Nature of Accounts and Rules of Debit and Credit Test 2

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Nature of Accounts and Rules of Debit and Credit Test 2

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Question 1
1 / -0

Insurance unexpired accounts is a _____________.

A
Real account

B
Personal account

C
Nominal account

D
None of these

Solution

Unexpired insurance is an another term which is used for prepaid insurance. Prepaid insurance is deducted from the insurance premium expenses account in profit & loss account and shown in balance sheet as current assets.

For example, if an insurance premium of Rs.1200 is paid for the period from 1st July 2017 to 30th June 2018, an amount equal to Rs.300 (for 3 months , April, May,June 2018) is unexpired as it is not pertaining to the current financial year 2017-18. Its a representative personal account. These accounts are not in the name of a specific person but are represented as personal account.
Question 2
1 / -0

Identify which is the wrong rule?

A
Nominal account - debit all expenses & losses

B
Real account - credit what comes in

C
Nominal account - credit all incomes & gains

D
Personal account - debit the receiver

Solution

Account can be classified in to three categories i.e. Personal account, real account and nominal account. All these accounts are governed by some basic rules which are called "Golden Rule" of accountancy.

Rule for real account is:
Debit what comes in
Credit what goes out
Question 3
1 / -0

Which of the following is not an example of real A/c?

A
Machinery

B
Building

C
Cash

D
Creditor

Solution

Supplier of goods are called as creditors. The creditors are recorded as current liability in to the business.
Creditors are individual, firm or companies which are personal account and not the real account.
Question 4
1 / -0

What comes in is to be debited, what goes out is to be credited?

A
Rules of Personal

B
Rules of Real

C
Rules of Nominal

D
All of these

Solution

Accounts are classified as personal account, real account and nominal account. There are certain basic rule against each account. These are called golden rule of accountancy.

Rule for Real Account is:
Debit what comes in
Credit what goes out
Question 5
1 / -0

Provision for doubtful debts account is a ________.

A
Asset

B
Liability

C
Income

D
None of these

Solution

Provision for doubtful debts is a liability for the business. it is shown under liability side of the balance sheet.
The amount for provision for doubtful debts changes every day as new provision made in the current year.
Bad debts for the current year are to subtracted from it, and an additional amount of provision is to be added in such provision for doubtful debts account.
Question 6
1 / -0

Jay account is a __________ account.

A
Nominal account

B
Personal account

C
Real account

D
Trading account

Solution

There are three types of account, personal account, real account and nominal account. Account which are related to the person are called as personal account. Real accounts are those which are not closed at the end of the financial year and the balance of these accounts are carried over to the next financial year. Accounts of expense and incomes are nominal account. Jay is a person hence it is a personal account.
Question 7
1 / -0

Interest, rent, electricity bill are types of _______ account.

A
Personal a/c

B
Impersonal a/c

C
Real a/c

D
Nominal a/c

Solution

Accounts are classifies as Personal Account, Real Account and Nominal Account.

All expense and income accounts are nominal accounts. Interest, rent, electricity, wages, salaries are expenses and are considered as nominal account. At the end of the financial year, all nominal accounts are transferred to trading and profit & loss account. None of the nominal account balance is carried over to the next financial year.
Question 8
1 / -0

Salary account is by its nature a _________.

A
Real Account

B
Nominal Account

C
Personal Account

D
Trading Account

Solution

Accounts are classified in three categories i.e. personal a/c, real a/c and nominal a/c. Account of any person is a personal account, the real account is an account which does not closed at the end of accounting year and the balances are carried over to the next year.
All expense account are nominal account. Salary account is an expense account and is a nominal account.
Question 9
1 / -0

"Debit the receiver credit the giver"is the rule for _____________.

A
Real account

B
Personal account

C
Nominal account

D
None of these

Solution

Account are classified in to three categories i.e. Personal Account, Real Account and Nominal Account. For every account there is rule. These are called golden rule of accountancy.
Rule for personal account is:
Debit the receiver
Credit the giver
Question 10
1 / -0

The word 'Credit' means _________.

A
What is

B
What ought to be

C
Due to that

D
Due for that

Solution

Credit is basically a trust in which one party gives money or resources to other party who does not reimburse the thing immediately but pays the same at future date. It also means due to that i.e. amount received.

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Nature of Accounts and Rules of Debit and Credit Test 2

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Nature of Accounts and Rules of Debit and Credit Test 2

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SHARING IS CARING

Question 1

Real account

Personal account

Nominal account

None of these

Solution

Question 2

Nominal account - debit all expenses & losses

Real account - credit what comes in

Nominal account - credit all incomes & gains

Personal account - debit the receiver

Solution

Question 3

Machinery

Building

Cash

Creditor

Solution

Question 4

Rules of Personal

Rules of Real

Rules of Nominal

All of these

Solution

Question 5

Asset

Liability

Income

None of these

Solution

Question 6

Nominal account

Personal account

Real account

Trading account

Solution

Question 7

Personal a/c

Impersonal a/c

Real a/c

Nominal a/c

Solution

Question 8

Real Account

Nominal Account

Personal Account

Trading Account

Solution

Question 9

Real account

Personal account

Nominal account

None of these

Solution

Question 10

What is

What ought to be

Due to that

Due for that

Solution

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