Nature of Accounts and Rules of Debit and Credit Test 17

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Nature of Accounts and Rules of Debit and Credit Test 17

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Question 1
1 / -0

A chronological record of transactions may be found in ________.

A
Trial Balance

B
Journal

C
Balance Sheet

D
Ledger

Solution

Journal is the book of prime entry. Transactions are recorded in order of occurrence of the financial transactions i.e. in the chronological order.
Question 2
1 / -0

The following comments below relate to the recording of journal entries. Which statement is true?

A
For any given journal entry, debits must exceed credits.

B
It is customary to record credits on the felt and debits on the right

C
The chart of accounts reveals the amount to debit and credit to the affected accounts

D
Journalization is the process of converting transactions and events into debit/credit format.

Solution

Journalization is the process of converting transactions and events into debit/credit format.
Question 3
1 / -0

Which of the following statements is incorrect?

A
In the double entry accounting system maintained manually, a journal entry A should always end with a narration explaining the need for it

B
Is needed only in the absence of other suitable book of prime entry for the transaction

C
should be substantiated by appropriate voucher and authorized at proper level

D
should always consist of a single debit entry matched by a corresponding credit entry
Question 4
1 / -0

In the particulars account the name of the account to be credited is entered at ______ place with a prefix 'To' _____________________.

A
in confirmation of the name of the account to be debited

B
next line to the account name that is to debited

C
any where in the journal

D
none of the above
Question 5
1 / -0

A brief explanation recorded in every entry in general is commonly known as ____________.

A
narration

B
explanation

C
summary

D
other information

Solution

After passing an accounting entry, a brief about the transaction is mentioned just below the entry. This brief is known as "Narration".

For example, Good purchased from Ram on credit for Rs.10000
Accounting entry with narration is as under:

Purchases A/c Dr.
To Ram
(Being goods purchased from Ram through Bill No.45 dated 23.06.2018).
Question 6
1 / -0

The reason for totaling at the end of the page of a journal is ______________.

A
It makes whole system more convenient

B
As the calculations are lengthy it is more comfortable

C
It is a general practice

D
All of the above

Solution

The reason for totaling at the end of the page of a journal is
1. It makes whole system more convenient
2. As the calculations are lengthy it is more comfortable
3. It is a general practice
Question 7
1 / -0

Generally journal is kept in a ______________.

A
Mathematical method

B
Columnar method

C
Straight method

D
None of the above

Solution

Journal is prepared in columnar manner.
There are 5 columns in a journal
They are
Date, Particulars, Ledger Folio(LF), Debit Amount, Credit Amount
Question 8
1 / -0

The other name of journal is ________.

A
Ledger

B
T account

C
Day book

D
Cash book

Solution

The other name of Journal is Day Book.
A journal is also named the book of original entry, from when transactions were written in a journal prior to manually posting them to the accounts in the general ledger or subsidiary ledger.
Question 9
1 / -0

A Sale of Rs. 100 to 'A' recorded in the Purchase Book would affect __________________.

A
Purchases Account and A's Personal Account Only

B
Sale Account and A's Personal Account Only

C
A's Personal Account Only

D
Sales Account, Purchases Account & A's Personal Account
Question 10
1 / -0

Every business transaction affects at least _______ accounts.

A
One

B
Two

C
Three

D
Infinite

Solution

Double entry system of accounting is based on the dual aspect concept. Dual aspect concept defines that every transaction gives two affects or every business transaction affects at least two accounts. One in debit and another in credit side.
For example, Goods purchases for cash of Rs.2000
In this transaction, two accounts i.e. cash and purchases are affected. Cash and purchases are both real accounts. Rule for a real account is "debit what comes in and credit what goes out".
Accordingly, in this transaction, goods are coming in the business and against that cash is going out. Accounting entry will be passed as under:

Purchases A/c Dr.
To Cash A/c

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Nature of Accounts and Rules of Debit and Credit Test 17

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Nature of Accounts and Rules of Debit and Credit Test 17

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Question 1

Trial Balance

Journal

Balance Sheet

Ledger

Solution

Question 2

For any given journal entry, debits must exceed credits.

It is customary to record credits on the felt and debits on the right

The chart of accounts reveals the amount to debit and credit to the affected accounts

Journalization is the process of converting transactions and events into debit/credit format.

Solution

Question 3

In the double entry accounting system maintained manually, a journal entry A should always end with a narration explaining the need for it

Is needed only in the absence of other suitable book of prime entry for the transaction

should be substantiated by appropriate voucher and authorized at proper level

should always consist of a single debit entry matched by a corresponding credit entry

Question 4

in confirmation of the name of the account to be debited

next line to the account name that is to debited

any where in the journal

none of the above

Question 5

narration

explanation

summary

other information

Solution

Question 6

It makes whole system more convenient

As the calculations are lengthy it is more comfortable

It is a general practice

All of the above

Solution

Question 7

Mathematical method

Columnar method

Straight method

None of the above

Solution

Question 8

Ledger

T account

Day book

Cash book

Solution

Question 9

Purchases Account and A's Personal Account Only

Sale Account and A's Personal Account Only

A's Personal Account Only

Sales Account, Purchases Account & A's Personal Account

Question 10

One

Two

Three

Infinite

Solution

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