Tag: functions, advantages, objects and importance of 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

The periodic total of purchase return journal is posted to ______________.

  1. Purchase Account

  2. Profit and loss Account

  3. Purchase return Account

  4. Furniture Account
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Posting from the purchases returns journal requires that the supplier's individual accounts are debited with the amount of returns and the purchases returns account is credited with the periodic total.

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

The periodic total of sales return journal is posted to_________.

  1. Sales Account

  2. Goods Account

  3. Purchase return account

  4. Sales return account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Posting to the sales return journal requires that the customer's account be credited with the amount of return and the sales return account be debited with the periodic total in the same way as is done in case of posting from purchase journal.

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

Credit purchase of machine is entered in purchase journal.

  1. True

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

Accounting and journal entry for credit purchase includes two accounts, Creditor and Purchase.

In case of a journal entry for cash purchase, Cash account and Purchase account are used. 
The person to whom the money is owed is called a “Creditor” and the amount owed is a current liability for the company.

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

Return of goods purchased on credit to the suppliers will be entered in _________ journal.

  1. Purchase return

  2. Sales return 

  3. Purchase and sales return 

  4. Goods purchase
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Return of goods purchased on credit to the supplier is recorded in the Purchase return journal. Sometimes goods purchased are returned to the supplier for various reasons such as goods are not of the required quality, or are defective, etc. For every return, a debit note is prepared , the original one is sent to the supplier for making necessary entries in his book and on the basis of duplicate copy of debit note entry is recorded in purchase return journal.

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 purchased goods costing Rs. 1,00,000. B sold the. goods for Rs. 1,60,000. Profit sharing ratio between A and B being equal, what will be the final remittance ?

  1. B will remit Rs. 1,30,000 to A

  2. B will remit Rs. 1,55,000 to A

  3. A will remit Rs. 1,05,000 to B

  4. B will remit Rs. 30,000 to A
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A spent 1,00,000. Total sales were 1,60,000. Profit is 60,000. Shared equally, each gets 30,000 profit. A invested 1,00,000 and is entitled to 30,000 profit, total 1,30,000. Since B collected 1,60,000, B must remit 1,30,000 to A.

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 Y takes away goods in personal business under memorandum joint venture method, then he will debit these goods in his books to ________________.

  1. Joint venture account

  2. Personal account

  3. Purchases account

  4. Sales A/c
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under the memorandum joint venture method, when a venturer takes goods for personal use, it is treated as a purchase by that venturer and debited to their Purchases 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

When a large number of articles are sent on a sale or return basis, it is necessary to maintain __________________.

  1. Sale journal

  2. Goods returned journal

  3. Sale or return journal

  4. Any one of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

When goods are sent on a sale or return basis in large quantities, a separate 'Sale or Return Journal' is maintained to track these transactions until they are finalized as actual sales.

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

P and Q enter into a Joint Venture sharing profits and losses in the ratio 3:2. P purchased goods costing Rs. 2,00,000. Other expenses of P Rs. 20,000. Q, sold the goods for Rs. 2,00,000. Remaining goods were taken over by Q at Rs. 10,000. The amount of final remittance to be paid by Q to P will be ______________.

  1. Rs. 2,10,000

  2. Rs. 2,14,000

  3. Rs. 2,20,000

  4. None
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

P's total investment = 2,00,000 + 20,000 = 2,20,000. Total sales = 2,00,000 + 10,000 (goods taken by Q) = 2,10,000. Loss = 2,20,000 - 2,10,000 = 10,000. P's share of loss (3/5) = 6,000. Q's share of loss (2/5) = 4,000. Q owes P for goods taken (10,000) and must pay P's net claim. Actually, P spent 2,20,000 and Q collected 2,00,000 cash. Q owes P 2,20,000 - 6,000 (P's loss) = 2,14,000.