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CBSE Questions for Class 11 Commerce Accountancy Recording Of Transactions - Ii Quiz 5 - MCQExams.com
CBSE
Class 11 Commerce Accountancy
Recording Of Transactions - Ii
Quiz 5
Accounts of an entity are closed down at the end of the accounting year.
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0%
True
0%
False
Explanation
Accounting year is a period of 12 months which is different from the calendar year. All the books of accounts of an entity are prepared for an accounting year and closed at the end of an accounting year.
Ledger posting is not necessary for journal proper.
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True
0%
False
Explanation
A journal proper is the residual book that records all the transactions that cannot be recorded in any other subsidiary book.
For example, if machinery is purchased on credit, it can neither be recorded in the cash book nor the purchase book.
The reason is that the cash book only records cash transactions and the purchase book records only credit purchase of goods and not the purchase of assets.
Therefore, purchase of machinery on credit will be recorded in the journal proper. Once the entry is recorded in the journal proper, it will be posted in the respective ledger accounts.
Payment of rent is debited to cash A/c.
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0%
True
0%
False
Explanation
Rent paid is an expense. Thus, it is a nominal account. The rule for the nominal account is debit all expenses and losses and credit all incomes and gains. So, we debit the Rent A/c.
Cash is a real account. The rule for Real account is debit what comes in and credit what goes out. Thus, cash is going out and so will be credited.
Therefore, payment of rent will be credited to Cash account.
The correct option is B.
State whether the following statements are True or False.
Capital Account rarely shows debit balance.
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True
0%
False
Explanation
A capital account shows credit balance. It represents the amount owed by a business to the owner of the business. Thus, it is a liability for the business. All the liabilities represents the credit balance. Hence, Capital A/c represents the credit balance.
An account has a debit balance if the total of credit side is greater than the total of debit side.
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0%
True
0%
False
Explanation
Balancing of an account means ascertaining the net effect of the transaction, i.e. the difference between the debit and credit side of the ledger account.
Thus, 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.
The features of journal and ledger are found together in cash book.
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0%
True
0%
False
Explanation
A cash book is a book of prime entry as well as of secondary entry. In other words, it is a subsidiary book as well as a ledger. When an organisation maintains the subsidiary books, it records all the transaction related to cash, bank and discount only in the Cashbook. Later, they are posted to the individual ledger accounts from there. However, when we balance a Cashbook we get to know the balance of cash, bank, discount allowed and discount received. Thus, we do not need to prepare a separate ledger account.
Thus, the correct answer is A.
An additional information provided below the Trial balance is known as ________.
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Information
0%
Adjustments
0%
Rectification
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Closing
Explanation
The additional information that is provided after the completion of the trial balance are known as adjustments.
Sometimes, When financial statements are prepared, some items are either not recorded in the books. Hence, financial statements do not depict the true and fair view of the financial position of the business.
Thus, in order to get a clear financial picture, these adjustments are provided as additional information and entries passed for such transactions are called adjusting entries.
Excess of debit side total of an account over its credit side total is called _____.
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Debit Balance
0%
Credit Balance
0%
Equal Balance
0%
Nil Balance
Explanation
Accounts in the ledger are periodically balanced, generally at the end of the accounting period, with object of ascertaining the net position of each amount. Balancing of an account means that the two sides are totaled and the difference between them is shown on the side, which is shorter in order to make their totals equal.
The words 'balance c/d' are written against the amount of the difference between the two sides. The amount of balance is brought (b/d) down in the next accounting period indicating that it is a continuing account, till finally settled or closed.
In case, the debit side exceeds the credit side, 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 credit balance.
When cheque is ___________ into bank, cash book is debited.
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0%
Issued
0%
Deposited
0%
Dishonoured
0%
Bounced
Explanation
When cheque is deposited in Bank the entry for the same is as follows :
Cash/Bank A/c. ........................... Dr.
To Sundry receivables A/c.
So, when a cheque is deposited into Bank the bank balance in the cash book would increase and as the cash book shows a debit balance, the cash book is to be debited which is evidently clear from the above journal entry
Select the most appropriate alternative from those given below:
Reserve for discount on debtor has a _______ balance.
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credit
0%
debit
0%
nil
0%
positive
Explanation
All the reserves and provisions are made out of profit. Profit being a nominal account has a credit balance. Therefore, all the reserves and provisions also have a credit balance.
Reserve for discount on debtors is made in order to make a provision to allow discount to the debtors on payment. Discount on debtors is an expense and thus the business provides for it in advance.
The entry is:
Profit and Loss A/c............Dr.
To Reserve for discount on debtors A/c.
Thus, the correct option is A.
Cash Book is a_______book.
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principal book
0%
subsidiary book as well as principal book
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kaccha book
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ledger itself
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 organizations, big or small, profit or not-for-profit. It serves the purpose of both journals as well as ledger (cash) account. It is a subsidiary book and also called a book of original entry/principal book. 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.
State whether the following statement are True or False.
Purchase account always shows debit balance.
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True
0%
False
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, Purchase A/c always shows debit balance.
On the debit side of cash book/account______are shown.
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0%
Capital receipts
0%
Revenue receipts
0%
All types of receipts
0%
Cash payment
Explanation
Cash Book
is a
subsidiary book
that records all the
cash transactions
whether it is revenue in nature or capital in nature. All the
capital and revenue receipts and payments
are recorded in the cash book.
Cash Book serves the purpose of both
Journal and ledger
. There is no need to prepare a cash account if the cash book is being maintained.
There are two sides to the Cash Book.
The Debit side of the Cash Book is known as the
Receipts side
whereas the credit side is known as the
Payment side
.
Therefore, On the debit side of the cash book/account, all types of receipts are shown.
_________ may be defined as the record of transaction concerning cash receipts and cash payment.
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0%
Cash book
0%
Bank book
0%
General journal
0%
None of the above
Explanation
Cash book is a book in which all transactions relating to cash receipts and cash payments are recorded. It starts with cash or bank valances 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 journal as well as the ledger (cash) account. It is also called the book of original entry.
When a cash book is maintained, transactions of cash are not recorded in the journal, and no separate account for cash and bank is required in the ledger.
_______ does not have any debit side.
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Sales a/c
0%
Sales day book
0%
Cash account
0%
Bank a/c
Explanation
The sales day book is a manually-maintained ledger in which is recorded the key detailed information for each individual credit sale to a customer. The daily total of the sales listed in the sales day book is then transferred into the sales ledger. Thus, the most detailed redecoration of credit sales is the sales day book, with only daily totals of credit sales appearing in the sales ledger.
The cash book records only________.
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All cash receipts
0%
All cash payments
0%
Both (A) and (B)
0%
Only cash and credit sale of goods
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 a 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 journal as well as the ledger (cash) account. It is also called the book of original entry.
When a cashbook is maintained, transactions of cash are not recorded in the journal, and no separate account for cash or bank is required in the ledger.
Rectification entries are passed in __________.
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0%
Ledger
0%
Balance sheet
0%
Cash book
0%
Journal proper
Explanation
All those transactions that cannot be recorded in any other subsidiary books are recorded in the journal proper. Thus, rectification entries are passed in the journal proper. Following transactions are recorded in the journal proper:
1. Opening entries
2. Closing entries
3. Transfer entries
4. Adjustment entries
5. Rectification entries
6. Miscellaneous entries
_______ column of cash book can have credit opening or closing balance.
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0%
Cash
0%
Discount
0%
Bank
0%
(B) and (C)
Explanation
The bank column is balanced in the same way as the cash column.
However, in the bank column, there can be credit balance also because of overdraft taken from the bank. Overdraft is a situation when cash withdrawn from the bank exceeds the amount of deposit. Entries in respect of cheque received should be made in the bank column of the cash book. Bank column of cash book can have a credit opening or closing balance.
_________column of cash book is never balanced.
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0%
Discount
0%
Cash
0%
Bank
0%
None
Explanation
In a Triple column cash book, we have cash, bank and discount columns. The discount column on the debit side is the discount allowed which is an expense. Whereas the discount column on the credit side is the discount received which is an income.
Thus, the discounts columns are never balanced as they both have a different nature. However, cash and bank columns are always balanced.
Thus, the correct option is A.
The closing balance of the petty cash book is_______.
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Expense/expenditure
0%
Profit/ gain
0%
Assets
0%
Liability
Explanation
The closing balance of petty cash book is considered as Asset.
Petty Cash is a current asset account; it is part of a company's cash.
Petty cash Book
is just like a
cash book
, its just that this
book
maintains
petty cash
expenses separately as against the normal
cash book
.
Therefore,
balance of petty cash book
is an
asset
& an not
income
. Its used for paying out
petty
expenses.
On the credit side of cash book/account______are shown.
Report Question
0%
Capital Receipts
0%
Revenue Receipts
0%
All types of Payments
0%
Cash Payment
Explanation
Cash Book is divided into two side -
1. Debit Side
(also known as the
Receipts Side
) ; When there is increase in cash then it is recorded in Debit Side because Debit is All increase in assets.
2. Credit Side
(Also Known as the
Payments Side
) :
When there is decrease in cash then it is recorded in credit Side because credit is All decrease in assets.
Therefore, on the credit side of cash book/account all types of payments are shown.
_________column of a cash book cannot have credit closing balance.
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0%
Cash column
0%
Discount column
0%
Bank column
0%
All of three
Explanation
Cash column of a cash book cannot have credit closing balance as cash can not be negative.
Either the business will have some cash or there will be no cash. But it can not be negative.
Therefore, cash account has either debit balance or Zero balance.
In petty cash book________column records receipts.
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extreme left hand
0%
extreme right hand
0%
centre column left hand side
0%
centre column right hand side
Explanation
In petty cash book extreme left hand column records receipts.
Cheques received but not banked is generally shown in__________column of Cash Book.
Report Question
0%
Cash
0%
Discount
0%
Bank
0%
None
Explanation
If the cheque is not deposited into the bank then it is assumed as
cash
therefore, it will be recorded in the
cash column of the cash book
.
But if the same cheque is deposited into the bank on the same day then it will be recorded in the Bank Column of the Cash Book.
Cash account/ book is prepared on ________.
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Accrual Basis
0%
Receipt Basis
0%
Both Basis
0%
Either A or B
Explanation
Cash book prepared on receipt basis that it a transaction is recorded as when there is an inflow or outflow of cash
There are mainly 4 types of Cash Book
1. Single Column Cash Book
2. Double Column Cash Book
3. Three Column Cash Book
4. Petty Cash Book
_________ is/are forms of a cash book.
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0%
Single column cash book
0%
Double
column cash book
0%
Three
column cash book
0%
All of the above
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. It serves the purpose of both journal as well as ledger account.
It is also called the book of original entry.
Single column cash book, Double column cash book and Three column cash book are all forms of a cash book.
_______does not exist in the three column cash book.
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Cash Column
0%
Bank Column
0%
Petty Cash Column
0%
Discount Column
Explanation
There is no column as petty Cash column in three column cash book.
Rent for the month of May received in advance in the month of April will appear on__________________.
Report Question
0%
payment side (credit) of cash book
0%
receipt side (debit) cash book
0%
No entry
0%
prepaid rent a/c
Explanation
Rent for the month of May received in advance in the month of April will appear on Cash Book.
As cash is received in the form of rent money, therefore, it will be recorded on the debit side of the cash book. Debit side of the cash book is also known as the receipt side.
Purchase day book records _____.
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0%
only cash purchase of trading goods
0%
only credit purchase of trading goods
0%
both a and b
0%
all types of purchases including purchase of capital goods
Explanation
Purchase day book is a subsidiary book. All credit purchases are to be recorded in purchase day book in chronological order.
Goods worth Rs.45,000 purchased from Lalit on credit will be recorded in_______.
Report Question
0%
Cash book
0%
Purchase journal
0%
Journal book
0%
Stock register
Explanation
A purchase journal is a subsidiary-level journal in which information is stored about purchasing transactions.
Any transaction entered into the purchases journal involves a credit to the accounts payable account and debit to the expense or asset account to which a purchase relates.
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Practice Class 11 Commerce Accountancy Quiz Questions and Answers
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