Recording of Transactions

Result

Recording of Transactions - II Test 5

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Weekly Quiz Competition

Question 1
1 / -0

A purchase book records _____________________.

A
All type of purchase

B
Only credit purchase of merchandise

C
Only purchase returns

D
Both cash and credit purchases of merchandise

Solution

Purchase book records credit purchases of goods only. Whenever, goods are purchased, purchase account is debited. In all cases of purchases, goods come into business, so purchases account has to be debited. Monthly total of purchases book is posted to the debit of purchases account in the ledger.
Question 2
1 / -0

Source documents for recording entries in the purchase book.

A
Invoices received by the firm from seller

B
Invoice received by the purchaser

C
Invoices received by seller from firm

D
All of the above

Solution

Purchase books are the subsidiary books prepared for recording all the credit purchases of goods that are meant for resale and the cash transactions are avoided since cash transactions are recorded in the cash book.

The vouching document that is used to record the credit purchases is the invoices that the firm receives from the seller or suppliers with the net amount. This book is maintained on the basis of invoice only and Accountant records quantity of products, rate and amount from invoice.

Each transaction is recorded by giving invoice no.
Question 3
1 / -0

The words ___________ are written against the amount of the difference between the two sides.

A
Balance amount

B
Balance b/d

C
Balance c/d

D
Balance cash

Solution

Balancing of an account means that two sides are totalled and the difference between them is shown on that side which is shorter in order to make their totals equal. The words 'balance c/d' are written against the amount of the difference between the two sides.
Question 4
1 / -0

Posting from the sales journal is done _________ to their respective accounts.

A
Daily

B
Weekly

C
Monthly

D
Yearly

Solution

Sales journals are special journals that saves time in recording and posting business transactions.
Each transaction in the sales journal is a sale of goods on credit.
Therefore, each transaction is separately posted daily to the accounts receivable to keep debtor's accounts current up to date.
Question 5
1 / -0

Posting from the purchases journal is done______ to their respective accounts.

A
Weekly

B
Yearly

C
Monthly

D
Daily

Solution

Purchase journals are special journals that saves time in recording and posting business transactions.
Each transaction in the purchases journal is a purchase of goods on credit.
Therefore, each transaction is separately posted daily to the accounts payable to keep creditor accounts up to date.
Question 6
1 / -0

Which of the following is not treated as an internal evidence of audit for returns of goods?

A
Copies of Sales Challan.

B
Goods received Note.

C
Copies of Cash Memo.

D
Debit Notes.

Solution

A debit note is a commercial document issued by a buyer to seller as a means of requesting to issue a credit note. Debit note act as a source document for purchase returns. All others mentioned like sales challan, goods received note and cash memos, all are internal documents.
Where the internal evidence is not readily available, auditor should have these debit note as evidence of audit.
Question 7
1 / -0

Petty cash system is designed to _____________.

A
Meet the needs of small business

B
Cover small and miscellaneous income

C
Cover small expenditure to be paid in cash

D
Cover both small incomes and expenditures

Solution

In big business organisations, a large number of repetitive small payments such as, conveyance , cartage, postage, telegrams, courier and other expenses are made. These organisations appoint an assistant to the Head Cashier. The appointed cashier is known as petty cashier. He makes payments of these expenses and maintains a separate cash book to record these transactions. Such a cash book is called Petty Cash Book. The petty cashier works on the imprest system. Petty cash system is designed to cover small expenditures to be paid in cash.
Question 8
1 / -0

The 'imprest system' is used in relation to _______________.

A
Purchase book

B
Sales book

C
Cash book

D
Petty cash book

Solution

Under imprest system of petty cash book, a round sum of money is estimated as necessary for the possible needs of the business to meet the petty expenses for the week or fortnight is handed over to the Petty Cashier. At the end of the fixed period or earlier, when petty cashier needs further cash, he submits the petty cash book, along with vouchers.
The chief cashier examines the cash book with the vouchers. Then, chief cashier gives money/check for the exact amount, which he actually spent during the period. Thus, he starts for the next period with the same sum as held previously. That is, the Petty Cashier will have again the fixed sum in the beginning of the next period. This system is known as Imprest System of Petty Cash Book.
Hence, the imprest system is used in relation to petty cash book.
Question 9
1 / -0

Which of the following have contra entries?

A
Simple cash book.

B
Double column cash book.

C
Three column cash book.

D
Both (B) & (C).

Solution

A Contra entry is an entry that affects both the sides of the same account. Usually, transactions affecting the cash and bank at the same time are recorded as a contra entry. It is represented by 'C' in the ledger folio column of the Cash Book. double column and triple column cash books have Cash and Bank A/c both. Thus, both will have contra entries.
Thus, the correct option is D.
Question 10
1 / -0

Cash sales are recorded in __________.

A
Sales Book

B
Cash book

C
Journal

D
None of the above

Solution

All the cash transactions are recorded in cash book.
Sales against cash will increase the cash and decrease the goods.

Accounting entry will be passed as under:

Cash A/c Dr,
To Sales/Goods A/c

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Re-Attempt Weekly Quiz Competition

Recording of Transactions - II Test 5

Result

Recording of Transactions - II Test 5

Score

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Rank

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SHARING IS CARING

Question 1

All type of purchase

Only credit purchase of merchandise

Only purchase returns

Both cash and credit purchases of merchandise

Solution

Question 2

Invoices received by the firm from seller

Invoice received by the purchaser

Invoices received by seller from firm

All of the above

Solution

Question 3

Balance amount

Balance b/d

Balance c/d

Balance cash

Solution

Question 4

Daily

Weekly

Monthly

Yearly

Solution

Question 5

Weekly

Yearly

Monthly

Daily

Solution

Question 6

Copies of Sales Challan.

Goods received Note.

Copies of Cash Memo.

Debit Notes.

Solution

Question 7

Meet the needs of small business

Cover small and miscellaneous income

Cover small expenditure to be paid in cash

Cover both small incomes and expenditures

Solution

Question 8

Purchase book

Sales book

Cash book

Petty cash book

Solution

Question 9

Simple cash book.

Double column cash book.

Three column cash book.

Both (B) & (C).

Solution

Question 10

Sales Book

Cash book

Journal

None of the above

Solution

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