Recording of Transactions

Result

Recording of Transactions - I Test 37

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Weekly Quiz Competition

Question 1
1 / -0

Which of the financial statement represents the accounting equation?

A
Manufacturing account

B
Cash flow statement

C
Balance sheet

D
Profit and loss account

Solution

Balance Sheet represent Accounting Equation as in right side capital and liabilities are recorded whereas in left side of balance sheet Total assets are recorded and this sheet is always self- balanced which proves that Total Asset = Liabilities + Capital
Question 2
1 / -0

Goods destroyed by fire is an example of __________.

A
Decrease in Assets and Owners Equity

B
Increase in Asset & Owner's Equity

C
Decrease in Liability & Owner's Equity

D
None of these

Solution

Goods Destroyed by Fire implies that there is a decrease in the number of goods. Goods are current assets for the business therefore, there is a decrease in assets.
Due to this transaction, there is a loss to the business which will result in a decrease in capital.
Therefore, Goods destroyed by fire is an example of Decrease in Assets and Owners Equity
Question 3
1 / -0

Bad debts written off is an example of ___________.

A
Increase in Asset & Owner's Liability

B
Decrease in Asset & Owner's Liability

C
Increase in Liability & Owner's Liability

D
Decrease in Liability & Increase in Owner's Liability

E
Increase in Liability & Decrease in Owner's Liability

Solution

Bad debts are debtors who have not made payments to the company.
Bad debts are expense so, there will be a decrease in capital and debtors is an asset which will be reduced.
Therefore, Decrease in Asset & Owner's Liability.
Question 4
1 / -0

An example of increase in assets and increase in owner's capital is __________.

A
Goods purchased for cash

B
Goods purchased on credit

C
Goods brought in by owner

D
Capital introduced by owner

Solution

When capital is introduced by the owner then the cash will increase as well as capital will also increase.
Capital means the Amount invested by the Owner of the Business into the business.
As the business entity Concept, the Owner of the business is considered separate from the business. The amount invested by the Owner of the Business into the business.is known as Capital.
When the businessman withdraws some amount from the business for personal use then it is known as the drawings.
Question 5
1 / -0

Capital is the __________________.

A
excess of external liabilities over the assets

B
excess of assets over the external liabilities

C
excess of external liabilities over fixed assets

D
excess of assets of over internal liabilities

Solution

Total assets - external liabilities = capital of the company (paid - up capital)
This should not be confused with the net worth of the company.
Question 6
1 / -0

Discount Received is an example of __________.

A
Increase in Asset & Owner's Liability

B
Decrease in Asset & Owner's Liability

C
Increase in Liability & Owner's Liability

D
Decrease in Liability & Increase in Owner's Liability

E
Increase in Liability & Decrease in Owner's Liability

Solution

Discount received is an indirect income of the business. it is shown in the credit side of profit and loss account.
When discount is received, debt amount is reduced and increase in income.
Therefore, there will be decrease in Liability & Increase in Owner's Liability.
Question 7
1 / -0

Depreciation written off is an example of ________.

A
Increase in Asset & Owner's Liability

B
Decrease in Asset & Owner's Liability

C
Increase in Liability & Owner's Liability

D
Decrease in Liability & Increase in Owner's Liability

E
Increase in Liability & Decrease in Owner's Liability

Solution

Depreciation written off is an expense and the amount written off will be deducted from the asset and the same will be decreased from owners equity. It is an expense and hence will be debited to the profit and loss account which will eventually reduce owner's equity.
Question 8
1 / -0

Goods distributed as free samples is an example of _________.

A
No change in Owner's Equity

B
Increase in Asset & Owner's Equity

C
Decrease in assets & Owner's Equity

D
None of these

Solution

Distribution of goods as free samples is an indirect expense of a business entity, therefore, it will reduce the capital of the business.
The Journal Entry will be:-
Free Samples a/c Dr.
To Purchases a/c
So, there will be a decrease in owners equity and a decrease in stock.
Question 9
1 / -0

Sale Return Book is a part of _______.

A
Journal.

B
Ledger.

C
Cash Book.

D
none of these.
Solution
Sales Return Book is the part of Journal.
Journal is divided into the number of subsidiary books. The main subsidiary books are
- Cash book.
- Purchases book.
- Sales book.
- Purchases return or return outwards book.
- Sales return or return inwards book.
- Bills receivable book.
- Bills payable book.
- Journal proper
Question 10
1 / -0

Making Provision for Doubtful Debts is an example of ___________.

A
Increase in Asset & Owner's Liability

B
Decrease in Asset & Owner's Liability

C
Increase in Liability & Owner's Liability

D
Decrease in Liability & Increase in Owner's Liability

E
Increase in Liability & Decrease in Owner's Liability

Solution

Provision for Doubtful Debts is a liability for the business. it is the charge against the profit. It is created as per the conservatism Concept. It reduces the amount of debtors. Debtors are Assets for the business.
Therefore, there will be a decrease in assets and capital.

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Re-Attempt Weekly Quiz Competition

Recording of Transactions - I Test 37

Result

Recording of Transactions - I Test 37

Score

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Rank

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SHARING IS CARING

Question 1

Manufacturing account

Cash flow statement

Balance sheet

Profit and loss account

Solution

Question 2

Decrease in Assets and Owners Equity

Increase in Asset & Owner's Equity

Decrease in Liability & Owner's Equity

None of these

Solution

Question 3

Increase in Asset & Owner's Liability

Decrease in Asset & Owner's Liability

Increase in Liability & Owner's Liability

Decrease in Liability & Increase in Owner's Liability

Increase in Liability & Decrease in Owner's Liability

Solution

Question 4

Goods purchased for cash

Goods purchased on credit

Goods brought in by owner

Capital introduced by owner

Solution

Question 5

excess of external liabilities over the assets

excess of assets over the external liabilities

excess of external liabilities over fixed assets

excess of assets of over internal liabilities

Solution

Question 6

Increase in Asset & Owner's Liability

Decrease in Asset & Owner's Liability

Increase in Liability & Owner's Liability

Decrease in Liability & Increase in Owner's Liability

Increase in Liability & Decrease in Owner's Liability

Solution

Question 7

Increase in Asset & Owner's Liability

Decrease in Asset & Owner's Liability

Increase in Liability & Owner's Liability

Decrease in Liability & Increase in Owner's Liability

Increase in Liability & Decrease in Owner's Liability

Solution

Question 8

No change in Owner's Equity

Increase in Asset & Owner's Equity

Decrease in assets & Owner's Equity

None of these

Solution

Question 9

Journal.

Ledger.

Cash Book.

none of these.

Solution

Question 10

Increase in Asset & Owner's Liability

Decrease in Asset & Owner's Liability

Increase in Liability & Owner's Liability

Decrease in Liability & Increase in Owner's Liability

Increase in Liability & Decrease in Owner's Liability

Solution

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