Recording of Transactions

Result

Recording of Transactions - I Test 9

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Weekly Quiz Competition

Question 1
1 / -0

Which of the following is a real account ?

A
Salaries account

B
Investment in shares

C
Debtors account

D
Bank account

Solution

A investment is an account on the asset side of a company's balance sheet that represents the company's investments, including stocks, bonds, real estate, and cash. Investments are assets that a company intends to hold for more than a year. Investment is an asset and it is a real account.
Question 2
1 / -0

Bought ledger adjustment account is also termed as _______________.

A
General ledger Account.

B
Creditors ledger adjustment Account.

C
Debtors ledger adjustment Account.

D
Sold ledger adjustment Account.

Solution

Creditors or Purchases or Bought Ledger: It contains personal accounts of trade creditors from whom goods are purchased on credit.
Question 3
1 / -0

Income tax paid is debited to ______________.

A
Trading account

B
Profit and Loss Account

C
Drawing Account

D
Cash Account

Solution

If any amount is withdrawn by the owner for personal use, that is considered as drawing and debited to drawing account. Drawing amount will be deducted from the capital account.

Income Tax paid is a personal expense of the owner, hence this has to be debited to drawings account.
Question 4
1 / -0

A voucher is a _____________.

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

B
Invoice received from suppliers

C
Receipt issued to a customer for cash received

D
All of these

Solution

Every business transaction must be supported by a written evidence. Before making an entry in the books of account, it need to be ensured the proper supporting as a documentary evidence. This documentary written evidence is referred as voucher.
Question 5
1 / -0

Vouching relates to ___________.

A
Cash receipts

B
Cash payments

C
Credit transaction

D
All of these

Solution

Every business transaction must be supported by a written evidence. Before making an entry in the books of account, it need to be ensured the proper supporting as a documentary evidence. This documentary written evidence is referred as voucher.
Vouching is a process of checking the accounting entries in the books of account with the relevant supporting document/voucher.
Cash receipts, cash payments, credit transactions are to be vouched carefully with the supporting documents.
Question 6
1 / -0

The 'Statement of Affairs' is prepared on the basis of _______________.

A
Ledger Accounts.

B
Ledger Accounts and estimates.

C
Estimates.

D
None of the above.
Question 7
1 / -0

Identified and measured economic events should be recorded in _________order.

A
Chronological order

B
Valuation order

C
Relevance order

D
All of the above

Solution

This is very much clear from the definition of accounting that all business transactions must be recorded in books of account in the chronological order.

As and when an economic event is identified and measured, it has to be recorded in the books.

So, if a sales is effected on 29th March, it has to be recorded on the same day and if purchase is effected on 31st March, it has to be recorded on 31st March itself.
Question 8
1 / -0

Debtors and Creditors Ledgers are known as __________________.

A
Bought ledger adjustment Account.

B
Subsidiary Ledgers.

C
General Ledgers.

D
Sold ledgers adjustment Account.

Solution

A subsidiary ledger stores the details for a general ledger control account. Once information has been recorded in a subsidiary ledger, it is periodically summarized and posted to a control account in the general ledger, which in turn is used to construct the financial statements of a company. Most accounts in the general ledger are not control accounts; instead, individual transactions are recorded directly into them. Subsidiary ledgers are used when there is a large amount of transaction information that would clutter up the general ledger. This situation typically arises in companies with significant sales volume. Thus, there is no need for a subsidiary ledger in a small company. Examples of subsidiary ledgers are:
1. Accounts payable ledger
2. Accounts receivable ledger
3. Fixed assets ledger
4. Inventory ledger
5. Purchases ledger
Therefore, B is the correct option.
Question 9
1 / -0

Balancing of account means ______________.

A
Cash credit

B
Total credit

C
Difference in credit and debit

D
Total debit

Solution

For all business transactions, a ledger account is opened in the ledger to have a summary of each account. Balancing has to be done after a particular period for each of the account to know the final position of account.

Hence, balancing is the difference between the debit and credit. If credit side exceeds the debit side, the balance is called as credit balance and vice versa.
Question 10
1 / -0

Life Insurance Premium A/c is _________.

A
Nominal

B
Personal

C
Real

D
None of the above

Solution

The nominal accounts are all hose accounts that are in the nature of incomes and expenses of a business. These accounts are closed at the financial year end with the income and expense summary to arrive at the net profit or loss account. Nominal accounts start at the year end with zero balance (or no balance) and ends with no balance to carry forward (as all is transferred to income summary).
Life insurance premium is classified as a personal account, since the insurance premium paid represents the amount paid for an individual.

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Re-Attempt Weekly Quiz Competition

Recording of Transactions - I Test 9

Result

Recording of Transactions - I Test 9

Score

-

Rank

-

SHARING IS CARING

Question 1

Salaries account

Investment in shares

Debtors account

Bank account

Solution

Question 2

General ledger Account.

Creditors ledger adjustment Account.

Debtors ledger adjustment Account.

Sold ledger adjustment Account.

Solution

Question 3

Trading account

Profit and Loss Account

Drawing Account

Cash Account

Solution

Question 4

Document in support of an entry made in the books of accounts

Invoice received from suppliers

Receipt issued to a customer for cash received

All of these

Solution

Question 5

Cash receipts

Cash payments

Credit transaction

All of these

Solution

Question 6

Ledger Accounts.

Ledger Accounts and estimates.

Estimates.

None of the above.

Question 7

Chronological order

Valuation order

Relevance order

All of the above

Solution

Question 8

Bought ledger adjustment Account.

Subsidiary Ledgers.

General Ledgers.

Sold ledgers adjustment Account.

Solution

Question 9

Cash credit

Total credit

Difference in credit and debit

Total debit

Solution

Question 10

Nominal

Personal

Real

None of the above

Solution

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