Recording of Transactions

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Recording of Transactions - I Test 39

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Weekly Quiz Competition

Question 1
1 / -0

Sales of the Scrap of raw materials appearing in the trial balance are shown on the credit side of _______.

A
Trading account

B
Manufacturing account

C
Profit and Loss A/c

D
None of these
Question 2
1 / -0

Journal is a book of __________.

A
original entry

B
all cash transactions

C
secondary entry

D
all non-cash transactions
Solution
As the transactions are recorded first time in journal therefore it is known as books of original entry.
Journal is sub divided into number of Subsidiary books. They 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 3
1 / -0

DEBIT signifies _________________.

A
Increase in assets account

B
Decrease in liability account

C
Decrease in capital account

D
All of the above

Solution

In book keeping there are two parts one is debit and other is credit. Debit is one half of the bookkeeping. Assets have a debit balance and hence an increase in the asset is debited, likewise liabilities have a credit balance and so a decrease in liabilities will be debited, Capital account has a credit balance as it is a liability for the company hence decrease in the capital account is debited as liability decreases.
Question 4
1 / -0

Journal and subsidiary books in which transactions and events are first recorded are known as _____________.

A
Secondary books.

B
Memorandum books.

C
Primary books.

D
Principal books.

Solution

Journal and subsidiary books in which transactions and events are first recorded are known as Primary books.
Primary book is a book or record in which certain types of transaction are recorded before becoming part of the double-entry book-keeping system.
Question 5
1 / -0

'A' owned Rs. 25,000 to 'B' 'A' becomes insolvent. 'B' got A's computer valuing Rs. 11,500 in his full settlement journal entry will be passed in the books of 'B'.

A
Purchase A/c Dr. 11,500

To A 11,500

B
Computer Dr 11,500

Bad-debts Dr. 13,500

To A 25,000

C
Computer A/c Dr. 25,000

To A 25,000

D
Computer A/c Dr. 11,500

Purchases A/c Dr. 13,500

To A 25,000

Solution

As computer is received valuing Rs. 11500 therefore, it will be debit. the remaining amount will not be received therefore, it will written off as bad debts loss and there is no amount due from A therefore, his account will be credited.
Question 6
1 / -0

What will be journal entry when cash is withdrawn from bank for personal use?

A
Drawings A/c debit, bank A/c credit

B
Cash A/c debit, drawings A/c credit

C
Bank A/c debit, drawings A/c credit

D
Bank A/c debit, capital A/c credit

Solution

Drawings are the amounts taken by the owner of a business for his personal use in anticipation of profit. Drawings are usually made in the form of cash, but there could be other assets or goods withdrawn by the owner for his personal use.
Journal Entry will be:-
Drawing A/c Dr.
To Bank A/c.
Question 7
1 / -0

If wages are paid for construction of business premises,_______A/c is credited and ____ A/c is debited.

A
Wages, Cash

B
Premises, Cash

C
Cash, Wages

D
Cash, Premises

Solution

If wages are paid for construction of business premises the amount of wages will be debited to the premises account because, according to IFRS, any expense that brings the asset to use or brings the asset in existence should be added to the cost of that machinery.
Cash account is credited because cash is being paid for incurring the wages.
Question 8
1 / -0

Discount is allowed by Arun to Varun. Which of the following should be the course of action in books of Arun?

A
Credit Varun A/c and debit discount allowed A/c

B
Debit Varun A/c and credit discount received A/c

C
Credit Arun A/c and debit discount allowed A/c

D
Debit Arun A/c and credit discount received A/c

Solution

Discount allowed is an expense and hence it should be debited and Varun's account should be credit as he is availing discount by Arun.

The Journal Entry to be passed:-
Discount allowed A/c Dr.
To Varun's A/c.
Question 9
1 / -0

Purchase of Pen for office use will be debited to __________ .

A
Pen A/c

B
Stationery Expense A/c

C
Any of the above

D
None of the above

Solution

Pen is considered as stationary for office. Therefore, Stationary A/c will be debited and cash will be credited.
Question 10
1 / -0

The accounting entries for recording Rs.10,00,000 cash introduced by the owner of a business is ______________.

A
Debit Cash account and Credit Capital account

B
Debit Cash account and Credit Investment account

C
Credit Cash account and Debit Investment in business account

D
Credit Cash account and Debit Owner's account

Solution

As cash is increasing therefore, cash account will be debited and capital will be credited.

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Re-Attempt Weekly Quiz Competition

Recording of Transactions - I Test 39

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Recording of Transactions - I Test 39

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SHARING IS CARING

Question 1

Trading account

Manufacturing account

Profit and Loss A/c

None of these

Question 2

original entry

all cash transactions

secondary entry

all non-cash transactions

Solution

Question 3

Increase in assets account

Decrease in liability account

Decrease in capital account

All of the above

Solution

Question 4

Secondary books.

Memorandum books.

Primary books.

Principal books.

Solution

Question 5

Purchase A/c Dr. 11,500 To A 11,500

Computer Dr 11,500Bad-debts Dr. 13,500To A 25,000

Computer A/c Dr. 25,000To A 25,000

Computer A/c Dr. 11,500Purchases A/c Dr. 13,500To A 25,000

Solution

Question 6

Drawings A/c debit, bank A/c credit

Cash A/c debit, drawings A/c credit

Bank A/c debit, drawings A/c credit

Bank A/c debit, capital A/c credit

Solution

Question 7

Wages, Cash

Premises, Cash

Cash, Wages

Cash, Premises

Solution

Question 8

Credit Varun A/c and debit discount allowed A/c

Debit Varun A/c and credit discount received A/c

Credit Arun A/c and debit discount allowed A/c

Debit Arun A/c and credit discount received A/c

Solution

Question 9

Pen A/c

Stationery Expense A/c

Any of the above

None of the above

Solution

Question 10

Debit Cash account and Credit Capital account

Debit Cash account and Credit Investment account

Credit Cash account and Debit Investment in business account

Credit Cash account and Debit Owner's account

Solution

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Purchase A/c Dr. 11,500

To A 11,500

Computer Dr 11,500

Bad-debts Dr. 13,500

To A 25,000

Computer A/c Dr. 25,000

To A 25,000

Computer A/c Dr. 11,500

Purchases A/c Dr. 13,500

To A 25,000