Recording of Transactions

Result

Recording of Transactions - I Test 7

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Weekly Quiz Competition

Question 1
1 / -0

When Accounts in the ledger are balanced ?

A
Daily

B
Weekly

C
Monthly

D
Yearly

Solution

The ledger account are periodically balanced at the end of the accounting period, with the object of ascertaining the net position of each amount. Balancing of an account means that two sides are totalled and the difference between them is shown on the side, which is shorter in order to make their totals equal.
Question 2
1 / -0

Voucher relates to ___________

A
Cash receipt and payments, credit transactions

B
Cash payment only

C
Credit transactions only

D
Cash receipt only

Solution

Vouchers refer to those documents evidencing business transactions.
On the basis of source documents, a voucher detailing the accounts that are debited and credited is prepared.
There are two types of Accounting Vouchers
1. Cash Vouchers
2. Non-Cash Vouchers.
Therefore, Voucher relates to Cash receipt and payments, credit transactions
Question 3
1 / -0

Accounting transactions of an organisation are documented using a _________.

A
Bill

B
Invoice

C
Voucher

D
None of these

Solution

The first step to capture accounting data from transaction(s) so as to prepare a document, is called voucher that expresses and document an accounting transaction.
Question 4
1 / -0

Dual Aspect concept results in an accounting equation which is __________.

A
Revenue = Expenses

B
Capital + Profits = Assets + Expenses

C
Capital + Liabilities = Assets

D
Capital + Drawings = Owner's Equity

Solution

As per dual concept, every transaction has two effects. One effect must be debit and the other must be credit. Dual aspect concept is the basis of an accounting equation. In an accounting equation, there are two sides. One side is total assets and other side is total liabilities. Liabilities include capital and other external liabilities. Assets are always equal to liabilities.
The accounting equation is as follows:
Capital + Liabilities = Assets.
Question 5
1 / -0

While recording transactions in the books of company's purchasing and selling, which of the following must be noted _________________.

A
Assets and business

B
Liabilities and Trade liabilities

C
Accumulated profits

D
All the above

Solution

The full disclosure principle is a concept that requires a business to report all necessary information about their financial statements and other relevant information to any persons who are accustomed to reading this information.
Transactions include purchases, sales, receipts, and payments by an individual person or an organization/corporation must be properly recorded.
Hence, Option D is correct.
Question 6
1 / -0

X started business with a capital of Rs. 20,000 and purchased goods worth Rs. 2,000 on credit. These transactions may be expressed in the from of 'Accounting equation' such as_________________.

A
Rs. 22,000= Rs. 20,000+Rs. 2,000

B
Rs. 20,000= Rs. 22,000-Rs. 2,000

C
Rs. 22,000=Rs. 22,000+0

D
Rs.22,000=0+Rs. 22,000

Solution

Accounting equation:

Capital +Liabilities=Fixed Assets+Current Assets
Capital contribution of Rs.20000 increase capital and cash
Purchase of goods of Rs.2000 on credit increases goods by Rs.2000 and current liabilities by Rs.2000
Hence
Capital (Rs.20000)+Creditors (Rs.2000)=Cash (Rs.20000)+Goods (Rs.2000).

Question 7

1 / -0

Match List-I with List-II and select the correct answer using the codes given the lists:

List-I(Types of accounts)	List-II(Principles)
I. Real Accounts	(a) Debit the receiver credit the giver
II. Nominal Accounts	(b) Debit what comes in credit what goes out
III. Personal Accounts	(c) Debit all expenses,losses credit all incomes,gains

I-(c), II-(b), III-(a)

I-(a), II-(c), III-(b)

I-(b), II-(c), III-(a)

I-(a), II-(b), III-(c)

Solution

There are mainly three types of accounts: Real, Personal and Nominal accounts. Personal accounts are classified into three subcategories: Artificial, Natural and Representative.

Real Accounts: 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 of real accounts is: Debit what comes in; Credit what goes out.

Personal accounts: These accounts are related to individuals, firms, companies, etc. A few example of personal accounts include debtors, creditors, banks, outstanding/prepaid accounts, accounts of credit customers, accounts of goods suppliers, capital, drawings, etc. The golden rule of personal accounts is: Debit the receiver; Credit the giver.

Nominal accounts: Accounts which are related to expenses, losses, incomes or gains are called Nominal accounts. The dictionary meaning of the word "nominal" is "existing in name only" and the meaning remains absolutely true in accounting sense too, because nominal accounts so not really exist in physical form, but behind every nominal account money is involved. E.g. Purchase A/C, Salary A/c, Sales A/C, etc. The golden rule for nominal accounts is:Debit all expenses and losses; Credit all incomes and gains.

Question 8
1 / -0

A Voucher is ________.

A
Document for support of an entry made in books of accounts

B
Invoice received from suppliers

C
Receipt issued to a customer for cash

D
Dispatch Receipt

Solution

A Voucher is document for support of transaction which is to be recorded in books of accounts. Vouchers are prepared with the help of source documents.
There are mainly two types of Voucher
1. Cash Vouchers
2. Non Cash Voucher.
Question 9
1 / -0

Investment by owner results in ___________________.

A
Increase in capital and decrease in libility

B
Increase in capital and increase in liability

C
Increase in capital and decrease in asset

D
Increase in capital and increase in asset

Solution

Owner investment, also called owner's investment or contributed capital, is the amount of assets that the owner puts into the company.

In other words, this is the amount of money or other assets that the owner contributes to the business either to start it or to keep it running.
Question 10
1 / -0

Which of the following accounts is increased by credit entries?

A
Sales return account

B
Bank overdraft account

C
Goodwill account

D
Purchase account

Solution

If the company has no other offsetting balances at the bank, and it truly is an overdrawn situation, then it is shown as a current liability, labeled “Bank overdraft.”
Hence, Credit entry will increase overdraft balance.

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Re-Attempt Weekly Quiz Competition

Recording of Transactions - I Test 7

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Recording of Transactions - I Test 7

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SHARING IS CARING

Question 1

Daily

Weekly

Monthly

Yearly

Solution

Question 2

Cash receipt and payments, credit transactions

Cash payment only

Credit transactions only

Cash receipt only

Solution

Question 3

Bill

Invoice

Voucher

None of these

Solution

Question 4

Revenue = Expenses

Capital + Profits = Assets + Expenses

Capital + Liabilities = Assets

Capital + Drawings = Owner's Equity

Solution

Question 5

Assets and business

Liabilities and Trade liabilities

Accumulated profits

All the above

Solution

Question 6

Rs. 22,000= Rs. 20,000+Rs. 2,000

Rs. 20,000= Rs. 22,000-Rs. 2,000

Rs. 22,000=Rs. 22,000+0

Rs.22,000=0+Rs. 22,000

Solution

Question 7

I-(c), II-(b), III-(a)

I-(a), II-(c), III-(b)

I-(b), II-(c), III-(a)

I-(a), II-(b), III-(c)

Solution

Question 8

Document for support of an entry made in books of accounts

Invoice received from suppliers

Receipt issued to a customer for cash

Dispatch Receipt

Solution

Question 9

Increase in capital and decrease in libility

Increase in capital and increase in liability

Increase in capital and decrease in asset

Increase in capital and increase in asset

Solution

Question 10

Sales return account

Bank overdraft account

Goodwill account

Purchase account

Solution

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