Tag: book keeping and accountancy

Questions Related to book keeping and accountancy

The words 'To Balance b/f' or By Balance b/f' are recorded in the Particulars column of an account at the time of posting of ________________.

book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

  1. All compound entries.

  2. An opening entry.

  3. A closing entry.

  4. An adjusting entry.

  5. A transfer entry

Show answer
Correct Option: B
Explanation:

At the beginning of a new journal page, the opening balance is quoted from the previous page, this balance pulled forward from the previous page to the current page is termed as “Balance B/F” or “Total B/F” (Brought Forward).

When a cheque received on a particular date is not deposited the same day into bank, it is entered in ________________.

book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

  1. Cash column on the debit side

  2. Bank column on the debit side

  3. Cash column on the credit side

  4. Cash column on the debit side and credit side.

Show answer
Correct Option: A
Explanation:
When a cheque received is not deposited on the same day, it is taken in the cash account and when it is deposited in bank, then a contra entry is passed. 
For example cheque received from Ram on 15th March is deposited on 18th March, following entries will be passed: 15/3 Cash A/c Dr.

Under Indian system, records are maintained in _________ language.

book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

  1. Marathi

  2. Hindi

  3. Marwari

  4. All of the above

Show answer
Correct Option: D

Which is the most conventional system of accounting?

book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

  1. Indian system

  2. Mahajani system

  3. Deshi Nama system

  4. All of the above

Show answer
Correct Option: D

An entry which has more than one debit and or credit is called ________.

book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

  1. single

  2. multiple

  3. compound

  4. none of these

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Correct Option: C

If cash discount is offered to customers, then which of the following would increase?

book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

  1. Sales

  2. Debtors

  3. Debt collection period

  4. All of the above

Show answer
Correct Option: A
Explanation:
A cash discount is allowed by the organization to the customers to get the collection fast against the credit sales. Customer also do the trade off between the discount and the cost of funds. Offering cash discount may lead to increase in sales.

The books to be compulsorily maintained by a company are ______________.

book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

  1. Cash book and ledger

  2. Sales and purchase book

  3. Journal

  4. All of the above

Show answer
Correct Option: D
Explanation:

All business transactions are recorded in the books of account depending on the nature of transaction. There are certain books which are compulsorily maintained by the business. 


Below are the books which are mandatory to maintained to record all the transactions:

1) Cash Book- It records all the cash transactions.

2) Sales & Purchase book- It records all credit sales and credit purchases.
3) Journal- It records those transactions which are not recorded in specific books. Purchase of assets etc.
4) Ledger- All above set of entries are to be posted in ledger to find out the balance of each account.

Inventory holding cost may include ___________________.

book keeping and accountancy accounting procedures - rules of debit and credit meaning, advantages and limitations of journals understand the classification of accounts introduction to books of prime entry

  1. Material purchase cost

  2. Penalty charge for default

  3. Interest on loan

  4. None of the above

Show answer
Correct Option: D
Explanation:

Inventory holding cost is that cost which is incurred by the organization to hold the unsold inventory. This cost includes the cost of storing the inventory, ordering cost, cost of storage space, cost of insurance of the inventory.

In the absence of an agreement to the contrary, the partners are :

book keeping and accountancy partnership accounts (preliminary) adjustment of distributable profits final accounts of partnership firms profit-loss appropriation account

  1. Entitled to $6\%$ interest on their capitals only when there are profits

  2. Entitled to $9\%$ interest on their capitals only when there are no profits

  3. Entitled to interest on capital at the bank rate only when there are profits

  4. Not entitled to any interest on their capitals

Show answer
Correct Option: D
Explanation:

Interest on capital is a mode of appropriation of profits to partners. Interest on capital is an income on the capital contributed by the partners. Interest on capital is calculated on time basis having regard to the introduction of fresh capital and withdrawal of capital.

Interest on capital can only be provided if there is a provision to that effect in the partnership deed. If the partnership deed is silent, then interest on capital is not allowed.

The Advance Ruling Authority shall comprise of

book keeping and accountancy partnership accounts (preliminary) adjustment of distributable profits final accounts of partnership firms profit-loss appropriation account

  1. One member from amongst the officers of Central tax.

  2. One member from amongst the officers of State tax or Union Territory tax as the case may be.

  3. (a) & (b)

  4. None of the above

Show answer
Correct Option: C