Recording of Transactions

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Recording of Transactions - I Test 8

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Weekly Quiz Competition

Question 1
1 / -0

Which of the following is an accounting equation?

A
Capital = Assets + Liabilities

B
Capital = Assets - Liabilities

C
Assets = Liabilities - Capital

D
Liabilities = Assets + Capital

Solution

Accounting Equation :

Capital+Liabilities=Total Assets
Therefore,
Capital= Total Assets- Liabilites.
Question 2
1 / -0

Which of the followings shows the chronological record of transactions ?

A
Journal

B
Ledger

C
Trial balance

D
None of these

Solution

After analyzing and preparing business documents, the transactions are then recorded in the books of the company. A journal entry is the recording of a business transaction in the journal. A journal entry shows all the effects of a business transaction as expressed in debit(s) and credit(s) and may include an explanation of the transaction. A transaction is entered in a journal and before it is entered in ledger accounts. In double-entry accounting transactions are recorded in the journal through journal entries. A journal, also known as Books of Original Entry, keeps records of business transactions in a systematic order. Transactions are recorded in the journal in chronological order, i.e. as they occur; one after the other.
Question 3
1 / -0

All accounting entries must satisfy the accounting equation specified by ___________.

A
Accrual Concept

B
Matching Concept

C
Realisation Concept

D
Dual aspect concept

Solution

All accounting entries must be based on dual aspect concept. As per dual concept, every transaction affects two accounts. One account must be debit and the other account must be credit.
Dual aspect concept has been made on the basis of accounting equation. In accounting equation, there are two sides. One side is total assets and other side is total liabilities. Assets are always equal to liabilities.
The accounting equation is as follows:
Capital + Liabilities = Assets
Question 4
1 / -0

Salaries paid to Ramesh will be debited to ________________.

A
Salaries Account

B
Ramesh's Account

C
Cash Account

D
Capital Account

Solution

The Journal Entry for Salaries paid to Ramesh will be
Salaries a/c Dr.
To Cash a/c
(Being Salaries paid to Ramesh)
Whenever expenses are paid then the name of a person is not mentioned.
Salaries are debited as per Nominal Rule - Debit all expenses and Losses
Cash is credited as per Real Rule - Credit what goes out.
Question 5
1 / -0

From the following which is according to Dual aspects.

A
Capital = Liabilities + Assets

B
Assets = Liabilities + Capital

C
Assets = Liabilities - Capital

D
Liabilities = Assets + Capital

Solution

As per dual concept, every transaction has two effects. One effect must be debit and the other must be credit. Dual aspect concept has been made on the basis of accounting equation. In accounting equation, there are two sides. One side represents total assets and other side represents total liabilities. The total liabilities include capital and external liabilities. Assets always equal to liabilities.

The accounting equation is as follows:
Capital + Liabilities = Assets.
Question 6
1 / -0

Vivek 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 form of an 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
$$Rs. 22,000 = Rs. 22,000 + Rs. 0$$

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

Solution

Accounting Equation may be defined as:

Share Capital+Liabilities=Fixed Assets+Current Assets

Here , Vivek has contributed $$Rs.20000$$ as Capital, this will result an increase in cash by $$Rs.20000$$. Goods purchased on credit for $$Rs.2000$$ result in an increase in stock by $$Rs. 2000$$ and increase in current liabilities.

Therefore equation will be:
Capital+ Current Liabilities = Cash+Goods
$$Rs.20000$$+$$Rs.2000$$ = $$Rs.20000$$+$$Rs.2000$$.
Question 7
1 / -0

The fundamental accounting equation Assets = Capital + Liabilities is the formal expression of __________.

A
Dual aspect concept

B
Matching concept

C
Going concern concept

D
Money measurement concept

Solution

Dual aspect is the foundation or basic principle of accounting. This concept states that every transaction has a dual or two-fold effect and should therefore be recorded at two places.
The duality principle is commonly expressed in terms of fundamental Accounting Equation, which is as follows :
Assets = Liabilities + Capital
In other words, the equation states that the assets of a business are always equal to the claims of owners and the outsiders. The claims also called equity of owners is termed as Capital(owners’ equity) and that of outsiders, as Liabilities(creditors equity).
Question 8
1 / -0

Which of the following accounts have only credit balance?

A
Reserve Fund account

B
Capital account

C
Accounts payable account

D
All of these

Solution

All the three have credit balance as All the incomes, gains , capital and liabilities are credited.
Question 9
1 / -0

Which of the following is not opened in the General Ledger ?

A
Drawing Account

B
Land Account

C
Rent Account

D
Personal Account of a trade creditor
Question 10
1 / -0

Where process scrap is re-cycled for use in conjunction with new material as well as being sold externally, which of the following is most likely, to be the value at which it is debited to the process?

A
At the same price as it is sold externally

B
At the cost of normal losses

C
At the cost attached to abnormal losses

D
Nil value

Solution

During the process, a certain percentage of material gets wasted. This is called as normal loss. These units can be sold as scrap in the open market or re cycled with new material. In such situation market price of such scrap should be debited to process account.

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Recording of Transactions - I Test 8

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Recording of Transactions - I Test 8

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SHARING IS CARING

Question 1

Capital = Assets + Liabilities

Capital = Assets - Liabilities

Assets = Liabilities - Capital

Liabilities = Assets + Capital

Solution

Question 2

Journal

Ledger

Trial balance

None of these

Solution

Question 3

Accrual Concept

Matching Concept

Realisation Concept

Dual aspect concept

Solution

Question 4

Salaries Account

Ramesh's Account

Cash Account

Capital Account

Solution

Question 5

Capital = Liabilities + Assets

Assets = Liabilities + Capital

Assets = Liabilities - Capital

Liabilities = Assets + Capital

Solution

Question 6

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

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

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

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

Solution

Question 7

Dual aspect concept

Matching concept

Going concern concept

Money measurement concept

Solution

Question 8

Reserve Fund account

Capital account

Accounts payable account

All of these

Solution

Question 9

Drawing Account

Land Account

Rent Account

Personal Account of a trade creditor

Question 10

At the same price as it is sold externally

At the cost of normal losses

At the cost attached to abnormal losses

Nil value

Solution

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