Self Studies
Self Studies
Self Studies
Self Studies

Nature of Accounts and Rules of Debit and Credit Test 6

Result Self Studies

Nature of Accounts and Rules of Debit and Credit Test 6
  • Score

    -

    out of -
  • Rank

    -

    out of -
TIME Taken - -
Self Studies

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Self Studies Self Studies
Weekly Quiz Competition
  • Question 1
    1 / -0
    Bank Charges Account is _____.
    Solution
    The term bank charge covers all charges and fees made by a bank to their customers. In common parlance, the term often relates to charges in respect of personal accounts or checking account. These charges may take many forms , including monthly charges for the provision of an account, charges for specific transactions (other than overdraft limit excess), interest in respect of overdrafts, and charges for exceeding authorised overdraft limits, or making payments. 
    Bank charges account is hence classified as a nominal account.
  • Question 2
    1 / -0
    Freight Account is __________.
    Solution
    The nominal accounts are all those that are in nature of incomes and expenses of a business. These accounts are closed at the financial year end with the income and expense summary to arrive at the net profit or loss amount. Nominal accounts start at the year end with zero balances (or no balance) and ends with no balance to carry forward (as all is transferred to income summary)
    Examples of nominal accounts are Sales Revenue, Service Revenue, Cost of Goods Sold, Selling and Administrative Expenses, Gains and Losses accounts. Freight account is hence classified as a nominal account.
  • Question 3
    1 / -0
    Goodwill Account is _________.
    Solution
    Real accounts are the accounts that refer to the possessions of a business. The possessions may be tangible or intangible. The possessions are assets of a business. 
    Normally the books of business contains tangible assets that have physical existence. However, there are intangible assets as well as that can appear in the books of accounts. For instance, Copyrights, Trademarks, Goodwill, Patents are intangible nature but a business certainly possess them. The balances of these real accounts are not closed at the financial year end but are carried forward as opening balances of the new financial year. 
    Goodwill is an intangible asset, and hence it is classified as real account.
  • Question 4
    1 / -0
    Discount Account is_____.
    Solution
    Accounts relating to income, revenue, gain, expenses and losses are termed as nominal accounts. These accounts are also known as fictitious accounts as they do not represent any intangible asset. A separate account is maintained for each head or expense or loss and gain or income. Wages account, Rent account, Commission account are some examples of nominal account. The rule for nominal accounts is: Debit all expenses and losses; Credit all incomes and gains.
    Discount account can be the indirect income (if received) or indirect expenses (if paid) of a business and hence, they are classified as nominal accounts.
  • Question 5
    1 / -0
    Accounts of property is __________.
    Solution
    Real accounts are the accounts that refer to the possessions of a business. The possessions may be tangible or intangible. The possessions are assets of a business. 
    Examples of real accounts include Building, Furniture & Fixtures, Vehicles, Inventory, Cash, etc.
    Normally the books of business contains tangible assets that have physical existence. However, there are intangible assets as well that can appear in the books of accounts for instance Copyrights, Trademarks, Goodwill, Patents are intangible nature but a business certainly possess them.
    The balances of these real accounts are not closed at the financial year end but are carried forward as opening balances of the new financial year.
  • Question 6
    1 / -0
    A cash memo is prepared and issued by__________.
    Solution
    A cash memo is prepared by the seller when the goods are sold for cash. The cash memo is similar to an invoice, only difference being invoice is issued for credit sale and cash memo for cash sales.
  • Question 7
    1 / -0
    Profit on Sale of Furniture Account __________.
    Solution
    Accounts relating to income, revenue, gain, expenses and losses are termed as  nominal accounts. These accounts are also known as fictitious accounts as they do not represent any tangible asset. A separate account is maintained for each head or expense or loss and gain or income. Wages account, Rent account, Commission account are some examples of nominal accounts. The rule for Nominal accounts is: Debit all expenses and losses; Credit all incomes and gains.
    Profit on sale of Furniture account is the indirect income or gain for a business since profit is earned on the sale of furniture and hence, it is classified as  a nominal account.
  • Question 8
    1 / -0
    Sales accounts always shows ________ balance.
    Solution
    Accounts of every type of assets and expenses have debit balances and accounts of every type of liabilities and incomes have credit balance.
  • Question 9
    1 / -0
    The word 'Credit' is derived from Latin word ________ .
    Solution
    Credit is the trust which allows one party to provide money or resources to another party where that second party does not reimburse the first party immediately, but instead promises either to repay or return those resources at a later date. The word credit is derived from Latin word credere which means "to trust, entrust, believe".
  • Question 10
    1 / -0
    Book of original entries is also known as ______.
    Solution
    Keeping the kind of books for recording the business transaction depends on the business need but there are two important books which are essentially to kept by each business i.e. journal and ledger. Any transaction which occurs in the business need to be first recorded in journal first. Hence all the original entries can be found from journal itself. 
Self Studies
User
Question Analysis

  • Correct -

  • Wrong -

  • Skipped -

My Perfomance
  • Score

    -

    out of -
  • Rank

    -

    out of -
Re-Attempt Weekly Quiz Competition
Self Studies Get latest Exam Updates
& Study Material Alerts!
No, Thanks
Self Studies
Click on Allow to receive notifications
Allow Notification
Self Studies
Self Studies Self Studies
To enable notifications follow this 2 steps:
  • First Click on Secure Icon Self Studies
  • Second click on the toggle icon
Allow Notification
Get latest Exam Updates & FREE Study Material Alerts!
Self Studies ×
Open Now