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CBSE Questions for Class 11 Commerce Accountancy Recording Of Transactions - I Quiz 9 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Recording Of Transactions - I
Quiz 9
An entry which has more than one debit and or credit is called ________.
Report Question
0%
single
0%
multiple
0%
compound
0%
none of these
Explanation
An entry which has more than one debit and or credit is called compound entries.
An example of increase in assets and increase in owner's capital is __________.
Report Question
0%
Goods purchased for cash
0%
Goods purchased on credit
0%
Goods brought in by owner
0%
Capital introduced by owner
Explanation
When capital is introduced by the owner then the cash will increase as well as capital will also increase.
Capital means the Amount invested by the Owner of the Business into the business.
As the business entity Concept, the Owner of the business is considered separate from the business. T
he amount invested by the Owner of the Business into the business.is known as Capital.
When the businessman withdraws some amount from the business for personal use then it is known as the drawings.
Capital is the __________________.
Report Question
0%
excess of external liabilities over the assets
0%
excess of assets over the external liabilities
0%
excess of external liabilities over fixed assets
0%
excess of assets of over internal liabilities
Explanation
Total assets - external liabilities = capital of the company (paid - up capital)
This should not be confused with the net worth of the company.
Discount Received is an example of __________.
Report Question
0%
Increase in Asset & Owner's Liability
0%
Decrease in Asset & Owner's Liability
0%
Increase in Liability & Owner's Liability
0%
Decrease in Liability & Increase in Owner's Liability
0%
Increase in Liability & Decrease in Owner's Liability
Explanation
Discount received is an indirect income of the business. it is shown in the credit side of profit and loss account.
When discount is received, debt amount is reduced and increase in income.
Therefore, there will be d
ecrease in Liability & Increase in Owner's Liability.
Depreciation written off is an example of ________.
Report Question
0%
Increase in Asset & Owner's Liability
0%
Decrease in Asset & Owner's Liability
0%
Increase in Liability & Owner's Liability
0%
Decrease in Liability & Increase in Owner's Liability
0%
Increase in Liability & Decrease in Owner's Liability
Explanation
Depreciation written off is an expense and the amount written off will be deducted from the asset and the same will be decreased from owners equity. It is an expense and hence will be debited to the profit and loss account which will eventually reduce owner's equity.
Goods distributed as free samples is an example of _________.
Report Question
0%
No change in Owner's Equity
0%
Increase in Asset & Owner's Equity
0%
Decrease in assets & Owner's Equity
0%
None of these
Explanation
Distribution of goods as free samples is an indirect expense of a business entity, therefore, it will reduce the capital of the business.
The Journal Entry will be:-
Free Samples a/c Dr.
To Purchases a/c
So, there will be a decrease in owners equity and a decrease in stock.
Making Provision for Discount on Debtors is an example of __________.
Report Question
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Increase in Asset & Owner's Liability
0%
Decrease in Asset & Owner's Liability
0%
Increase in Liability & Owner's Liability
0%
Decrease in Liability & Increase in Owner's Liability
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Increase in Liability & Decrease in Owner's Liability
Explanation
It will reduce the debtors and increase expense therefore, there will be decrease in assets and capital.
Making Provision for Discount on Debtors is an example of
Decrease in Asset & Owner's Liability
Sale Return Book is a part of _______.
Report Question
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Journal.
0%
Ledger.
0%
Cash Book.
0%
none of these.
Explanation
Sales Return Book is the part of Journal.
Journal is divided into the number of subsidiary books. The main subsidiary books are
Cash
book
.
Purchases
book
.
Sales
book
.
Purchases return or return outwards
book
.
Sales return or return inwards
book
.
Bills receivable
book
.
Bills payable
book
.
Journal proper
Making Provision for Doubtful Debts is an example of ___________.
Report Question
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Increase in Asset & Owner's Liability
0%
Decrease in Asset & Owner's Liability
0%
Increase in Liability & Owner's Liability
0%
Decrease in Liability & Increase in Owner's Liability
0%
Increase in Liability & Decrease in Owner's Liability
Explanation
Provision for Doubtful Debts is a
liability
for the business. it is the
charge
against the profit. It is created as per the
conservatism Concept. It reduces the amount of debtors.
Debtors are
Assets
for the business.
Therefore, there will be a
decrease in assets and capital
.
Goods destroyed by fire is an example of __________.
Report Question
0%
Decrease in Assets and Owners Equity
0%
Increase in Asset & Owner's Equity
0%
Decrease in Liability & Owner's Equity
0%
None of these
Explanation
Goods Destroyed by Fire implies that there is a decrease in the number of goods. Goods are current assets for the business therefore, there is a decrease in assets.
Due to this transaction, there is a loss to the business which will result in a decrease in capital.
Therefore,
Goods destroyed by fire is an example of
Decrease in Assets and Owners Equity
The cost of stock as per physical verification as on 24th March amounted to Rs.2,00,Purchases as per Purchases Book after stock taking till 31st March amounted to Rs.2,00,000 and included the following:
(i) Rs.10,000 for goods received till 23rd March.
(ii) Rs.20,000 for goods received on 1st April. Sales as per Sales Book after stock taking, till 31st March amounted to Rs.2,00,000 and included the following:
(I) Rs.10,000 for goods delivered till 23rd March. (II) Rs.20,000 for goods delivered on 1st April. Goods are sold by the trader at a profit of 25% on Cost. The value of stock as per books Is ____________.
Report Question
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Rs.2,40,000
0%
Rs.2,38,000
0%
Rs.2,36,000
0%
Rs.2,34,000
Loan from Mahesh Account is ______________.
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An Asset Account
0%
A Liability Account
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A Revenue Account
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An Expense Account
Explanation
A liability is something a person or company owes, usually a sum of money. Recorded on the right side of the balance sheet, liabilities include loans, accounts payable, mortgages, deferred revenues, bonds, warranties, and accrued expenses.
Therefore, B is the correct option.
Goods costing Rs.10,000 destroyed as free sample should be credited to
Report Question
0%
Purchase Account
0%
Sales account
0%
Cash Account
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Drawing Account
Explanation
The journal for goods distributed as free samples is -
Advertisement Expense A/c Dr 10000
To Purchases A/c 10000
Here, purchases account is credited because goods are going out of the business, when goods are brought in the business purchases account is debited, so when goods are going out of the business it is to be credited.
Goods destroyed by Fire is _______________.
Report Question
0%
An Asset Account
0%
A Liability Account
0%
A Revenue Account
0%
An Expense Account
Explanation
Goods destroyed by Fire is an expense for the company. Hence, the correct option is D.
A cash purchase of goods for proprietor's personal use should be credited to __________________.
Report Question
0%
Purchases Account
0%
Sales Account
0%
Drawings Account
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Cash Account
Explanation
A cash purchase of goods for proprietor's personal use should be credited to Cash Account.
The entry will be
Drawings a/c Dr.
To Cash a/c
Credit means ________.
Report Question
0%
an increase in asset
0%
an increase in liability
0%
a decrease in liability
0%
a decrease in proprietor's equity
Explanation
As per Modern Rule
Debit means decrease in liabilities and Capital and
Credit means an increase in liability and capital.
Therefore, Option B is correct.
Interest receivable from Mohan ( a Borrower) Account is -
Report Question
0%
An Asset Account
0%
A Liability Account
0%
A Revenue Account
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An Expense Account
Explanation
Interest receivable from Mohan is an accrued income for the business, it is treated as an Asset.
Debit means ________.
Report Question
0%
An increase in asset
0%
An increase in liability
0%
A decrease in asset
0%
An increase in proprietor's equity.
Explanation
As per Modern Rules,
Debit means an increase in assets. examples of assets are cash, bank, machinery, furniture etc.
Credit means a decrease in assets. example- Payment of cash.
Journal is a book of __________.
Report Question
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original entry
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all cash transactions
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secondary entry
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all non-cash transactions
Explanation
As the transactions are recorded first time in journal therefore it is known as books of original entry.
Journal is sub divided into number of Subsidiary books. They are
Cash
book
.
Purchases
book
.
Sales
book
.
Purchases return or return outwards
book
.
Sales return or return inwards
book
.
Bills receivable
book
.
Bills payable
book
.
Journal proper
DEBIT signifies _________________.
Report Question
0%
Increase in assets account
0%
Decrease in liability account
0%
Decrease in capital account
0%
All of the above
Explanation
In book keeping there are two parts one is debit and other is credit. Debit is one half of the bookkeeping. Assets have a debit balance and hence an increase in the asset is debited, likewise liabilities have a credit balance and so a decrease in liabilities will be debited, Capital account has a credit balance as it is a liability for the company hence decrease in the capital account is debited as liability decreases.
Journal and subsidiary books in which transactions and events are first recorded are known as _____________.
Report Question
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Secondary books.
0%
Memorandum books.
0%
Primary books.
0%
Principal books.
Explanation
Journal and subsidiary books in which transactions and events are first recorded are known as
Primary books.
Primary book is a book or record in which certain types of transaction are recorded before becoming part of the double-
entry
book-keeping system.
'A' owned Rs. 25,000 to 'B' 'A' becomes insolvent. 'B' got A's computer valuing Rs. 11,500 in his full settlement journal entry will be passed in the books of 'B'.
Report Question
0%
Purchase A/c Dr. 11,500
To A 11,500
0%
Computer Dr 11,500
Bad-debts Dr. 13,500
To A 25,000
0%
Computer A/c Dr. 25,000
To A 25,000
0%
Computer A/c Dr. 11,500
Purchases A/c Dr. 13,500
To A 25,000
Explanation
As computer is received valuing Rs. 11500 therefore, it will be debit. the remaining amount will not be received therefore, it will written off as bad debts loss and there is no amount due from A therefore, his account will be credited.
Discount is allowed by Arun to Varun. Which of the following should be the course of action in books of Arun?
Report Question
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Credit Varun A/c and debit discount allowed A/c
0%
Debit Varun A/c and credit discount received A/c
0%
Credit Arun A/c and debit discount allowed A/c
0%
Debit Arun A/c and credit discount received A/c
Explanation
Discount allowed is an expense and hence it should be debited and Varun's account should be credit as he is availing discount by Arun.
The Journal Entry to be passed:-
Discount allowed A/c Dr.
To Varun's A/c.
If wages are paid for construction of business premises,_______A/c is credited and ____ A/c is debited.
Report Question
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Wages, Cash
0%
Premises, Cash
0%
Cash, Wages
0%
Cash, Premises
Explanation
If wages are paid for construction of business premises the amount of wages will be debited to the premises account because, according to IFRS, any expense that brings the asset to use or brings the asset in existence should be added to the cost of that machinery.
Cash account is credited because cash is being paid for incurring the wages.
What will be journal entry when cash is withdrawn from bank for personal use?
Report Question
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Drawings A/c debit, bank A/c credit
0%
Cash A/c debit, drawings A/c credit
0%
Bank A/c debit, drawings A/c credit
0%
Bank A/c debit, capital A/c credit
Explanation
Drawings
are the amounts taken by the owner of a business for his personal use in anticipation of profit.
Drawings
are usually made in the form of cash, but there could be other assets or goods withdrawn by the owner for his personal use.
Journal Entry will be:-
Drawing A/c Dr.
To Bank A/c.
Sales of the Scrap of raw materials appearing in the trial balance are shown on the credit side of _______.
Report Question
0%
Trading account
0%
Manufacturing account
0%
Profit and Loss A/c
0%
None of these
Explanation
The sale of scrap is an income and will be credited to the manufacturing account. Hence, the correct option is B.
The accounting entries for recording Rs.10,00,000 cash introduced by the owner of a business is ______________.
Report Question
0%
Debit Cash account and Credit Capital account
0%
Debit Cash account and Credit Investment account
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Credit Cash account and Debit Investment in business account
0%
Credit Cash account and Debit Owner's account
Explanation
As cash is increasing therefore, cash account will be debited and capital will be credited.
Accounting entries for the repayment of a loan received from Richard, the owner's friend is _____________________.
Report Question
0%
Debit Cash account and Credit capital account
0%
Credit cash account and Debit Richard's loan account
0%
Credit cash account and Debit capital account
0%
Debit cash account and Credit Richard's loan account
Explanation
Debit - Loan Account
The debit to the Richard's loan account records the reduction in principal of the loan balance which is the cash repayment less the interest expense.
Credit - Cash Account
Cash has been used to make the the annual repayment to the lender on the due date in accordance with the loan agreement.
A ______ is an accounting document representing an internal intent to make a payment to an external entity, such as a vendor or service provider.
Report Question
0%
Debit Note
0%
Credit Note
0%
Voucher
0%
Invoice
Explanation
A voucher is an accounting document representing an internal intent to make a payment to an external entity, such as a vendor or service provider.
Purchase of Pen for office use will be debited to __________ .
Report Question
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Pen A/c
0%
Stationery Expense A/c
0%
Any of the above
0%
None of the above
Explanation
Pen is considered as stationary for office. Therefore, Stationary A/c will be debited and cash will be credited.
The two types of cash vouchers include debit vouchers and ____________ vouchers.
Report Question
0%
Credit
0%
Memo
0%
Receipt
0%
Payment
Explanation
There are mainly two types of Cash Vouchers
1. Debit Voucher:
Debit Voucher is also known as the payment voucher. It is prepared when some payment is made by the business.
Example: Goods purchased for cash, rent paid, etc.
2. Credit Voucher:
It is also known as the Receipt Voucher. It is prepared when cash is received by the business.
Example: Amount received on sale of goods.
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.
Report Question
0%
Voucher
0%
Invoice
0%
Cash memo
0%
Credit memo
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.
State whether true or false:
There is no set format of an accounting voucher.
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True
0%
False
Explanation
True. Accounting voucher is a document that acts as a proof of a transaction. There is no set format of accounting voucher. There are different types of voucher internal or external, cash voucher, petty cash voucher, etc.
A ___________ voucher is a document which comprises of all the details of an accounting transaction.
Report Question
0%
Journal
0%
Petty Cash
0%
Debit
0%
Credit
Explanation
A Journal voucher is a voucher that consists of all the details of transactions like the date of transactions, amount, etc. A journal voucher is prepared for every transaction. They are serially numbered for convenience purpose so that journal can be prepared.
When a liability is reduced or decreased, it is recorded on the ______________.
Report Question
0%
left or credit side of the liability account
0%
right or debit side of the liability account
0%
right or credit side of the liability account
0%
left or debit side of the liability account
Explanation
Since the Liability shows credit balance as per the accounting equation. When a liability is reduced or decreased, it is recorded on the debit side of the liability account.
Details of Outward supplies shall include _______________.
Report Question
0%
Invoice
0%
Credit and Debit notes
0%
Revised invoice issued in relation to outward supplies
0%
All the above
Which of the following statements is 'True'?
Report Question
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Building Account is a nominal account
0%
Outstanding rent account is a non-personal account
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Every debit has a corresponding credit
0%
Income is debited
Explanation
Accounting is based on the Dual Aspect Concept which states that
for every debit there is an equal and opposite amount of credit.
Each Transaction shall have at least two effects in accounting.
Therefore, Option C:
Every debit has a corresponding credit is correct.
The left side of an account is known as _________ and the right side as ____________.
Report Question
0%
Debit, Credit
0%
Credit, Debit
0%
Liability, Asset
0%
None of the above
Explanation
The Ledger is divided into two side.
The left side of an account is known as Debit side and the right side as Credit side.
Each side has 4 column namely Date, Particulars, JF and Amount.
Ledger accounts are prepared after preparing journal entries.
Required return is 15% and premium for risk is 11% then risk free return would be _____________.
Report Question
0%
26.00%
0%
4.00%
0%
16.50%
0%
1.36%
In which of the following order, data is entered into the Journal?
Report Question
0%
Alphabetical order
0%
Numeric order
0%
Bullets order
0%
Chronological order
Explanation
In journal, transactions are recorded in a chronological order.
Chronological order means date wise.
Journal is prime book of accounts. The Format of Journal have 5 columns namely, Date, particulars, LF, Debit Amount, credit Amount.
Bank account is _____________.
Report Question
0%
Personal account
0%
Real account
0%
Nominal account
0%
Intangible real account
Vouchers can be displayed in
Report Question
0%
Accounts info
0%
Day book
0%
inventory info
0%
Ledger
Explanation
Vouchers can be displayed in Day book.
A
voucher
is documentary evidence
in support
of a transaction recorded in the books of account. It is a written document or paper in
support
of an entry in the books of account.
On the basis of source documents, a voucher detailing the accounts that are debited and credited is prepared.
There are two types of Accounting Vouchers
1. Cash Vouchers
2. Non-Cash Vouchers.
Therefore,
Voucher relates to
Cash receipt and payments, credit transactions
Financial risk is most associated with ___________________________.
Report Question
0%
the use of equity financing by corporations
0%
the use of debt financing by corporations
0%
equity investments held by corporations
0%
debt investments held by corporations
Explanation
Financial risk is most associated with the use of debt financing by corporations. Financial risk is the risk that a company won't be able to meet its obligations to pay back its debts. Which in turn could mean that potential investors will lose the money invested in the company. The more debt a company has, the higher the potential financial risk.
Therefore, B is the correct option.
Under the head Business or Profession, the method of accounting which an assessee can follow shall be ___________.
Report Question
0%
Mercantile system only
0%
Cash system only
0%
Mercantile or cash system only
0%
Hybrid system
Supplier's account will be ________ when goods are received on credit.
Report Question
0%
Debited
0%
Credited
0%
Closed
0%
None of these above
Explanation
When goods are received on credit then goods will increase so, debit the asset and liability will be credited so, creditor will credited.
The books to be compulsorily maintained by a company are ______________.
Report Question
0%
Cash book and ledger
0%
Sales and purchase book
0%
Journal
0%
All of the above
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.
Which of the following transactions will result in decrease in assets and decrease in liabilities?
Report Question
0%
Payment of a promissory note with cash
0%
Materials returned to supplier on account
0%
Redemption of debentures
0%
All of these
Explanation
1) Payment of promissory not with cash- liability and cash (assets) decreases.
2) Material return to supplier- Creditors (liability) and goods (assets) decreases
3) Redemption of debenture-Debenture (liability) and cash(assets) decreases.
Which of the following statements best explains the relationship between journal and ledger?
Report Question
0%
First recording in journal and then positing to ledger completes the double entry of the transaction
0%
The journal is the book of original entry, where as the ledger is the book of second entry
0%
The journal is the book for analytical record and ledger is the book for chronological record
0%
The process of recording, in the journal is called journalising, the process of recording in the ledger is called posting
Explanation
Book of original entry refers to journal where all the business transactions are recorded first in chronological order whereas ledger is a book which records all journal entries in individual ledger account.
The return of goods by the customer should be debited to _____________.
Report Question
0%
Customer A/c
0%
Sales return A/c
0%
Goods A/c
0%
Purchase return A/c
Explanation
Goods sold to the customer can be returned by the customer due to various reasons. This has to be recorded in books of account as sales return.
The accounting entry will be as under:
Sales return A/c Dr, (Real A/c- Debit what comes in)
To Customer A/c (Person a/c- Credit the giver)
The amount of salary paid to Suresh should be debited to _____________.
Report Question
0%
The account of Suresh
0%
Salaries a/c
0%
Cash a/c
0%
Bank a/c
Explanation
All expense and income accounts are classified as nominal account. Rule for nominal account describe that all expense and losses should be debited and all incomes and gains should be credited.
payment of salary to Suresh is an expense which need to be debited to salary account.
Accounting entry will be as under:
Salary Expense A/c Dr.
To Cash A/c
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Practice Class 11 Commerce Accountancy Quiz Questions and Answers
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