Recording of Transactions

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Recording of Transactions - II Test 7

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Weekly Quiz Competition

Question 1
1 / -0

Purchase account comprises of transactions of ___________.

A
Purchase of furniture

B
Cash and credit purchase

C
Purchase return

D
Purchase or stationery

Solution

When goods are purchased either for cash or on credit, purchase account is debited. Purchase account belongs to nominal account and according to the rule of nominal account, expenses of the business is debited. All credit purchase of goods are recorded in the purchase journal while cash purchase are recorded in cash book. Other purchases such as purchases of office equipment, furniture, building etc. are recorded in the journal proper if purchased on credit or in the cash book if purchased for cash.
Question 2
1 / -0

In double column cash book, one is for cash and other is the ___________ column.

A
Credit

B
Bank

C
Discount

D
All of the above

Solution

Cash book with cash and bank column has one additional column on the receipt and payment side along with cash column which is the bank column. Only bank transaction are recorded in this column.
Question 3
1 / -0

Cash book is a _______( journal).

A
Subsidiary

B
Purchase

C
Sales

D
Purchase and Sales Return

Solution

A cash book is a subsidiary to the general ledger in which all cash transactions during a period are recorded.
Question 4
1 / -0

Amount of discount deducted from invoice price is called a __________.

A
cash discount

B
trade discount

C
quality discount

D
all of the above

Solution

Discount is the deduction in the price of the goods sold. It is offered in two ways. Offering deduction of agreed percentage of list price at the time of selling goods is one way of giving discount. Such discount is called as "Trade Discount".
Question 5
1 / -0

Cash column of cash book can never have _______ balance.

A
Credit

B
Debit

C
Zero

D
None of the above

Solution

Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period.
On the left side, all-cash transactions relating to cash receipts (debits), and on the right side all transactions relating to cash payments (credits) are entered date wise. When a cash book is maintained, a separate cash book in the ledger is not opened.
The cash book is balanced in the same way as an account in the ledger. But it may be noted that in the case of the cash book, there will be always a debit balance because cash payments can never exceed cash receipts and cash in hand at the beginning of the period.
Question 6
1 / -0

Person who maintains petty cash book __________.

A
Cashier

B
Petty maintainer

C
Petty cashier

D
None of the above

Solution

The petty cash book is a formal summarization of petty cash expenditures, sorted by date. In most cases, the petty cash book is an actual ledger book, rather than a computer record. Thus, the book is part of a manual record-keeping system.
A petty cashier is a person who is appointed or who is authorized to make payments of petty cash expenses and record them in the petty cash book. Petty cash expenses include small payments, such as postage, conveyance, etc. that are very small in amount but occur very frequently in business.
Question 7
1 / -0

Subsidiary book in which only credit purchase of goods is recorded ___________.

A
Purchase book

B
Purchase return book

C
Sales book

D
Sales return book

Solution

All goods purchased on credit is are recorded in the Purchase book. Whenever goods are purchased on credit purchase account is debited (as per the rule, "Debit what comes in") i.e. goods comes in, hence purchase account is debited. The document on the basis of which purchase book is prepared is known as "Credit memo".
Question 8
1 / -0

Subsidiary book in which only credit sale of goods is recorded ____________.

A
sales book

B
purchase book

C
sales return book

D
purchase return book

Solution

Sales book records only credit sale of goods. It does not record cash sales of goods or credit sale of assets. Sales account is always credited for sale, so the sales book always show credit balance. The sales journal is also totalled periodically and this total is credited to sales account in the ledger.
Question 9
1 / -0

Credit purchase of machinery is recorded in the ___________.

A
Purchase book

B
Cash book

C
Journal proper

D
Return outward book

Solution

A book maintained to record transactions, which do not find place in special journals, is known as Journal Proper or Journal Residual.
Following transactions are recorded in this journal:

1. Opening entry: In order to open a new set of books in the beginning of new accounting year and record therein opening balances of assets, liabilities and capital, the opening entry is made in the journal.

2. Adjustment Entries: In order to update ledger account on accrual basis, such entries are made at the end of the accounting period, such as Rent outstanding, Prepaid insurance, Depreciation and Commission received in advance.

3. Other entries: The following transactions is done in the journal proper:
(i) At the time of dishonor of a cheque the entry for cancellation for discount received or discount allowed
(ii) Purchase/sale of items on credit other than goods
(iii) Goods withdrawn by the owner for personal use
(iv) Goods distributed as samples for sales promotion
(v) Endorsement and dishonour of bills of exchange
(vi) Loss of goods by fire/theft/spoilage
Question 10
1 / -0

An entry recorded on both sides of cash Book is known as _______ entry.

A
Opening

B
Rectifying

C
Transfer

D
Contra

Solution

An entry which is made on both sides of a cash book is called Contra entry.
In the dual entry accounting system, a Contra Entry is an entry which is recorded to reverse or offset an entry on the other side of an account. .

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Re-Attempt Weekly Quiz Competition

Recording of Transactions - II Test 7

Result

Recording of Transactions - II Test 7

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SHARING IS CARING

Question 1

Purchase of furniture

Cash and credit purchase

Purchase return

Purchase or stationery

Solution

Question 2

Credit

Bank

Discount

All of the above

Solution

Question 3

Subsidiary

Purchase

Sales

Purchase and Sales Return

Solution

Question 4

cash discount

trade discount

quality discount

all of the above

Solution

Question 5

Credit

Debit

Zero

None of the above

Solution

Question 6

Cashier

Petty maintainer

Petty cashier

None of the above

Solution

Question 7

Purchase book

Purchase return book

Sales book

Sales return book

Solution

Question 8

sales book

purchase book

sales return book

purchase return book

Solution

Question 9

Purchase book

Cash book

Journal proper

Return outward book

Solution

Question 10

Opening

Rectifying

Transfer

Contra

Solution

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