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CBSE Questions for Class 11 Commerce Accountancy Recording Of Transactions - Ii Quiz 4 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Recording Of Transactions - Ii
Quiz 4
Entry for bad debts is recorded in the ______.
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0%
Sales book
0%
Purchase book
0%
Cashbook
0%
Journal proper
Explanation
A book maintained to record transactions, which do not find place in special journals, is known as Journal Proper or Journal residual.
Bad debts are accounts receivable that a company does not expect to collect and has written off to income statement as an expense, Bad debts are also called irrecoverable debts. Entry for bad debts is recorded in the Journal Proper.
The following transactions are recorded in the journal:
1. Opening entries
2. Adjustment entries
3. Rectification entries
4. Transfer entries
5. Other entries
Additional cash introduced in business is recorded in ______.
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Purchase book
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Cash book
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Journal proper
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Return inward book
Explanation
Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period.
When a cash book is maintained, transactions of cash are not recorded in the journal, and no separate account for cash or bank is required in the ledger. Any additional cash introduced in the business is also recorded in the cash book.
Credit transactions are never recorded in cash book.
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True
0%
False
Explanation
Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period. Generally, it is made on monthly basis. This is a very popular book and is maintained by all organisations, big or small, profit or not-for-profit. It serves the purpose of both the journal as well as the ledger account. It is also called the book of original entry.
A cash book records the transactions related to cash receipts and cash payments. Thus, it records only those transactions that involve cash inflows or outflows. Credit transactions are not recorded in the cash book as it does not involve any cash inflows or outflows.
Cash discount allowed is recorded on the debit side of cash book.
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0%
True
0%
False
Explanation
Explanation:
Discount allowed by a seller is a loss, since he is receiving lesser amount than what he could have received without allowing discount.
Hence, at the time of receiving the payment, discount allowed is recorded in the 'Discount' column on the debit side (or receipts side) of the Double Column Cash Book (with cash and discount columns).
This statement also holds valid in case of Triple Column Cash Book (with cash, discount and bank columns).
Petty cash vouchers are used to record entries on the debit side of the petty cash book.
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True
0%
False
Explanation
To record transactions in petty cash book, petty cash vouchers are used.
Only withdrawal slip is used by the account holder for withdrawal of cash from the bank.
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True
0%
False
Explanation
The statement "Only withdrawal slip is used by the account holder for withdrawal of cash bank", is false, as money can be withdrawn from a bank either through a withdrawal slip or a cheque. In fact, a bearer cheque is just like a withdrawal slip, as any person possessing the cheque will be paid when he/she deposits in a bank. Thus, it is not necessary that only a withdrawal slip can be used to withdraw money from a bank.
Goods returned to suppliers should be accompanied by __________.
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Bill
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Cash Memo
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Debit note
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Credit note
Explanation
A Debit note is a document evidencing a debit to be raised against a party for reasons other than the sale on credit. On finding that goods supplied are not as per the terms of the order placed, the defective goods are returned to the supplier of the goods and a note is prepared to debit the supplier; or when an additional sum is recoverable from a customer such a note is prepared to debit the customer with the additional dues.
In these two situations the note raised is called as a debit note.
When cheque is issued to an outside party it is recorded on the credit side of the cash book in the bank column.
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True
0%
False
Explanation
.
Contra entry does not appear on both the sides of the three column cash book.
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True
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False
Explanation
Transactions recorded in three column cash book relates to both cash and bank account (i.e. balance of one will decrease and other will increase). Such transactions are entered on both sides of the cash book and are known as Contra Entry. These types of entries require no further posting in any other account. Such entries are marked in the cash book with the letter "C" in the folio column to indicate that these are contra transactions and no further posting is required for them.
Accounting entries in the Return Inward book are recorded on the basis of a debit note.
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True
0%
False
Explanation
Accounting entries in a return inward book are recorded on the basis of a credit note. A credit note is a letter sent by the supplier to the customer notifying the customer that he or she has been credited a certain amount due to an error in the original invoice or other reasons.
When total of Debit side of an account is more than total of Credit side of an account it is ____________.
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Debit balance
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Credit balance
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Zero balance
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None of these
Explanation
Balancing of an account means ascertaining the net effect of the transactions, i.e. the difference between the debit side and credit side of the ledger account.
When the total of debit side of an account is more than the total of the credit side of that account, then the balancing figure is termed as debit balance.
Closing balance of cash book is _____________ balance.
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Debit
0%
Credit
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Zero
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Either (A) or (C)
Explanation
Total of the debit side of the cash book or cash A/c always exceeds its credit side because payments of a business cannot exceed the receipts amount. So, the cash book shows debit balance. When payments are exactly equal to the receipt of the business, it will show zero balance, but it can never show the credit balance. Thus, the cash book will always show debit balance or zero balance.
Credit note is prepared by the supplier.
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True
0%
False
Explanation
A credit note is a letter sent by the supplier to the customer notifying the customer that he or she has been credited a certain amount due to an error in the original invoice. Or in other words, a receipt given by a shop to a customer who has returned goods, which can be offset against future purchases.
A debit note is prepared by the seller.
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0%
True
0%
False
Explanation
A debit note
is a document used by a
vendor/Seller
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.
On the basis of receipt voucher, the debit side of cash book is written up.
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True
0%
False
Explanation
No entry shall be prepared for opening balance of
cash
. It will simply be shown in
debit side of cash book
.
Note: All payment
Vouchers
shall be
written
in payment
side of cash book
and receipt
vouchers
shall be
written
in receipt
side of cash book
.
Purchase Returns Account shows ______________.
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Debit balance
0%
Credit balance
0%
Zero balance
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None of these
Explanation
A purchase return account shows the credit balance. Purchase return represents the amount of goods returned to the supplier.
When goods are bought from a supplier, the purchases A/c will be debited and when the goods are returned, the purchase return A/c will be credited as stock is reduced.
Thus, purchase return A/c shows the credit balance.
Accounting entries in the Return outward book are recorded on the basis of credit note.
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True
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False
Explanation
When goods are returned, a debit note is prepared and is sent to the supplier with the returned goods.
An original copy is sent to the supplier, informing him of the amount for which his account has been debited on account of the returned goods.
A duplicate copy of the debit note becomes the source document, on the basis of which entries are recorded in the purchase return book.
Thus a debit note is required for recording the transactions in the purchase return book.
Debtors Account shows _________ balance.
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0%
debit
0%
credit
0%
nominal
0%
real
Explanation
Debtor represents the amount of the business that is owed by them.
Debtor are the assets of a firm and all the assets represents debit balance. Thus, the Debtor A/c also shows debit balance.
Over casting of sales day book will lead to
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Over statement of profit
0%
Under statement of profit
0%
Over statement of sundry debtors
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None
Explanation
Over casting of sales day book will result in increase in the sales. Increase in the sales will lead to the over statement of the profits.
Therefore, A is the correct option.
When the total of debit side of an A/c exceeds credit side, it is called ______ balance.
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0%
Debit
0%
Credit
0%
Nil
0%
Real
Explanation
Accounts in the ledger are periodically balances, generally at the end of the accounting period, with the object of ascertaining the net position of each amount.
Balancing of an account means that the two sides are summed up and the difference between them is shown on the side, which is shorter in order to make their totals equal.
In case, the debit side exceeds the credit side of an account, the difference is written on the credit side and is called as debit balance.
If the credit side exceeds the debit side, the difference between the two appears on the debit side and is called as credit balance.
Purchases accounts always shows __________ balance.
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0%
debit
0%
credit
0%
negative
0%
none of these
Explanation
Purchase account is a part of trading A/c and shows the amount of goods purchased for a business by a trader for resale.
Hence, Purchases account always show debit balance.
when the debit side of the ledger account exceeds the credit side, the balancing figure is termed as Debit balance.
All the assets expenses and losses show Debit balance.
Excess of credit side total of an account over its debit total ______________.
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Debit Balance
0%
Credit Balance
0%
Zero Balance
0%
None of these
Explanation
When credit side of the ledger account exceeds the debit side, then the balancing figure is termed as Credit balance. All liabilities, income and gains and capital show Credit balance.
Carried down (c/d) balance indicates ________ balance.
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Opening
0%
Real
0%
Nominal
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Closing
Explanation
Opening journal entry is passed to bring the previous year's closing balances of assets and liabilities to the current year. Ledger accounts are categorized as assets, liabilities, capital, revenue and expenses.
The first three of them, i.e., assets, liabilities and capital accounts have certain closing balance at the end of accounting period, so their values are to be carried forward to the next accounting period.
This is why they are closed as 'By Balance c/d' or 'To Balance c/d. 'Balance c/d shows the closing balance of the account. Carried down (c/d) can be written on both at the debit and credit side, while closing personal and real accounts, c/d here means carried down to the next period.
Capital Account shows _____________.
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Debit balance
0%
Credit balance
0%
Zero balance
0%
None of these
Explanation
When credit side of the ledger account exceeds the debit side, then the balancing figure is termed as credit balance. All liabilities, income and gains and capital shows credit balance.
Cash Account always shows _______ balance.
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0%
Debit
0%
Credit
0%
Negative
0%
Minus
Explanation
Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with the cash or bank balances at the beginning of the period. Generally, it is made on monthly basis.
This is a very popular book and is maintained by all the organisation, big or small, profit or not-for-profit. On the left side, all cash transactions relating to cash receipts (debits) and on the right side all transactions relating to cash payments (credits) are entered date-wise.
When a cash book is maintained, a separate cash book in the ledger is not opened. The cash book is balanced in the same way as an account in the ledger.
Hence,Cash account will always show a debit balance because cash payments can never exceed cash receipts and cash in hand at the beginning of the period.
Machinery Account shows _______ balance.
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Credit
0%
Debit
0%
Both A and B
0%
None of these
Explanation
Machinery A/c shows debit balance.
It is a real account because these accounts include all the assets of the business whose value can be measured in terms of money.
Thus, all the assets of the business are recorded following the rule of real accounts, i.e. "Debit what comes in" and "Credit what goes out".
Sales account always shows _________ balance.
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0%
debit
0%
credit
0%
positive
0%
negative
Explanation
Sales account reflects the amount of revenue earned by the sale of goods/services of a business. Thus, it is an income for the business and according to the rule of accounting, all incomes are to be credited and all expenses are to be debited. Thus, a sale account always show credit balance.
Total of sales book is ________ to sales accounts.
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Entered
0%
Moved
0%
Posted
0%
Given
Explanation
All credit sales of merchandise are recorded in the sales book and cash sales are recorded in the cash book.
The date of sale, invoice number, name of the customer and the amount of the invoice are recorded in the sales book. Other details about the sales transaction including terms of payment are available in the invoice.
The book keeper makes entries in the sales book from one copy of the sales invoice. Finally total of sales book is posted to sales accounts.
Bad debts reserve account always shows ________ balance.
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Credit
0%
Debit
0%
Zero
0%
Positive
Explanation
The bad debt reserve is a provision for the estimated amount of bad debt that is likely to arise from existing account receivable. A bad debt reserve is a contra account, which is designed to offset the receivables account with which it is prepared. The receivables account has a natural debit balance, while the bad debt reserve has a natural credit balance.
An account has a credit balance,if the total of credit side is greater than the total debit side.
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0%
True
0%
False
Explanation
When the credit side of ledger account exceeds the debit side, then the balancing figure is termed as credit balance. All Liabilities, Incomes, and gains and Capital show credit balance.
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Practice Class 11 Commerce Accountancy Quiz Questions and Answers
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