accounts from incomplete records Test

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accounts from incomplete records Test - 11

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Weekly Quiz Competition

Question 1
1 / -0

A statement similar to balance sheet is nothing but the _________.

A
statement of affairs

B
statement of profit and loss

C
balance sheet

D
cash flow statement

Solution

Under single entry system to find out net profit or loss for the year opening capital is deducted from closing capital. In order to find this capital the statements of affairs are prepared were, assets are deducted from liabilities. Hence, this is similar to balance sheet.
Question 2
1 / -0

Profit under single entry system of Book Keeping means ______________.

A
The difference between opening and closing cash balances and reduced by fresh capital introduced.

B
The difference between opening net assets and closing net assets as increased by drawings and reduced by new capital introduced.

C
Profit shown by Trading and Profit and Loss Account and Balance sheet.

D
The amount of closing cash balance as reduced by expenses.

Solution

When there is no double entry system of accounting is followed, the profits are calculated on the basis of comparing the opening and closing of capital/assets by giving the effect of drawings.
This can be represented as:

Closing Capital xxxxx
Add: Drawings xxxxx
Less: Fresh capital xxxxx
Less: Opening Capital xxxxx
Balance will be Profit xxxxx
Question 3
1 / -0

Rs. 19,500 debited to building repairs on 31 st Dec. 1993 inclined Rs. 9,500 as the cost of building a small room for the watch man. A bill of Rs. 800 for colour wash of the whole building during the year was not received till Dec. 1993. The amount to be debited to profit and loss account would be _____________.

A
Rs. 20,300

B
Rs. 19,500

C
Rs. 10,800

D
Rs. 9,500
Question 4
1 / -0

Company accounting conforms more to dual aspect concept than to incomplete recording system because.
I. Companies Act insists upon the adoption of double entry systems of book keeping.
II. Balance sheet could not be prepared under sec. $$211$$ of Company's Act according to the incomplete recording system
III. To show true and fair view of the affairs of the company
IV. To ensure adequate disclosure.
Select the correct answer from the codes given and mark your answer sheet accordingly.

A
I and II

B
II and III

C
II, III and IV

D
I, II and III

Solution

The dual aspect concept states that every business transaction requires recordation in two different accounts. This concept is the basis of double entry accounting, which is required by all accounting frameworks in order to produce reliable financial statements.
Question 5
1 / -0

The Receipts and Payments A/c would begin with ___________ balance.

A
No

B
Debit

C
Credit

D
Either debit or credit

Solution

Account receivable account having debit balance. Account receivable are normally collected within a short period, such as 30 or 60 days. They are classified on the balance sheet as a current assets. The most common transaction creating a receivable is selling merchandise or services on credit.
Question 6
1 / -0

Excess of closing capital over opening capital of proprietor under single entry system.

A
Profit

B
Loss

C
No Profit No Loss

D
Capital

Solution

Profit or loss earned by the business under single entry system is based on the difference between its opening and closing capital.
Hence, if the sum of capital on the last day of the financial year is more then opening capital on the first day of financial year then it is considered as a Profit.
eg. if the opening capital is Rs . 1,00,000 and closing capital is Rs. 1,30,000 than Closing capital - Opening capital will give a Positive Rs.30,000 resulting a Profit.
Question 7
1 / -0

An excess of assets over liabilities is called as ________.

A
Profit

B
Loss

C
Capital

D
No profit No loss

Solution

Total assets are either created or purchased through funds raised by business through internal and external sources.
when businessman invests his own money into business it is termed as capital.
when business borrows money from external sources like Bank , Lenders etc an obligation is raised for repayment in future called Liability .
Therefore, Capital + Liabilities = Assets
Hence, Asset - Liabilities = Capital.
Question 8
1 / -0

Excess of opening capital over closing capital of proprietor under single entry system is called __________.

A
Profit

B
Loss

C
No profit No loss

D
Revenue

Solution

Profit or loss earned by the business under single entry system is based on the difference between its opening and closing capital.
Hence, if the sum of capital from which the trader starts the year is less than closing capital on the last day of the financial year than it is considered a loss.
e.g. if the opening capital is Rs . 1,00,000 and closing capital is Rs. 90,000 then Closing capital - Opening capital will give a negative Rs.10,000 resulting a Loss.
Question 9
1 / -0

Method of accounting in which nominal accounts are not maintained is ____________.

A
Single entry system

B
Double entry system

C
Financial accounting

D
Book keeping and accountancy

Solution

Profit or loss earned by the business under single entry system is based on the difference between its opening and closing capital.
Hence, such capitals are a result of Statement of affairs which is based on an equation Capital = Assets - Liabilities this equation comprises of only personal and real accounts.
Hence, nominal accounts are not maintained under single entry system.
Question 10
1 / -0

Profit as per accounts from incomplete records may be constructed as equivalent of _____________.

A
Excess of assets over liabilities at the close of the period

B
Excess of capital at the end over the capital at the beginning

C
Excess of assets over liabilities at the commencement of the period

D
Excess of capital at the beginning over the capital at the end

Solution

Incomplete records - Accounting records, which are not strictly kept according to double entry system are known as incomplete records. Many authors describe it as single entry system. However, single entry system is a misnomer because there is no such system of maintaining accounting records. It is also not a ‘short cut’ method as an alternative to double entry system.

In this system of accounting, profit is ascertained as :

Profit = Capital at the end + Drawings - Capital in the beginning.

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accounts from incomplete records Test - 11

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accounts from incomplete records Test - 11

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SHARING IS CARING

Question 1

statement of affairs

statement of profit and loss

balance sheet

cash flow statement

Solution

Question 2

The difference between opening and closing cash balances and reduced by fresh capital introduced.

The difference between opening net assets and closing net assets as increased by drawings and reduced by new capital introduced.

Profit shown by Trading and Profit and Loss Account and Balance sheet.

The amount of closing cash balance as reduced by expenses.

Solution

Question 3

Rs. 20,300

Rs. 19,500

Rs. 10,800

Rs. 9,500

Question 4

I and II

II and III

II, III and IV

I, II and III

Solution

Question 5

No

Debit

Credit

Either debit or credit

Solution

Question 6

Profit

Loss

No Profit No Loss

Capital

Solution

Question 7

Profit

Loss

Capital

No profit No loss

Solution

Question 8

Profit

Loss

No profit No loss

Revenue

Solution

Question 9

Single entry system

Double entry system

Financial accounting

Book keeping and accountancy

Solution

Question 10

Excess of assets over liabilities at the close of the period

Excess of capital at the end over the capital at the beginning

Excess of assets over liabilities at the commencement of the period

Excess of capital at the beginning over the capital at the end

Solution

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