Recording of Transactions

Result

Recording of Transactions - I Test 14

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Question 1
1 / -0

Proprietor's A/c is a _______ account.

A
Personal

B
Real

C
Nominal

D
None of the above

Solution

Personal accounts are related to individuals, firms, companies, etc.
A few examples of personal accounts include debtors, creditors, banks, outstanding/prepaid accounts, accounts of credit customers, accounts of good suppliers, capital, drawings, etc.

There are three types of personal accounts:Natural, Artificial and Representative.
Natural personal accounts are the simplest of all and includes all God's creations who have ability to deal, who, in most cases, are people.
E.g. Kumar's A/c, Proprietor's A/c, Adam's A/c etc.
Question 2
1 / -0

Personal A/c can have _______.

A
Debit balance only

B
Credit balance only

C
No balance

D
All the three are possible
Solution
There are mainly three types of accounts: Real, Personal and Nominal accounts.
Personal accounts are related to individuals, firms, companies, etc. A few examples of personal accounts include debtors, creditors, banks, outstanding/prepaid accounts, accounts of good suppliers, accounts of credit customers, capital, drawings, etc. Personal a/c can have debit balance only, credit balance only and no balance. The debit balance of a personal account indicates debts owing by the person and credit balance indicates owing to the person concerned, For the business, the first one is accounts receivable or asset, while the second is accounts payable or liability.
The debit balance of all personal accounts on a certain date put together will make sundry debtors and the credit balance of all personal accounts put together will make sundry creditors.
Question 3
1 / -0

The balance of personal account shows ______.

A
Cash Balance

B
Profit and Loss

C
Amount due to or due from other persons, organization

D
Liquidity Position

Solution

There are mainly three types of account: Real, Personal and Nominal accounts. Personal accounts are classified into three subcategories: Artificial, Natural and Representative.
Personal accounts are related to individuals, firms, companies, etc. A few examples of personal accounts include debtors, creditors, outstanding/prepaid accounts, banks, accounts of credit customers, accounts of good suppliers, capital, drawings, etc. Natural personal accounts is the simplest to understand out of all and includes God's creations who have ability to deal, who, in most cases, are people. Artificial personal accounts are created artificially by law, such as corporate bodies and institutions. Representative personal accounts represent a certain person or a group directly or indirectly. The balance of personal account shows amount due to or due from other persons, organizations.
Question 4
1 / -0

Sales proceed of own flat put in business by proprietor would cause ____________.

A
Cash in hand and owners capital to increase

B
External liability to decrease

C
Total liabilities to increase

D
Total assets remain unchanged

Solution

The owner's capital is the part of the accounting equation that represents the liquid cash that the company has earned, which it has on hand for daily operations as well as capital investments. Sales proceed of own flat put in business will increase cash in hand of business (as it is capital investment) and ultimately increases owners capital as it is the addition to the existing cash balance of business.
Question 5
1 / -0

The difference between assets and liabilities is?

A
Bank overdraft

B
Retained profit

C
Capital or owner's equity

D
Creditors

Solution

The accounting equation displays that all assets are either financed by borrowing money or paying with the money of the company's shareholders. Thus, the accounting equation is: Assets = Liabilities + Owner's equity. The balance sheet is a complex display of this equation, showing that the total assets of a company are equal to the total of liabilities and owner's equity. The difference between assets and liabilities is capital or owner's equity i.e. Owner's equity = Assets - Liabilities.
Question 6
1 / -0

_______ accounts relates to expenses, losses, income, gain, revenue etc.

A
Personal a/c

B
Real a/c

C
Nominal a/c

D
Impersonal a/c

Solution

Accounts are classified in to three categories:
1) Personal Account i.e. Account of any person
2) Real Account i.e. Account of assets or things
3) Nominal Account i.e. Account of expenses, losses, income gain
For each nominal account, a separate account will be opened in the ledger.
Question 7
1 / -0

Which of the following is a Real A/c?

A
Building A/c

B
Preliminary Expenses

C
Discount received A/c

D
Ram Mohan A/c

Solution

There are mainly three types of accounts: Real, Personal and Nominal accounts. All assets of a firm, which are tangible or intangible, fall under the category "Real accounts". Tangible real accounts are related to those things that can be touched and physically felt. Few examples of tangible real accounts are buildings, machinery, stock, land, etc. Intangible real accounts are those which can't be touched and physically felt. Few examples of intangible real accounts are trademarks, patents, goodwill, etc.
Question 8
1 / -0

Cash withdrawn from bank for business purpose would cause ____________.

A
Increase in current assets

B
No change in assets and liabilities

C
Increase in owner's equity

D
Increase in new working capital

Solution

When cash withdrawn from bank then the amount is deducted from bank account and added in the cash account of business hence, there is no effect of this transaction on asset or liability side of balance sheet i.e. the effect of transaction is nullified.
Question 9
1 / -0

Bank A/c is a __________.

A
Real a/c

B
Nominal a/c

C
Personal a/c

D
Dummy a/c

Solution

Accounts recording transactions with a person or group of persons are known as personal accounts. These accounts are necessary, in particular, to record credit transactions. Personal accounts are of the following types:
1. Natural persons': An account recording transactions with an individual is termed as a natural persons' personal account.

2. Artificial or legal persons': An account recording financial transactions with an artificial person created by law or otherwise is termed as an artificial persons' personal account.

3. Representative personal account: An account indirectly representing a person or persons is known as representative personal account. When accounts are of similar nature and their number is large, it is better to group them under one head and open a representative personal account.

Bank account is a personal account as it is related to a banking firm, which is an artificial person. All those accounts which are related to a person, whether, artificial or natural, are termed as personal accounts.
Question 10
1 / -0

Purchase of RBI bonds for cash would lead to ____________.

A
No change in total assets

B
Total assets to decrease

C
Total assets to increase

D
Total liabilities to increase

Solution

Bonds are considered to be an investment and part of assets, similarly cash is also an asset. If RBI bonds are purchased that will increase the assets against the cash which is going to be reduced. Hence there will be no change in assets.

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Re-Attempt Weekly Quiz Competition

Recording of Transactions - I Test 14

Result

Recording of Transactions - I Test 14

Score

-

Rank

-

SHARING IS CARING

Question 1

Personal

Real

Nominal

None of the above

Solution

Question 2

Debit balance only

Credit balance only

No balance

All the three are possible

Solution

Question 3

Cash Balance

Profit and Loss

Amount due to or due from other persons, organization

Liquidity Position

Solution

Question 4

Cash in hand and owners capital to increase

External liability to decrease

Total liabilities to increase

Total assets remain unchanged

Solution

Question 5

Bank overdraft

Retained profit

Capital or owner's equity

Creditors

Solution

Question 6

Personal a/c

Real a/c

Nominal a/c

Impersonal a/c

Solution

Question 7

Building A/c

Preliminary Expenses

Discount received A/c

Ram Mohan A/c

Solution

Question 8

Increase in current assets

No change in assets and liabilities

Increase in owner's equity

Increase in new working capital

Solution

Question 9

Real a/c

Nominal a/c

Personal a/c

Dummy a/c

Solution

Question 10

No change in total assets

Total assets to decrease

Total assets to increase

Total liabilities to increase

Solution

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