Tag: accountancy

Questions Related to accountancy

The Negotiable Instruments Act, 1881 has recognised an _____________ also as a cheque.

accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

  1. virtual cheque

  2. accommodation bill

  3. bearer cheque

  4. electronic cheque

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Correct Option: D

 A cheque does not include the electronic image of a truncated cheque and a cheque in the electronic form.

accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

  1. True

  2. False

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Correct Option: B

A cheque is always payable on demand.

accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

  1. True

  2. False

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Correct Option: A

The term "a cheque in the electronic form" is defined in the Negotiable Instruments Act, 1881 under _______.

accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

  1. Section 6 (a)

  2. Section 8 (a)

  3. Section 7 (a)

  4. Section 6

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Correct Option: A

Cheque is as _______________.

accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

  1. Promissory note

  2. Bill of exchange

  3. Both a and b above

  4. None of the above

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Correct Option: B

If the words "not negotiable' are used with special crossing in a cheque, the cheque is _______________.

accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

  1. Not transferable

  2. Transferable

  3. Negotiable under certain circumstances

  4. None of the above

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Correct Option: D

A Promissory Note or Bill of Exchange can be made payable ___________.

accountancy accounting for bills of exchange transaction nature, advantages and types of cheques meaning, definition and characteristics of promissory note promissory note

  1. On demand

  2. On a specified date

  3. After a specified period - months or days

  4. All of the above

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Correct Option: D

Trial balance provides you the following information:
Debtors                              80,000
Bad debts                             2,000
Provision for bad debts        4,000
It is desired to maintain a provision for bad debt of  1,000. State the amount to be debited/credited in profit and loss account.

accountancy provisions and reserves reserves provisions provision and reserves

  1. 5,000 (Debit)

  2. 3,000 (Debit)

  3. 1,000 (Credit)

  4. None of these

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Correct Option: C
Explanation:

The balance in provision for bad debts is appearing in trial balance Rs.4000, of which bad debts of Rs.2000 is written off. Balance lying in provision account is now Rs.2000. It is desired to maintain a provision for bad debts of Rs.1000 only, hence an excess provision of Rs.1000 to be written back to profit & loss account by crediting the profit & loss a/c. 


                                           Provision for Bad Debts A/c

Particulars                             Amount                   Particulars                     Amount
To Bad debts                         2000                    By  Op Balance b/f            4000
To Profit & Loss A/c               1000
To Clo Balance c/d                1000
                                             -----------                                                              ----------
                                                4000                                                                4000
                                             ------------                                                            -----------

The provision for establishment of a 'District Consumer Protection Council' was made by the year _________ .

accountancy provisions and reserves reserves provisions provision and reserves

  1. 1988

  2. 1993

  3. 2002

  4. 2008

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Correct Option: C

Provisions are shown in liabilities along with ___________.

accountancy provisions and reserves reserves provisions provision and reserves

  1. Capital

  2. Long-term liabilities

  3. Current liabilities

  4. None of the Above

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Correct Option: C
Explanation:

A provision is recorded in a liability account, which is typically classified on the balance sheet as a current liability.