Tag: business transactions and source document

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Questions Related to business transactions and source document

Multiple choice elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

An outstanding bonds are also classified as _______________.

  1. standing bonds

  2. outdated bonds

  3. dated bonds

  4. seasoned bonds
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Seasoned bonds are bonds that have been outstanding for a significant period and are actively traded in the secondary market.

Multiple choice elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

A risk which is classified as its contribution to risk of portfolio is classified as __________.

  1. classified risk

  2. contributed risk

  3. irrelevant risk

  4. relevant risk
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Relevant risk is the risk that cannot be diversified away and is measured by its contribution to the risk of a portfolio, often represented by beta.

Multiple choice elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

The Reserve Bank of India has decided to help banks, as a temporary measure, by providing additional liquidity support under LAF. What is the full form of LAF?

  1. Loan Adjustment Fund

  2. Liquidity Adjustment Facility

  3. Long Awaited Funds

  4. Loan Against Funds
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

LAF stands for Liquidity Adjustment Facility, which is a tool used by the Reserve Bank of India to manage liquidity in the banking system.

Multiple choice elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

Source document are useful to record business transactions in the books of accounts.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The source document is essential to the bookkeeping and accounting process as it provides evidence that a financial transaction has occurred. During an accounting or tax audit, source documents back up the accounting journals and general ledger as an indisputable transaction trail.

Multiple choice elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

Cash memo is used for credit purchase/sale.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Whenever goods are sold in cash, a seller prepares a cash memo and records therein details of goods sold. This memo includes quantity, rate and total amount of goods sold, along with the date of transaction. 

All cash transactions are recorded in the books of accounts on the basis of the cash memos. 
A cash memo is prepared when goods are sold for cash. 
Thus, a cash memo is given by a trader in the case of sale and it is received in the case of purchases.
Cash memos are used for cash purchases/sales in order to record the credit purchases/sales, an invoice or bills are prepared by the seller.

Multiple choice elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

Trade discount allowed on the sales, if appearing in the trial balance, is shown in the final accounts ____________.

  1. on the debit side of trading account

  2. on the debit side of the profit and loss account

  3. by way of deduction from the sales in the trading account

  4. credit of profit & loss Account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Trade discount is a reduction from the list price. When it appears in the trial balance, it is deducted directly from sales in the trading account to arrive at net sales.

Multiple choice elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

When does a entry termed as a combined entry ____________________.

  1. If two transactions of one company are involved

  2. If there is debit and credit both

  3. Transactions are of the same nature and they take place on the same day.

  4. An the accounts are debited the very same day
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A combined entry (or compound entry) is used when multiple accounts are affected by transactions of the same nature occurring on the same day.

Multiple choice elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

Port Trust dues are payable by _________________.

  1. The forwarding agent

  2. Importer

  3. Exporter

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

The 'Landing and Shipping DuesOffice' levies a charge for services of dock authorities which has to be borne by the importer. After payment of dock charges, the importer is given back one copy of the application as a receipt. This receipt is is known as 'port trust dues receipt'.

Multiple choice elements of accounts origin of transactions - source documents and preparation of vouchers business transactions and source document source documents voucher and transactions

Import procedure begins with _____________.

  1. Indent

  2. Marine insurance

  3. Mate's certificate

  4. Shipping order
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 Indent orders are orders that are placed for products produced offshore. It generally is for a large quantity of standard or custom made products manufactured overseas and due to the higher volumes, the price per unit is lower.


After the initial formalities are over and the importer has obtained the licence quota and the necessary amount of foreign exchange, the next step in the import of goods is that of placing the order. This order is known as Indent.