Recording of Transactions

Result

Recording of Transactions - I Test 42

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Weekly Quiz Competition

Question 1
1 / -0

The amount of salary paid to Suresh should be debited to _____________.

A
The account of Suresh

B
Salaries a/c

C
Cash a/c

D
Bank a/c

Solution

All expense and income accounts are classified as nominal account. Rule for nominal account describe that all expense and losses should be debited and all incomes and gains should be credited.
payment of salary to Suresh is an expense which need to be debited to salary account.
Accounting entry will be as under:

Salary Expense A/c Dr.
To Cash A/c
Question 2
1 / -0

Cash discount allowed to a debtor should be credited to the _________ account.

A
Discount

B
Customer's

C
Sales

D
Cash

Solution

Discount are of two types i.e trade discount and cash discount. Cash discount are allowed to the customer to speed up the collection of cash from the customers. To speed up the cash collection, company may allow a cash discount. Cash discount is a loss to the company and should be debited to the discount account by giving credit to customer account.
For example, Good worth Rs.5000 is sold to Ramesh with a credit period of 30 days with a cash discount clause of 1% if the payment is done within 15 days. Ramesh has settled the full amount in 14 days. The accounting entry will be as under:

Cash A/c Dr. Rs.4950
Discount A/c Dr. Rs.50
To Ramesh A/c Rs.5000
Question 3
1 / -0

Payment of salary is recorded by ____________.

A
Debiting salary a/c; crediting cash a/c

B
Debiting cash a/c; crediting salary a/c

C
Debiting employee a/c; crediting cash a/c

D
Debiting employee a/c; crediting salary a/c

Solution

Every business transaction affects two accounts as accounting is based on double entry system of accounting. For every debit there will be a credit and vice versa.

Accounting entry for payment of salary will be:

Salary A/c Dr. (debit all the expense)
To Cash A/c (credit what goes out)

Salary is an expense and will be charged to profit & loss account.

Question 4

1 / -0

Purchases of goods on credit from A is recorded as __________.

Debit purchases a/c; credit cash a/c

Debit A a/c; credit purchases a/c

Debit purchases a/c; credit A a/c

Debit A a/c; credit stock a/c

Solution

Accounting is based on double entry system of accounting. Every business transaction will affects two account i.e purchase account and Mr. A's a/c.

Accounting entry will be as under:

Particulars	Debit	Credit
Purchases A/c Dr	xxx
To Mr. A		xxx
(Being the credit purchases from A)

Question 5
1 / -0

The books to be compulsorily maintained by a company are ______________.

A
Cash book and ledger

B
Sales and purchase book

C
Journal

D
All of the above

Solution

All business transactions are recorded in the books of account depending on the nature of transaction. There are certain books which are compulsorily maintained by the business.

Below are the books which are mandatory to maintained to record all the transactions:

1) Cash Book- It records all the cash transactions.
2) Sales & Purchase book- It records all credit sales and credit purchases.
3) Journal- It records those transactions which are not recorded in specific books. Purchase of assets etc.
4) Ledger- All above set of entries are to be posted in ledger to find out the balance of each account.
Question 6
1 / -0

Which of the following statements best explains the relationship between journal and ledger?

A
First recording in journal and then positing to ledger completes the double entry of the transaction

B
The journal is the book of original entry, where as the ledger is the book of second entry

C
The journal is the book for analytical record and ledger is the book for chronological record

D
The process of recording, in the journal is called journalising, the process of recording in the ledger is called posting

Solution

Book of original entry refers to journal where all the business transactions are recorded first in chronological order whereas ledger is a book which records all journal entries in individual ledger account.
Question 7
1 / -0

Which of the following transactions will result in decrease in assets and decrease in liabilities?

A
Payment of a promissory note with cash

B
Materials returned to supplier on account

C
Redemption of debentures

D
All of these

Solution

1) Payment of promissory not with cash- liability and cash (assets) decreases.
2) Material return to supplier- Creditors (liability) and goods (assets) decreases
3) Redemption of debenture-Debenture (liability) and cash(assets) decreases.
Question 8
1 / -0

A credit sale of goods to Shivendra should be debited to ______ account.

A
Sales

B
Goods

C
Shivendra's

D
Purchase

Solution

Goods sold to Shivendra on credit will affect two account i.e. goods account and Shivendra's account. Rule of personal account defines that "debit the receiver" hence Shivendra account will be debited.
Question 9
1 / -0

Rent paid to landlord should be credited to _________ account.

A
Landlords

B
Rent

C
Cash

D
Expense

Solution

Accounting is based on dual concept. Every transaction give two affects i.e. for every debit there will be a credit.
Rent paid to landlord, involves two account i,e. Rent and cash.
Rent is an expenses which is a nominal account
Cash is a real account.

Following the golden rules, accounting entry will be as under:

Rent A/c Dr. (Debit all expenses and losses)
To Cash A/c (Credit what goes out)
Question 10
1 / -0

In case of a debt becoming bad, the amount should be credited to _______________.

A
Debtors Accounts

B
Bad debts A/c

C
Sales A/c

D
None of these

Solution

In the normal course of business, there are certain customer who does not pay the amount to the business despite regular follow ups. The unrecoverable amount is considered as bad debts. Bad debts is a loss to the organization and should be debited to profit & loss account by crediting the customer account.

Accounting entry will be as under:
Bad Debts A/c Dr.
To Customer (Debtor) A/c

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Re-Attempt Weekly Quiz Competition

Recording of Transactions - I Test 42

Result

Recording of Transactions - I Test 42

Score

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Rank

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SHARING IS CARING

Question 1

The account of Suresh

Salaries a/c

Cash a/c

Bank a/c

Solution

Question 2

Discount

Customer's

Sales

Cash

Solution

Question 3

Debiting salary a/c; crediting cash a/c

Debiting cash a/c; crediting salary a/c

Debiting employee a/c; crediting cash a/c

Debiting employee a/c; crediting salary a/c

Solution

Question 4

Debit purchases a/c; credit cash a/c

Debit A a/c; credit purchases a/c

Debit purchases a/c; credit A a/c

Debit A a/c; credit stock a/c

Solution

Question 5

Cash book and ledger

Sales and purchase book

Journal

All of the above

Solution

Question 6

First recording in journal and then positing to ledger completes the double entry of the transaction

The journal is the book of original entry, where as the ledger is the book of second entry

The journal is the book for analytical record and ledger is the book for chronological record

The process of recording, in the journal is called journalising, the process of recording in the ledger is called posting

Solution

Question 7

Payment of a promissory note with cash

Materials returned to supplier on account

Redemption of debentures

All of these

Solution

Question 8

Sales

Goods

Shivendra's

Purchase

Solution

Question 9

Landlords

Rent

Cash

Expense

Solution

Question 10

Debtors Accounts

Bad debts A/c

Sales A/c

None of these

Solution

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