Nature of Accounts and Rules of Debit and Credit Test 13

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Nature of Accounts and Rules of Debit and Credit Test 13

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Question 1
1 / -0

Which of the following statements is true?

A
Building account in a nominal account

B
Outstanding rent account is a non-personal account

C
Every debit has a corresponding credit

D
Incomes are debited
Solution
Option C is a true statement, because:-
According to double entry system, Every debit has a corresponding credit.
Building a/c is a real account. Building is an asset & comes under real account.
Outstanding rent is a personal account as it related to a specific person.
All Incomes & Gains are credited - as per golden rules of Nominal Account.
Question 2
1 / -0

Wages paid to Mohan for erecting a machine should be credited to __________.

A
wages A/c

B
machine A/c

C
Mohans A/c

D
cash A/c

Solution

'Wages paid' for the 'installation of machinery' should be debited to machinery account. Explanation: It is the amount incurred for buying and installing the machine. The 'machinery account' is debited since the machine has to be put to use.
Question 3
1 / -0

Prepaid salary account is a ___________.

A
Personal A/c

B
Real A/c

C
Nominal A/c

D
None of the above

Solution

Prepaid (Unexpired) expense is a personal account and is shown on the Assets side of a balance sheet.
According to the accrual concept of accounting, transactions are recorded in the books of accounts at the time of their occurrence and not when the actual cash or a cash equivalent is received or paid.
Question 4
1 / -0

The rent paid to landlord is credited to ________________.

A
Landlord's account

B
Rent account

C
Cash account

D
None of these

Solution

Rule for nominal account describe that all expense and losses should be debited and all incomes and gains should be credited. Payment of rent to landlord is an expense which need to be debited to rent account by crediting cash account.
Question 5
1 / -0

Proprietor's account is a __________.

A
personal account

B
real account

C
nominal account

D
none of the above

Solution

Personal accounts are related to individuals, firms, companies, etc. A few examples of personal accounts include debtors, creditors, banks, outstanding/prepaid accounts, accounts of credit customers, capital, drawings, etc.
1. Natural personal accounts: This type of personal accounts is the simplest to understand out of all and includes God's creations who have the ability to deal, who, in most cases, are people. E.g. Kumar's A/c, Adam's A/c, etc.
2. Artificial personal accounts: Personal accounts which are created artificially by law, such as corporate bodies and institutions, are called Artificial personal accounts. E.g Pvt. Lt companies, clubs, etc.
3. Representative personal accounts: accounts which represents a certain person or a group directly or indirectly.
Proprietor's account ,is related to account of a person which is a God's creations. Hence, it is classified as a personal account.
Question 6
1 / -0

Journal and ledger records transactions in ___________________.

A
A chronological order and analytical order respectively

B
An analytical order and chronological order respectively

C
A chronological order only

D
An analytical order only

Solution

In bookkeeping and accounting, a ledger is a book (or record) for collecting historical transaction data from a journal and organizing entries by account. The ledger provides the transaction history and current balance in each accounting system account, throughout the accounting period.
Question 7
1 / -0

Patents account is a ___________.

A
Personal account

B
Real account

C
Nominal account

D
None of the above

Solution

Accounts relating to properties or assets are known as "Real Accounts". A separate account is maintained for each asset e.g. Cash, Machinery, Building, etc. Real accounts can be further classified into tangible and intangible.
Intangible real accounts represents assets and properties which cannot be seen, touched or felt but can be measured in terms of money. For e.g. Goodwill account, Trademark account, Patents account.
Patent account is an intangible asset and hence, is classified as a real account.
Question 8
1 / -0

Bill payable account is a ___________.

A
personal A/c

B
real A/c

C
nominal A/c

D
none of the above

Solution

A bill payable is a document which shows the amount owed for goods or services received on credit (meaning not paid at the time that the goods or services were received). The provider of the goods or services is referred to as the supplier or vendor. Hence, a bill payable is also known as an unpaid vendor invoice.
Question 9
1 / -0

When is it necessary to analyse a transaction in terms of debit and credit?

A
At the time of journalizing

B
At the time of posting

C
In both the cases

D
In no case

Solution

At the time of journalizing, transactions are analysed in terms of debit and credit.
Then it is recorded in the form of entries in journal books.
The golden rules are applied for passing any entry in the journal books
Journal is also known as books of original entry or books of primary entry.
Question 10
1 / -0

Bank overdraft account is a ___________.

A
Personal Account

B
Real Account

C
Nominal Account

D
All of the Above

Solution

Bank Account is a personal account. It comes under the category of Artificial personal account. Artificial persons are created by law and Real persons are members in it. So Bank account is a personal account.

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Nature of Accounts and Rules of Debit and Credit Test 13

Result

Nature of Accounts and Rules of Debit and Credit Test 13

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Rank

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SHARING IS CARING

Question 1

Building account in a nominal account

Outstanding rent account is a non-personal account

Every debit has a corresponding credit

Incomes are debited

Solution

Question 2

wages A/c

machine A/c

Mohans A/c

cash A/c

Solution

Question 3

Personal A/c

Real A/c

Nominal A/c

None of the above

Solution

Question 4

Landlord's account

Rent account

Cash account

None of these

Solution

Question 5

personal account

real account

nominal account

none of the above

Solution

Question 6

A chronological order and analytical order respectively

An analytical order and chronological order respectively

A chronological order only

An analytical order only

Solution

Question 7

Personal account

Real account

Nominal account

None of the above

Solution

Question 8

personal A/c

real A/c

nominal A/c

none of the above

Solution

Question 9

At the time of journalizing

At the time of posting

In both the cases

In no case

Solution

Question 10

Personal Account

Real Account

Nominal Account

All of the Above

Solution

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