Tag: elements of book keeping and accountancy

Questions Related to elements of book keeping and accountancy

Sales for the year ended $31$st March, $2015$ amounted to Rs. $10,00,000$. Sales included goods sold to Mr.A for Rs. $50,000$ at a profit of $20\%$ on cost. Such goods are still lying in the godown at the buyer's risk. Therefore, such goods should be treated as part of.

elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

  1. Sales

  2. Closing stock

  3. Goods in transit

  4. Sales return

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Correct Option: A

Journalizing is ___________.

elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

  1. process of having the source of transactions

  2. process of recording transactions in the journal

  3. process of having the sources of transactions for journal

  4. none of the above

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Correct Option: B
Explanation:

Journalizing is the process of recording a business transaction in the accounting records. This activity only applies to the double-entry bookkeeping system.  

This calls for the identification of the general ledger accounts that will be altered as a result of the transaction.

A debit note for 20,000 issued to Mr. Z for goods returned by us is to be accounted for in ______________.

elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

  1. Bills receivable book

  2. General journal

  3. Purchases return book

  4. Purchase book

Show answer
Correct Option: C
Explanation:

A supplier when an order is received, this may be due to poor quality, inaccurate quantity, untimely delivery or other reasons. 

Purchase returns are also called returns outward and an appropriate purchase returns/returns outward book is maintained.

All returns are primarily recorded in the purchase returns book unless the returns are not that frequent, in which case they are recorded in the journal.

_______ is used to record the details of bills receivable by the business organization.

elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

  1. Purchases Book

  2. Bills Payable Book

  3. Bills Receivable Book

  4. None of the above

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Correct Option: C
Explanation:

Accounts Receivable (AR) is the proceeds or payment which the company will receive from its customers who have purchased its goods & services on credit. Usually the credit period is short ranging from few days to months or in some cases maybe a year.

A Customer returning the goods purchased on credit, may inform the seller by sending _______________.

elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

  1. Debit Note

  2. Credit Note

  3. Court Notice

  4. Return Invoice

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Correct Option: A
Explanation:

A debit note is a document used by a vendor to inform the buyer of current debt obligations, or a document created by a buyer when returning goods received on credit. The debit note can provide information regarding an upcoming invoice, or may serve as a reminder for funds currently due.

The process of recording transaction in different journals is called _______.

elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

  1. Posting

  2. Entry making

  3. Adjusting

  4. Journalizing

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Correct Option: D

Which of the following specialized journals records "good returned by customers"?

elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

  1. Purchase journal

  2. Sales journal

  3. Purchases return journal

  4. Sales return journal

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Correct Option: D

Goods returned by Mr Y for Rs 10000 passed through the Purchased Return Book. This error will result in _________________.

elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

  1. Increase in gross profit

  2. Decrease in gross profit

  3. No effect on gross profit

  4. Either (a) or (b)

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Correct Option: A

Goods returned to X for Rs.10,000 passed through the Sales Return Book. The error will result in ________________.

elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

  1. Increase in gross profit

  2. Decrease in gross profit

  3. No effect on gross profit

  4. Either (a) or (b)

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Correct Option: B

Credit purchase of plant and machinery is recorded in_________________.

elements of book keeping and accountancy book of original record - journal understand the need for journal journals functions, advantages, objects and importance of journal

  1. purchase day book

  2. purchase ledger

  3. cash book

  4. general journal

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Correct Option: D