Tag: accountancy

Questions Related to accountancy

Provision can be created for __________.

accountancy provisions and reserves reserves provisions provision and reserves

  1. Current assets

  2. Liabilities & assets

  3. Valuation adjustment for fixed asset

  4. All of the above

Show answer
Correct Option: D
Explanation:

A provision is an amount that you put in aside in your accounts to cover a future liability.
The purpose of a provision is to make a current year’s balance more accurate, as there may be costs which could, to some extent, be accounted for in either the current or previous financial year. These costs that distinctly belong to a specific year could be misleading if accounted for in the future.
A provision is not a form of saving, even though it is an amount that is put aside for a future plausible cost or obligation. Provisions resulting impact is a reduction in the company's equity.
When accounting, provisions are recognized on the balance sheet and then expensed on the income statement.

Provision can be created for any of the foloowing:

1. Current assets

2. Liabilities and assets

3. Valuation adjustment for fixed asset


Debtors are of $Rs.30000$
Bad debts are of $Rs. 6000$
Rate of provision for bad debt is $20$%
State what is the amount of Provision?

accountancy provisions and reserves reserves provisions provision and reserves

  1. $Rs.4800$

  2. $Rs.5000$

  3. $Rs.4000$

  4. $Rs.7000$

Show answer
Correct Option: A
Explanation:

Provision for bad debts is created towards anticipated bad debts based on a certain percentage. 

Amount of provision for bad debts is calculated on the net debtors i.e. after deducting the actual bad debts from the debtors. 
Solution to the given problem is as under:

Debtors                           $Rs.30000$
Less: Bad Debts             $Rs. 6000$
                                        ----------------
Balance debtors             $Rs.24000$
                                       -----------------
Provision for bad debts @$20$% on $Rs. 24000$= $Rs.4800$

Give journal entry for:
Bad debts written off.

accountancy provisions and reserves reserves provisions provision and reserves

  1. Bad debts A/c Dr.

    To Profit & loss A/c

  2. Profit & Loss A/c Dr.

    To Provision for doubtful debts A/c

  3. Profit & loss A/c Dr.

    To Sundry debtors A/c

  4. None of the above

Show answer
Correct Option: C
Explanation:

Amount which is not recoverable from the debtors is called bad debts. Bad debts has to be debited as an expense/loss and credited to sundry debtors account. 


1. Bad Debts A/c                                 Dr.
      To Sundry Debtors A/c 

Bad debts is a loss for the organization and should be debited to profit & loss account. 

2. Profit & Loss A/c                                Dr.
          To Bad Debts a/c


Instead of passing 2 separate entries, only 1 comprehensive entry can be passed:
Profit & loss A/c   Dr.
      To Sundry Debtors A/c

Debtors are of $Rs.20000$
Bad debts are of $Rs. 3000$
Rate of provision for bad debt is $10$%
State the amount for Provision?

accountancy provisions and reserves reserves provisions provision and reserves

  1. $Rs.1800$

  2. $Rs.2000$

  3. $Rs.1700$

  4. $Rs.2500$

Show answer
Correct Option: C
Explanation:

Provision for bad debts is created towards anticipated bad debts based on a certain percentage. 

Amount of provision for bad debts is calculated on the net debtors i.e. after deducting the actual bad debts from the debtors. 
Solution to the given problem is as under:

Debtors                           $Rs.20000$
Less: Bad Debts             $Rs. 3000$
                                        ----------------
Balance debtors             $Rs.17000$
                                       -----------------
Provision for bad debts @$10$% on $Rs.17000$= $Rs.1700$

Debtors are of $Rs.20000$
Bad debts are of $Rs.5000$
Rate of provision for bad debt is $15$%
State the amount for Provision?

accountancy provisions and reserves reserves provisions provision and reserves

  1. $Rs.5000$

  2. $Rs.2250$

  3. $Rs.3500$

  4. $Rs.2000$

Show answer
Correct Option: B
Explanation:

Provision for bad debts is created towards anticipated bad debts based on a certain percentage. 

Amount of provision for bad debts is calculated on the net debtors i.e. after deducting the actual bad debts from the debtors. 
Solution to the given problem is as under:

Debtors                           $Rs.20000$
Less: Bad Debts             $Rs. 5000$
                                        ----------------
Balance debtors             $Rs.15000$
                                       -----------------
Provision for bad debts @$15$% on $Rs.15000$= $Rs.2250$

Multiprocessor systems are said to be __________.

meaning and elements of computer system computer in accounting accountancy

  1. Expensive

  2. Non-efficient

  3. Reliable

  4. Operatable

Show answer
Correct Option: C

Which of the following statements is true for the dirty page in a page table?

meaning and elements of computer system computer in accounting accountancy

  1. Helps to maintain LRU information

  2. Allows only read on a page

  3. Helps to avoid unnecessary writes on paging device

  4. None of the above

Show answer
Correct Option: C

Many user terminals are connected simultaneously to same computer in process of ______________.

meaning and elements of computer system computer in accounting accountancy

  1. Loosely coupled systems

  2. Tightly coupled systems

  3. Time sharing systems

  4. Threaded systems

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Correct Option: C

Choose the odd out.

meaning and elements of computer system computer in accounting accountancy

  1. Digital computer

  2. Super computer

  3. Minicomputer

  4. Micro computer

Show answer
Correct Option: A
Explanation:

Digital Computer is capable of solving problems by processing information in discrete form, while others are types of computer.

In analogue computer __________________.

meaning and elements of computer system computer in accounting accountancy

  1. Input is first converted to digital form

  2. Input is never converted to digital form

  3. Output is displayed in digital form

  4. All of above

Show answer
Correct Option: B