Tag: elements of book keeping and accountancy

Questions Related to elements of book keeping and accountancy

Another term used for recording a business transaction is ___________.

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

  1. Journalizing

  2. Vouching

  3. Ledger posting

  4. Consolidation

Show answer
Correct Option: A
Explanation:

Every business transaction must first be recorded in journal. Hence all original entries are found in journal itself which is a subsidiary books. Recording a transaction is also known as journalizing.

A journal is also known by_____.

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

  1. Account current

  2. Book of original entry

  3. Purchase day book

  4. Current Account

Show answer
Correct Option: B
Explanation:

Every business transaction must first be recorded in journal. Hence all original entries are found in journal itself which is a subsidiary books.

 Subsidiary books of accounts are also called book of original entry as all the transactions are recorded originally or at the first instance in these books.

How many columns are in a journal?

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

  1. 4

  2. 5

  3. 6

  4. 3

Show answer
Correct Option: B
Explanation:
 Date  Particulars  Ledger Folio no Dr. Amount  Cr. Amount 

There are 5 columns in a journal:


An entry made in the journal is called _______.

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

  1. Journal entry

  2. Diarizing

  3. Recording

  4. Narration

Show answer
Correct Option: A
Explanation:

Every business transaction must first be recorded in journal. These are called journal entry. Hence all original entries are found in journal itself which is a subsidiary books. 

Goods distributed as free sample would be __________________.

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

  1. Debited to Advertisement A/c and credited to Purchase A/c.

  2. Debited to Trading A/c and Credited to Profit and loss A/c

  3. Credited to sale A/c and Debited to purchase A/c

  4. Credited to Trading A/c and Debited to Drawing A/c

Show answer
Correct Option: A
Explanation:

Goods distributed as free samples are products given away by a business usually for promotional reasons.

The goods distributed as free samples do not have a sales value and therefore cannot be recorded in the accounting records as sales.

The free product samples do however have a cost which needs to be removed from the cost of sales account and recorded as an expense. The expense account used will depend on the reason the goods were distributed as free samples and might include for example sales and marketing, promotion, advertising, charity or simply a free samples expense account.

Journal Entry :- 

Advertisement A/c Dr.

To Purchase A/c

 

Which of these is/are subsidiary books?

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

  1. Sales day book

  2. Purchase day book

  3. Cash book

  4. All of the above

Show answer
Correct Option: D
Explanation:

Subsidiary books are those books where the original entry of a transaction is recorded. Sales day book records credit sales , all credit purchases are recorded in purchase day book and all cash transactions are recorded in cash book. 

Books of original entry is also known as _______.

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

  1. Invoice book

  2. Journal

  3. Debit/Credit note book

  4. Ledger

Show answer
Correct Option: B
Explanation:

Books of original entry refers to the accounting journals in which business transactions are initially recorded. The information in these books is then summarized and posted into a general ledger, from which financial statements are produced refers to the accounting journals in which business transactions are initially recorded. The information in these books is then summarized and posted into a general ledger, from which financial statements are produced.

Which of the following is not a book of original entry?

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

  1. The Journal

  2. The Ledger

  3. The Cash Book

  4. The Bill Receivable Book

Show answer
Correct Option: B
Explanation:

Books of original entry refers to the accounting journals in which business transactions are initially recorded. The information in these books is then summarized and posted into a general ledger, from which financial statements are produced.

When a cheque received is endorsed, it must be entered on _____________.

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

  1. Credit side of the cash book only

  2. Debit side of the cash book only

  3. Both sides of the cash book

  4. No where

Show answer
Correct Option: C
Explanation:

A bearer cheque received from a party and not deposited in the bank, can be given to any third party for making the similar payment to the latter. This is known as endorsement. On endorsement of cheque to the third party the cash column must be reduced so that it gets recorded in the cash column on the credit side of the cash book. It should be noted that when the cheque was received, it must have been recorded in the cash column on the debit (receipt) side of the cash book.

Which of the following statements is correct?

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

  1. Consignee will pass a journal entry on receiving goods from consignor

  2. Consignee will not pass any journal entry on receiving goods from consignor

  3. The ownership of goods will be transferred to consignee at the time he receives goods

  4. Consignee will treat consignor as creditor when he receives goods

Show answer
Correct Option: B
Explanation:

There are no entries passed in the books of the consignee for the consignment of goods sent by the consignee and also for any expenses incurred by the consignor.