Recording of Transactions

Result

Recording of Transactions - I Test 45

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Question 1
1 / -0

Fixed Deposit Account is _________.

A
Real

B
Personal

C
Nominal

D
All of the above

Solution

Accounts relating to properties or assets are known as "Real Accounts". A separate account is maintained for each asset e.g. Cash, Machinery, Building, etc. Real accounts are further classified into tangible and intangible.
1. Tangible real accounts: These accounts represents assets and properties which can be seen, touched, felt, measured, purchased and sold. For e.g. Machinery account, Cash account, Furniture account, Stock account, etc.
2. Intangible real accounts: These accounts represent assets and properties which cannot be seen, touched or felt. For e.g. Goodwill accounts, Patents accounts, Trademarks accounts, etc.
Fixed Deposit account is an asset of the business. Hence, it is classified as a real account.
Question 2
1 / -0

Left hand side of an account is ________.

A
Debit side

B
Credit side

C
Income side

D
Expenses side

Solution

Debt and credit are two important terms used in Book-keeping and Accountancy. These two terms form the very basis of recording transactions in the books of accounts.
Left hand side of the account is called debit side. Hence, to debit an account means to record the transaction on the left hand side of the account. It is abbreviated as 'Dr.' The word 'debit' is originated from the Latin word 'Debitum' and it means what is due.
Whenever an asset increases, or equity or a liability decreases, a debit entry will be made in the appropriate account. Whenever an asset decreases, or equity or a liability increases, a credit entry will be made in the appropriate account. the difference between the two sides of an account can be calculated. This difference is called the balance of an account.
Question 3
1 / -0

Wages paid for installation of asset should be debited ___________ A/c.

A
Wages

B
Asset

C
Cash

D
Suspense

Solution

Any expenditure incurred on the carriage and installation of asset such as freight, transit expenses, installation expenses, wages etc, should be treated as capital expenditure and should be debited to the Asset A/c. This expenditure is non-recurring in nature and, thus, added to the value of the asset. Thus, it should be debited to the Asset A/c and not to the Wages A/c.
Question 4
1 / -0

Loss by Fire Account __________.

A
Real

B
Personal

C
Nominal

D
All of the above

Solution

Accounts relating to income, revenue, gain, expenss and losses are termed as nominal accounts. These accounts are also known as fictitious assets as they do not represent any intangible asset. A separate account is maintained for each head or expense or loss and gain or income. Wages account, Rent account, Commission account, interest received account are some examples of nominal accounts.
Loss by fir is a loss for a business. Hence, it is classified as a nominal account.
Question 5
1 / -0

Transaction related to assets are recorded in __________.

A
Real account

B
Personal account

C
Nominal account

D
None of the above

Solution

There are mainly three types of accounts: Real, Personal and Nominal accounts. Personal accounts are classified into three subcategories: Artificial, Natural and Representative.
All assets of a firm, which are tangible or intangible, fall under the category "Real Accounts". Tangible real accounts are related to things that can be touched and felt physically, whereas, intangible real accounts are related to things that can't be touched and felt physically. The golden rule for real accounts is Debit what comes in, credit what goes out.
Question 6
1 / -0

Sub-division of journal is known as _______ book.

A
Subsidiary

B
Purchase return

C
Purchase

D
Journal proper

Solution

Subsidiary books are those books of original entry in which transactions of similar nature are recorded at one place and in chronological order. In a big concern, recording of all transactions in one journal and posting them into various ledger accounts will be very difficult and involves a lot of clerical work. This is avoided by sub-dividing the journal into various subsidiary journals or books. The subdivisions of journal into various subsidiary journals for recording transactions of similar nature are called as "Subsidiary Books". The different types of subsidiary books are:
1. Purchase Day Book
2. Sales Day Book
3. Purchases Returns Book
4. Sales Returns Book
5. Bills Receivable Book
6. Bills Payable Bok
7. Cash Book
8. Journal Proper
Question 7
1 / -0

An analysis of the effects of a transaction on the accounts, usually accompanied by explanation is known as ________.

A
Recording

B
Journalising

C
Journal entry

D
Posting

Solution

Analyzing transactions and recording them as journal entries is the first step in the accounting cycle. It begins at the start of an accounting period and continues during the whole period. In other words journal entry is an entry to the journal. Journal is a record that keeps accounting transactions in chronological order, i.e. as they occur.
Question 8
1 / -0

Accrued/prepaid/received in advance/outstanding a/c are known as __________.

A
Nominal a/c

B
Real a/c

C
Representative personal a/c

D
Tangible 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. For e.g. Kamal's account, Mala's account. Both males and females are included in it.
2. Artificial or legal persons: An account recording financial transaction with an artificial person created by law or otherwise is termed as artificial persons' personal account. For e.g. Firms' account, limited companies' accounts.
3. Representative personal account: An account indirectly representing a person or persons is known as representative personal accounts. 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. For e.g. prepaid insurance, outstanding salaries.
Hence, accrued/prepaid/received in advance/outstanding accounts becomes representative personal account.
Question 9
1 / -0

A cash disbursement may result in ___________.

A
Reduction in liability

B
Increase in other asset

C
Reduction in one asset and increase in other asset

D
All of the above

Solution

Cash disbursement, also called cash payments, in accounting refer to payments made by a company during a specific period, such as quarter or year. It includes payments made by cash , but also cash equivalents like cheque or electronic fund transfer.
Question 10
1 / -0

When a debtor is realized which account is credited _________.

A
cash a/c

B
miscellaneous income a/c

C
debtor a/c

D
profit and loss a/c

Solution

Debtors are the customers that buy your products on credit. Debtor are presenting in the current asset section of the balance sheet. Hence, when debtor is realized debtor account is credited.

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Recording of Transactions - I Test 45

Result

Recording of Transactions - I Test 45

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SHARING IS CARING

Question 1

Real

Personal

Nominal

All of the above

Solution

Question 2

Debit side

Credit side

Income side

Expenses side

Solution

Question 3

Wages

Asset

Cash

Suspense

Solution

Question 4

Real

Personal

Nominal

All of the above

Solution

Question 5

Real account

Personal account

Nominal account

None of the above

Solution

Question 6

Subsidiary

Purchase return

Purchase

Journal proper

Solution

Question 7

Recording

Journalising

Journal entry

Posting

Solution

Question 8

Nominal a/c

Real a/c

Representative personal a/c

Tangible a/c

Solution

Question 9

Reduction in liability

Increase in other asset

Reduction in one asset and increase in other asset

All of the above

Solution

Question 10

cash a/c

miscellaneous income a/c

debtor a/c

profit and loss a/c

Solution

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