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Recording of Transactions - II Test 9

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Recording of Transactions - II Test 9
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  • Question 1
    1 / -0
    Debtors Account shows _________ balance.
    Solution
    Debtor represents the amount of the business that is owed by them. 
    Debtor are the assets of a firm and all the assets represents debit balance. Thus, the Debtor A/c also shows debit balance.
  • Question 2
    1 / -0
    When the total of debit side of an A/c exceeds credit side, it is called ______ balance.
    Solution
    Accounts in the ledger are periodically balances, generally at the end of the accounting period, with the object of ascertaining the net position of each amount. 
    Balancing of an account means that the two sides are summed up and the difference between them is shown on the side, which is shorter in order to make their totals equal. 
    In case, the debit side exceeds the credit side of an account, the difference is written on the credit side and is called as debit balance. 
    If the credit side exceeds the debit side, the difference between the two appears on the debit side and is called as credit balance.
  • Question 3
    1 / -0
    Excess of credit side total of an account over its debit total ______________.
    Solution
    When credit side of the ledger account exceeds the debit side, then the balancing figure is termed as Credit balance. All liabilities, income and gains and capital show Credit balance.
  • Question 4
    1 / -0
    Purchases accounts always shows __________ balance.
    Solution
    Purchase account is a part of trading A/c and shows the amount of goods purchased for a business by a trader for resale. 

    Hence, Purchases account always show debit balance. when the debit side of the ledger account exceeds the credit side, the balancing figure is termed as Debit balance. 
    All the assets expenses and losses show Debit balance.
  • Question 5
    1 / -0
    Carried down (c/d) balance indicates ________ balance.
    Solution
    Opening journal entry is passed to bring the previous year's closing balances of assets and liabilities to the current year. Ledger accounts are categorized as assets, liabilities, capital, revenue and expenses. 
    The first three of them, i.e., assets, liabilities and capital accounts have certain closing balance at the end of accounting period, so their values are to be carried forward to the next accounting period. 

    This is why they are closed as 'By Balance c/d' or 'To Balance c/d. 'Balance c/d shows the closing balance of the account. Carried down (c/d) can be written on both at the debit and credit side, while closing personal and real accounts, c/d here means carried down to the next period.
  • Question 6
    1 / -0
    Cash Account always shows _______ balance.
    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. Generally, it is made on monthly basis. 

    This is a very popular book and is maintained by all the organisation, big or small, profit or not-for-profit. 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. 
    Hence,Cash account will always show a debit balance because cash payments can never exceed cash receipts and cash in hand at the beginning of the period.
  • Question 7
    1 / -0
    Machinery Account shows _______ balance.
    Solution
    Machinery A/c shows debit balance. 
    It is a real account because these accounts include all the assets of the business whose value can be measured in terms of money. 
    Thus, all the assets of the business are recorded following the rule of real accounts, i.e. "Debit what comes in" and "Credit what goes out". 

  • Question 8
    1 / -0
    Sales account always shows _________ balance.
    Solution
    Sales account reflects the amount of revenue earned by the sale of goods/services of a business. Thus, it is an income for the business and according to the rule of accounting, all incomes are to be credited and all expenses are to be debited. Thus, a sale account always show credit balance.
  • Question 9
    1 / -0
    Total of sales book is ________ to sales accounts.
    Solution
    All credit sales of merchandise are recorded in the sales book and cash sales are recorded in the cash book. 
    The date of sale, invoice number, name of the customer and the amount of the invoice are recorded in the sales book. Other details about the sales transaction including terms of payment are available in the invoice.

    The book keeper makes entries in the sales book from one copy of the sales invoice. Finally total of sales book is posted to sales accounts. 

  • Question 10
    1 / -0
    Excess of debit side total of an account over its credit side total is called _____.
    Solution
    Accounts in the ledger are periodically balanced, generally at the end of the accounting period, with object of ascertaining the net position of each amount. Balancing of an account means that the two sides are totaled and the difference between them is shown on the 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. The amount of balance is brought (b/d) down in the next accounting period indicating that it is a continuing account, till finally settled or closed. 
    In case, the debit side exceeds the credit side, the difference is written on the credit side and is called as debit balance. 
    If the credit side exceeds the debit side, the difference between the two appears on the debit side and is called credit balance.
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