Tag: understand the need for journal

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Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

_______ is used to record the details of bills receivable by the business organization. 

  1. Purchases Book

  2. Bills Payable Book

  3. Bills Receivable Book

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

The Bills Receivable Book is a subsidiary book specifically designed to record the details of all bills of exchange received from debtors.

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

A purchase of goods from Nathan amounting to Rs. 3,000 has been wrongly entered in the Sales Book. However Nathan Account has been correctly credited. Which of the following rectification entry is correct? 

  1. Sales A/c Dr. 3,000

    To Nathan A/c 3,000

  2. Purchases A/c Dr. 3,000

    To Sales A/c 3,000

  3. Sales A/c Dr. 3,000

    Purchases A/c Dr. 3,000

    To Suspense A/c 6,000

  4. Sales A/c Dr. 3,000

    Purchases A/c Dr. 3,000

    To Nathan A/c 6,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

_______is used to record the particulars of all the bills payable accepted by the business organization for the purpose of paying amounts due to its creditors.

  1. Journal proper

  2. Bills Payable Book

  3. Bills Receivable Book

  4. Sales Book
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Bills Payable Book is the specialized journal used to record the details of all bills of exchange accepted by a business to pay its creditors.

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

A contractor's bill for extension of premises amounting to Rs. 27,500 has been debited to Building Repairs Account. Which of the following rectification entry is correct?

  1. Budding A/c Dr. 27,500

    To Building Repairs A/c 27.500

  2. Building A/c Dr. 27,500

    To Suspense A/c 27,500

  3. Building Repairs A/c Dr. 27,500

    To Suspense A/c 27,500

  4. Building Repairs A/c Dr. 27,500

    To Building A/c 27,500
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Capital expenditure (extension of premises) was wrongly debited to a revenue account (Building Repairs). To rectify, we must debit the asset account (Building) and credit the incorrectly debited expense account (Building Repairs).

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

A cheque for Rs. 7,330 was received from Rao after allowing him a discount of Rs. 70. It was endorsed in favour of Sen in full settlement of Rs. 7,500. The cheque was dishonoured, but no entry for dishonour was passed in the books. If this error located after preparation of final account then which of the following rectification entry is correct? 

  1. Rao A/c Dr. 7,400

    Profit & Loss Adj. A/c Dr. 100

    To Sen A/c 7,500

  2. Rao A/c Dr. 7,400

    Profit & Loss Adj. A/c Dr. 100

    To Suspense A/c 7,500

  3. Rao A/c Dr. 100

    Profit & Loss Adj. A/c Dr. 7,400

    To Sen A/c 7,500

  4. Rao A/c Dr. 100

    Profit & Loss Adj A/c Dr. 7,400

    To Suspense A/c 7,500
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When an endorsed cheque is dishonoured, the debtor (Rao) must be debited for the full amount (7,330 + 70 = 7,400) and the creditor (Sen) must be credited for the full settlement amount (7,500). The difference (100) represents the lost discount, which is adjusted through the Profit & Loss Adjustment account.

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

If conversion cost is 25000 and direct manufacturing labour cost is 25000 and direct manufacturing labour cost is 17000, then manufacturing overhead cost would be _________.

  1. $14, 700

  2. $68, 000

  3. $8, 000

  4. $42, 000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Conversion cost includes direct labour and manufacturing overhead. Given conversion cost is Rs. 25,000 and direct manufacturing labour is Rs. 17,000, manufacturing overhead must be the difference: Rs. 25,000 - Rs. 17,000 = Rs. 8,000. The question appears to have some repetition in the text but the calculation is straightforward.

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

Reorder point is divided by number of sold units for per unit of time to calculate ________________.

  1. relevant carrying cost

  2. relevant ordering cost

  3. purchase order lease time

  4. number of purchase orders
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The reorder point formula relates to the lead time. Dividing the reorder point by the usage rate per unit of time yields the lead time (purchase order lead time).

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

Second ranked product in incremental revenue allocation method is termed as __________.

  1. primary product

  2. First incremental product

  3. Second incremental product

  4. Third incremental product
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In incremental revenue allocation, the first product is the primary product, and subsequent products are ranked as first, second, etc., incremental products.

Multiple choice elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

Subsidiary book in which return of goods purchased on credit is recorded ____________.

  1. Sales book

  2. Purchase book

  3. Sales return book

  4. Purchase return book
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Return of goods, purchased on credit is recorded under Purchase Return Book or return outward book. Purchase book shows a debit balance, so purchase return book will show credit balance. While returning the goods buyer sent a "debit note" to the seller. The debit note contains the quantity of returned goods and reason of returning goods. The original copy of debit not is sent to the supplier for making necessary entries in his book and on the basis of duplicate copy entries are made in Purchase return book.