Recording of Transactions

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Recording of Transactions - I Test 27

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Weekly Quiz Competition

Question 1
1 / -0

The total number of sales can be known from the ________.

A
Discount account

B
Cash book

C
Sales account

D
All of these

Solution

Credit sales are recorded through sales day book which is a subsidiary book.
Cash Sales are recorded through cash book.
At the end of a particular period , total of sales day books is transferred to the sales ledger. Each cash sales is posted in ledger.
Total of sales done by the business can be seen from the Sales Account in the ledger.
Question 2
1 / -0

Wages paid to Mohan for erecting a machine should be debited to ___________.

A
Wages A/c

B
Machine A/c

C
Mohans A/c

D
Cash A/c

Solution

'Wages paid' for the 'installation of machinery' should be debited to machinery account.
Explanation: It is the amount incurred for buying and installing the machine. The 'machinery account' is debited since the machine has to be put to use.
Question 3
1 / -0

Which of the following accounts will have a debit balance?

A
Furniture account

B
Capital account

C
Sales account

D
Commission earned account

Solution

Assets, expenses, losses, and the owner's drawing account will normally have debit balances.
Their balances will increase with a debit entry, and will decrease with a credit entry. Liabilities, revenues and sales, gains, and owner equity and stockholders' equity accounts normally have credit balances.
Question 4
1 / -0

The accounting equation i.e. Assets = Capital + liabilities is based on _________________.

A
Matching concept

B
Going concern concept

C
Cost concept

D
None of these

Solution

The accounting equation i.e. Assets = Capital + liabilities is based on the dual entry concept.
This equation is based on the Balance Sheet.
As per the Dual Entry Concept, for each transaction, there is an equal debit amount for each credit amount and vice versa.
Therefore, the correct answer for the above question is None of these.
Question 5
1 / -0

Debit may signify _______________.

A
Increase in Assets Account

B
Decrease in Assets Account

C
Increase in Liability Account

D
Increase in Capital Account

Solution

In bookkeeping, a debit can signify an increase in an asset, an expense, and the owner's draws. A debit can also signify a decrease in a liability, revenues, and owner's equity.
Question 6
1 / -0

Credits may signify _________________.

A
Decrease in Assets

B
Increase in Liability

C
Increase in capital account

D
All of these

Solution

The left side of all accounts, whether asset, liability or capital, is called debit and the right side is called as credit.
A credit may signify: An Increase in a liability or owner's equity account or a Decrease in an asset account.
Question 7
1 / -0

A business entity has assets of $$Rs. 2,60,000$$ and liabilities of $$Rs. 60,000$$. Owner's equity in this case is__________.

A
$$Rs. 3,20,000$$

B
$$Rs. 2,60,000$$

C
$$Rs. 2,00,000$$

D
$$Rs. 60,000$$

Solution

As per Accounting Equation
Assets = Liabilities + Capital
260,000 = 60,000 + Capital
Capital = 200,000
Question 8
1 / -0

Net worth of the business means _________________.

A
Total assets minus depreciation

B
Including expensene and debts.

C
Total assets minus total outside liabilities

D
Fixed assets minus current assets
Question 9
1 / -0

Investment in business by owner results in _______________.

A
increase in equity

B
decrease in liabilities

C
increase in income

D
decrease in assets

Solution

Any contribution made by the owner in the business is recorded as capital and to be shown as liability in the books of account of the business.
Owners equity is defined as capital plus reserves & surpluses.
If further capital is introduced , this will increase the owners equity.

Accounting entry will be as under:

Cash/Bank A/c Dr.
To Capital A/c
Question 10
1 / -0

X started business with a capital of $$Rs. 2,00,000$$ and purchased goods worth $$Rs. 20,000$$ on credit. These transactions may be expressed in the form of 'Accounting Equation' such as___________.

A
$$Rs. 2,20,000 = Rs. 2,00,000 + Rs. 20,000$$

B
$$Rs. 2,20,000 = Rs. 2,00,000 - Rs. 20,000$$

C
$$Rs. 20,000 = Rs. 2,00,000 - Rs. 2,00,000$$

D
$$Rs. 2,20,000 = 0 + Rs. 2,20,000$$

Solution

Here, Total Assets = (Cash) 200,000 + (goods)20,000 and Liabilities (creditor) = 20000 and Capital = 220,000
Therefore, accounting equation is
Assets = Capital + Liabilities
220,000 = 200, 000 + 20, 000

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Recording of Transactions - I Test 27

Result

Recording of Transactions - I Test 27

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SHARING IS CARING

Question 1

Discount account

Cash book

Sales account

All of these

Solution

Question 2

Wages A/c

Machine A/c

Mohans A/c

Cash A/c

Solution

Question 3

Furniture account

Capital account

Sales account

Commission earned account

Solution

Question 4

Matching concept

Going concern concept

Cost concept

None of these

Solution

Question 5

Increase in Assets Account

Decrease in Assets Account

Increase in Liability Account

Increase in Capital Account

Solution

Question 6

Decrease in Assets

Increase in Liability

Increase in capital account

All of these

Solution

Question 7

$$Rs. 3,20,000$$

$$Rs. 2,60,000$$

$$Rs. 2,00,000$$

$$Rs. 60,000$$

Solution

Question 8

Total assets minus depreciation

Including expensene and debts.

Total assets minus total outside liabilities

Fixed assets minus current assets

Question 9

increase in equity

decrease in liabilities

increase in income

decrease in assets

Solution

Question 10

$$Rs. 2,20,000 = Rs. 2,00,000 + Rs. 20,000$$

$$Rs. 2,20,000 = Rs. 2,00,000 - Rs. 20,000$$

$$Rs. 20,000 = Rs. 2,00,000 - Rs. 2,00,000$$

$$Rs. 2,20,000 = 0 + Rs. 2,20,000$$

Solution

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