Tag: accounting procedures - rules of debit and credit

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Questions Related to accounting procedures - rules of debit and credit

Multiple choice book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

Which is the most conventional system of accounting?

  1. Indian system

  2. Mahajani system

  3. Deshi Nama system

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

Indian, Mahajani, and Deshi Nama are all names for the same traditional, indigenous system of accounting used in India. Therefore, all these terms refer to the same conventional system.

Multiple choice book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

An entry which has more than one debit and or credit is called ________.

  1. single

  2. multiple

  3. compound

  4. none of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A compound entry is an accounting entry that involves more than one debit or more than one credit. It is used to record multiple transactions or complex events in a single journal entry.

Multiple choice book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

If cash discount is offered to customers, then which of the following would increase?

  1. Sales

  2. Debtors

  3. Debt collection period

  4. All of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
A cash discount is allowed by the organization to the customers to get the collection fast against the credit sales. Customer also do the trade off between the discount and the cost of funds. Offering cash discount may lead to increase in sales.
Multiple choice book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

The books to be compulsorily maintained by a company are ______________.

  1. Cash book and ledger

  2. Sales and purchase book

  3. Journal

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

All business transactions are recorded in the books of account depending on the nature of transaction. There are certain books which are compulsorily maintained by the business. 


Below are the books which are mandatory to maintained to record all the transactions:

1) Cash Book- It records all the cash transactions.

2) Sales & Purchase book- It records all credit sales and credit purchases.
3) Journal- It records those transactions which are not recorded in specific books. Purchase of assets etc.
4) Ledger- All above set of entries are to be posted in ledger to find out the balance of each account.

Multiple choice book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

Inventory holding cost may include ___________________.

  1. Material purchase cost

  2. Penalty charge for default

  3. Interest on loan

  4. None of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Inventory holding cost is that cost which is incurred by the organization to hold the unsold inventory. This cost includes the cost of storing the inventory, ordering cost, cost of storage space, cost of insurance of the inventory.