Tag: meaning, importance and components of voucher

Questions Related to meaning, importance and components of voucher

Which of the following statement is correct and which is incorrect ?
(I) In Receipt & Payment A/c all receipts and payments are shown irrespective of the year to which they pertain.
(II) The difference at Dr. side of Receipt & Payment A/c account is known as surplus or deficit and deducted from capital fund.
(III) Income & Expenditure A/c is always accompanied by balance sheet.
(IV) Going concern assumption is not relevant for accounting of non-profit organization.
Select the correct answer from the options given below.  

elements of accounts origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

  1. (I) - correct, (II) - incorrect (IIl) - correct, (IV) - incorrect

  2. (I) - incorrect, (II) - correct (II) - incorrect, (IV) - correct

  3. (I) - incorrect, (II) - incorrect (II) - correct, (IV) - correct

  4. (I) - incorrect, (II) - incorrect (II) - correct, (IV) - incorrect

Show answer
Correct Option: A
Explanation:
(I) Correct- In Receipts and payments account only cash transactions are taken in account whether or not they are related to this year.
(ii) Incorrect- The difference at the debit side of receipts and payments account is balance of cash at the end of the year, Receipts and payments account is just like a cash account. Hence, after taking into account all the transactions what is left is balance of cash at the end of the year. 
(iii) Correct- Income and  expenditure account is always accompanied by  balance sheet because it contains the balance that occur in the year end. Income and expenditure doesn't account for advances and outstanding payments.
(iv) Incorrect - Going concern means it is assumed that the business will go on forever. This accounting assumption is relevant for all companies without any exception.

Which among the following situation will best explain about issuing debit note to a customer:
A) When the amount payable by buyer to seller increases.
B) Return of goods due to bad quality.
C) When the amount payable by buyer to seller decreases.
D) Goods delivered has charged an extra price.  

elements of accounts origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

  1. A and B

  2. B and C

  3. A and D

  4. B and D

Show answer
Correct Option: B
Explanation:

A debit note is a note which is issued when goods purchased are returned by the purchaser to the vendor or in other words when goods are returned by the buyer to the seller. A debit note signifies that the liability of the buyer has been reduced for payment or expense. Whereas a credit note is a note which is issued by the vendor or seller to the purchaser in respect of return of goods. 

When a buyer returns goods to the seller, he sends a _______ as intimation to the seller of the amount and quantity being returned and requesting the return of money. Whereas when a Seller receives goods (returned) from the buyer, he prepares and sends a _______ as intimation to the buyer showing that the money for the related goods is being returned in the form of a credit note.

elements of accounts origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

  1. Debit note; Credit note

  2. Credit note; Debit note

  3. Cash memo; Credit memo

  4. Debit note; Cash memo

Show answer
Correct Option: A
Explanation:

A debit note is a note which is issued when goods purchased are returned by the purchaser to the vendor or in other words when goods are returned by the buyer to the seller. A debit note signifies that the liability of the buyer has been reduced for payment or expense. Whereas a credit note is a note which is issued by the vendor or seller to the purchaser in respect of return of goods. 

A _______ is a simple official acknowledgment, that the goods or services have been received. It is prepared by the vendor and given to the consumer and is used to show the ownership of the item. 

elements of accounts origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

  1. Receipt

  2. Invoice

  3. Cash memo

  4. Sale deed

Show answer
Correct Option: A
Explanation:

Receipt is a document that states that a payment against a particular sale of goods or services has been received. It acts as a proof of payment. A receipt contains the details about the person making the payment, amount of the payment made, date of payment, etc.

Which among the following cases a firm issues a credit note to the customer:
A) When the buyer account is overcharged
B) When the buyer returns the goods purchased by him
C) Unit price overcharged or overbilled
D) Product wrongly shipped 

elements of accounts origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

  1. A and C

  2. A and D

  3. B and C

  4. C and D

Show answer
Correct Option: C
Explanation:

Option C (B and C). A credit note is issue when the  customer account is over debited by the buyer. The buyer issues  a credit note and hence the over debit is reduced by issuing a credit note. Over debit may occur when buyer returns the goods or when unit price is overcharged or overbilled. 

The _________ is a document that a seller passes to a buyer at the time of a specific purchase of goods or services. It is the equivalent of an invoice and is only used to record transactions that are paid for using cash, rather than bank transactions.

elements of accounts origin of transactions - source documents and preparation of vouchers meaning, importance and components of voucher bank book and petty cash book source documents

  1. Voucher

  2. Invoice

  3. Cash memo

  4. Credit memo

Show answer
Correct Option: C
Explanation:

Cash Memo. A cash memo is documentary evidence of the payment made. The content of a cash memo and invoice are the same. An invoice is document that is given by the buyer to the purchaser when goods are purchased on credit.