Journal Test 3

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Journal Test 3

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Weekly Quiz Competition

Question 1
1 / -0

Goods distributed as free sample would be __________________.

A
Debited to Advertisement A/c and credited to Purchase A/c.

B
Debited to Trading A/c and Credited to Profit and loss A/c

C
Credited to sale A/c and Debited to purchase A/c

D
Credited to Trading A/c and Debited to Drawing A/c

Solution

Goods distributed as free samples are products given away by a business usually for promotional reasons.
The goods distributed as free samples do not have a sales value and therefore cannot be recorded in the accounting records as sales.
The free product samples do however have a cost which needs to be removed from the cost of sales account and recorded as an expense. The expense account used will depend on the reason the goods were distributed as free samples and might include for example sales and marketing, promotion, advertising, charity or simply a free samples expense account.
Journal Entry :-
Advertisement A/c Dr.
To Purchase A/c
Question 2
1 / -0

Opening entry is passed in

A
General Journal

B
Special purpose journal

C
None of these

D
Both (a) & (b)
Question 3
1 / -0

Closing entries are passed in __________.

A
General journal

B
Directly in balance sheet

C
Directly in profit and loss A/c

D
Any of the above three

Solution

All adjustment entries are passed through general journal.
Therefore, at the end of the financial period all closing entries are passed in general journal.
Question 4
1 / -0

Rs. 5000 paid to Ram as salary for the month of July 06, while recording this transaction in books of A/c which account will be debited ......

A
Ram's A/c

B
Salary outstanding A/c

C
Salary A/c

D
Profit and loss A/c

Solution

The journal entry for "Rs. 5000 paid to Ram as salary for the month of July 06" will be
Salary a/c Dr.
To cash a/c
(Being salary paid to Ram)
Therefore, recording this transaction in books of A/c Salary account will be debited
Question 5
1 / -0

Business expenses excludes...

A
Fire insurance premium of office building

B
LIC premium on the life of proprietor

C
Interest on capital

D
Repair of office furniture
Question 6
1 / -0

Which of these is the first entry in the journal.

A
transfer of balance of assets and liabilities A/cs of the previous years

B
rectification entry

C
adjustment entry

D
cash deposited in bank
Question 7
1 / -0

Which of these is/are not a business expenditure?

A
Income-tax of the proprietor

B
House tax premium of a partner

C
LIC premium of the Chairman

D
all the three
Question 8
1 / -0

Which of these describes a record of the transaction?

A
Journal

B
Ledger

C
Trial balance

D
Work sheet

Solution

Journal keeps the record of the transaction. Journal is known as the Book of Primary Entry. In Journal, all the transactions are recorded in chronological order. Journal is also known as the Day Book. The Format of the Journal has 5 Columns namely Date Particulars, LF, Debit Amount and Credit Amount.
Question 9
1 / -0

Goods returned by $$X$$ is entered as ________________.

A
Debit X A/c; Credit purchase return A/c

B
Debit X a/c; Credit cash A/c

C
Debit sales return A/c; Credit X A/c

D
Debit X a/c; Credit sales A/c

Solution

Revenue is reversed by debiting the sales returns and allowances account (which is a contra account to sales) by the amount of original sale and crediting accounts receivable account or cash account (depending on whether it was a credit sale or a cash sale).
Journal Entry :-
Sales Return A/c Dr.
To X's A/c
Question 10
1 / -0

When goods are purchased for the joint venture, the account to be debited is __________________.

A
Purchases account

B
Joint venture account

C
Venture's capital account

D
Joint ventures stock A/c

Solution

A joint venture is an arrangement in which two or more parties agree to pool their resources for the purpose of a specific task or transaction.

A joint venture account is prepared for measurement of venture profit. This account is debited with all venture expenses and credited with all sales or collections. The excess balance of credit side over the debit side shows the profit on joint venture and vice versa. Profit /Loss are transferred to co-venturers’ accounts in the profit-sharing ratio.

Goods bought on joint venture as well as expenses incurred in connection with the business are debited to the joint venture account and credited to the seller's account or the joint bank account.

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Re-Attempt Weekly Quiz Competition

Journal Test 3

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Journal Test 3

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Question 1

Debited to Advertisement A/c and credited to Purchase A/c.

Debited to Trading A/c and Credited to Profit and loss A/c

Credited to sale A/c and Debited to purchase A/c

Credited to Trading A/c and Debited to Drawing A/c

Solution

Question 2

General Journal

Special purpose journal

None of these

Both (a) & (b)

Question 3

General journal

Directly in balance sheet

Directly in profit and loss A/c

Any of the above three

Solution

Question 4

Ram's A/c

Salary outstanding A/c

Salary A/c

Profit and loss A/c

Solution

Question 5

Fire insurance premium of office building

LIC premium on the life of proprietor

Interest on capital

Repair of office furniture

Question 6

transfer of balance of assets and liabilities A/cs of the previous years

rectification entry

adjustment entry

cash deposited in bank

Question 7

Income-tax of the proprietor

House tax premium of a partner

LIC premium of the Chairman

all the three

Question 8

Journal

Ledger

Trial balance

Work sheet

Solution

Question 9

Debit X A/c; Credit purchase return A/c

Debit X a/c; Credit cash A/c

Debit sales return A/c; Credit X A/c

Debit X a/c; Credit sales A/c

Solution

Question 10

Purchases account

Joint venture account

Venture's capital account

Joint ventures stock A/c

Solution

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