale

  3. Budgeted sales

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

A Sales book is a record of all credit sales made by a business. It is one of the secondary book of accounts and unlike cash sales which are recorded in cash book, sales book is only to record credit sales.

The amount entered in the sales book is on behalf of invoices supplied to purchasers.

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

The total of the purchases day book is posted periodically to the debit of ________________.

  1. Purchases account

  2. Cash book

  3. Journal proper

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

The Purchases Day Book records all credit purchases of goods. Periodically, the total of this book is posted to the debit side of the Purchases Account in the general ledger to reflect the total increase in purchases.

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

Purchases day book records ________________.

  1. All cash purchases

  2. All credit purchases

  3. Credit purchases of trading goods

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

The Purchases Day Book is a subsidiary book used exclusively to record credit purchases of trading goods (inventory intended for resale). Cash purchases are recorded in the Cash Book, and credit purchases of assets like machinery are recorded in the Journal Proper.

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

Cash sales are recorded in ___________.

  1. Journal proper

  2. Sales Book

  3. Cash Book

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

All transactions involving the immediate receipt or payment of cash, including cash sales, must be recorded in the Cash Book. The Sales Book is reserved solely for credit sales of goods.

Multiple choice elements of book keeping and accountancy recording and posting of cash transactions explain the purpose of maintaining a cash book introduction, meaning and importance of cash book meaning and advantages of cash book

Cash purchases are recorded in _____________.

  1. Purchases Book

  2. Cash Book

  3. Purchases Returns Book

  4. Partly in Cash Book and partly in Journal Proper
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Cash purchases involve an immediate outflow of cash, meaning they must be recorded directly in the Cash Book. The Purchases Book is strictly used for credit purchases of goods.