Tag: elements of book keeping and accountancy

Questions Related to elements of book keeping and accountancy

State with reasons whether the following statement is true or false:
Inventory by-product should be valued at net realisable value where cost of by product can be separately determined.

elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

  1. True

  2. False

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Correct Option: B

State with reasons whether the following statement is true or false:
Damaged inventory should be valued at cost or market price; whichever is lower.

elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

  1. True

  2. False

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Correct Option: A

State with reasons whether the following statement is true or false:
The inventory under AS-2 is valued on the basis of cost price or current replacement cost, which ever is less.

elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

  1. True

  2. False

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Correct Option: A

Goods costing Rs.10,000 destroyed by fire should be credited to 

elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

  1. Purchase Account

  2. Sales Account

  3. Cash Account

  4. Goods Lost by Fire A/c

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Correct Option: A
Explanation:
 Particular  L.F.  Dr.  Cr.
 Lost by fire A/c             Dr.            To Purchase A/c                (Being goods destroyed by fire)    10000  10000

Goods costing Rs.10000 destroyed by fire will be credited to purchase A/c.

Goods distributed as free samples is an example of _________.

elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

  1. No change in Owner's Equity

  2. Increase in Asset & Owner's Equity

  3. Decrease in Liability & Owner's Equity

  4. None of these

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Correct Option: A

Good worth $Rs.500$ taken by the proprietor for personal use should be debited to ______________.

elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

  1. Debtors Accounts

  2. Drawing Account

  3. Installation Expenses account

  4. None of these

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Correct Option: B

A withdrawal of goods from business by the proprietor should be credited to _______________.

elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

  1. Drawing A/c

  2. Capital A/c

  3. Purchases A/c

  4. Sales A/c

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Correct Option: C
Explanation:

The withdrawal of goods by the owner for personal use is placed on a temporary drawings account and reduces the owners equity. It is not an expense of the business. Goods are withdrawn from the business and taken by the owner, which reduces the inventory of the business.

Employees took stock costing Rs 1000 (sale price Rs 1200) in this case _____________________.

elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

  1. Salaries A/c to be debited with Rs. 1200

  2. Sales A/c to be credited with Rs. 1200

  3. Purchases A/c to be credited with Rs 1000

  4. Sales A/c to be credited with Rs 1000

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Correct Option: C

Goods sod to Ram for cash Rs 1000 ________________.

elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

  1. Ram's Account to be debited

  2. Ram's Account to be credited

  3. Sales Account to be debited

  4. Cash Account to be credited

  5. None of these

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Correct Option: E

Goods costing Rs 1000 (Sale Price Rs 1200) distributed as free samples should be credited to ________.

elements of book keeping and accountancy methods of valuation of closing stock adjustment for closing stock only closing stock meaning, kinds and important terms relating to stock

  1. Sales Account with Rs 1200

  2. Sales Account with Rs 1000

  3. Purchases Account with Rs 1000

  4. Loss by Theft A/c

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Correct Option: C