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CBSE Questions for Class 9 Elements Of Book Keeping And Accountancy Nature Of Accounts And Rules Of Debit And Credit Quiz 1 - MCQExams.com
CBSE
Class 9 Elements Of Book Keeping And Accountancy
Nature Of Accounts And Rules Of Debit And Credit
Quiz 1
An international reserve asset created by the IMF taking into account the global need to supplement existing reserves is called ______________.
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Quota
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International Monetary Right
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Special Drawing Rights
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None of the above
Bad debts written off is an example of ___________.
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Increase in Asset & Owner's Liability
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Decrease in Asset & Owner's Liability
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Increase in Liability & Owner's Liability
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Decrease in Liability & Increase in Owner's Liability
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Increase in Liability & Decrease in Owner's Liability
Explanation
Bad debts are debtors who have not made payments to the company.
Bad debts are expense so, there will be a decrease in capital and debtors is an asset which will be reduced.
Therefore,
Decrease in Asset & Owner's Liability.
The term 'Debt' is derived from Latin word_________.
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debere
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debonare
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debtor
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none of these
Explanation
When we want to express an obligation or responsibility, the word "deber" is used. Its a Spanish word which signifies as debt. Debts is considered to be a liability in the financial statement. Once a firm takes money from any money lender, this has to be classified as debt.
Debit means _________.
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Decrease in asset
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Increase in liability
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An entry on the left hand side of an account
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Moderate increase in liability
Explanation
Debit means left side. For e.g. every accounting entry will have a debit and credit amount. The debit amount is usually listed first and will be entered on the left side of the general ledger account indicated. The general ledger accounts will have both a debit and credit side, left and right side. The balance in a general ledger account will be either a debit balance or a credit balance.
Which one of the following is an example of personal account?
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Capital account
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Building account
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Cash account
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Investment account
Explanation
A personal account is an account for use by an individual for that person's own needs. Capital account is representing owner of the business, a person or organisation. Examples of personal account are: Debtors, creditors, banks, capital, drawing, outstanding/prepaid accounts.
The basic rule of book-keeping, debit the receiver and credit the giver is applicable to ________________.
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Nominal account
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Real account
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Personal account
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Drawing account
Explanation
The
rule
related to
Personal account
states debit the receiver and credit the giver. In other words, if a person receives something, receiver's
account
shall be debited and if a person gives something, giver's
account
shall be credited.
Any written document in support of a business transaction is called a ___________.
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Voucher
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Bill
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Carbon Copy
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Expense Bill
Explanation
Prudence concept of accounting defines that each of the accounting transaction must have prudent documents. Each business transaction must have a proper supporting. This documents are called as voucher.
How many sides does an account have?
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One
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Two
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Three
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Four
Explanation
After recording transactions in Journal, they are transferred to the ledger accounts. Ledger is known as a secondary book. Each account has two sides i.e. debit side and the credit side.
Insurance unexposed account is ________.
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Real Account
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Personal Account
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Nominal Account
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Representative Account
Explanation
This is like an advance payment of expenses against which services are not delivered. Till it expires, it should be considered as debit to personal account.
The process of recording financial transactions in the journal is called ___________.
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Journalizing
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Utilizing
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Posting
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Balancing
Explanation
All business transactions are to be first recorded in journal in chronological order. Process of recording the transaction is called journalizing.
Receipts and payments account is a _____________.
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Personal Account
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Nominal Account
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Real Account
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Representative Account
Explanation
“A receipt
and payment account is a summarized cash book for a given period”.This is a summary of the cash transactions as in the cash book”. Non-profit organizations prepare receipt and payment account at the end of the year. With the help of this account and some additional information, we prepare income and expenditure account to disclose the true results of non- profit
organizations.
So, the receipt and payment account is a real account.
Journal is known as book of _________ entry.
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Original
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Duplicate
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Personal
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Nominal
Explanation
Every business transaction must be recorded in books of account in chronological order. All transactions are first recorded in a book which is called journal.
Journal is called the book of original entry.
Insurance unexpired accounts is a _____________.
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Real account
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Personal account
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Nominal account
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None of these
Explanation
Unexpired insurance is an another term which is used for prepaid insurance. Prepaid insurance is deducted from the insurance premium expenses account in profit & loss account and shown in balance sheet as current assets.
For example, if an insurance premium of Rs.1200 is paid for the period from 1st July 2017 to 30th June 2018, an amount equal to Rs.300 (for 3 months , April, May,June 2018) is unexpired as it is not pertaining to the current financial year 2017-18.
Its a representative personal account. These accounts are not in the name of a specific person but are represented as personal account.
Identify which is the wrong rule?
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Nominal account - debit all expenses & losses
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Real account - credit what comes in
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Nominal account - credit all incomes & gains
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Personal account - debit the receiver
Explanation
Account can be classified in to three categories i.e. Personal account, real account and nominal account. All these accounts are governed by some basic rules which are called "Golden Rule" of accountancy.
Rule for real account is:
Debit what comes in
Credit what goes out
What comes in is to be debited, what goes out is to be credited?
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Rules of Personal
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Rules of Real
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Rules of Nominal
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All of these
Explanation
Accounts are classified as personal account, real account and nominal account. There are certain basic rule against each account. These are called golden rule of accountancy.
Rule for Real Account is:
Debit what comes in
Credit what goes out
Which of the following is not an example of real A/c?
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Machinery
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Building
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Cash
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Creditor
Explanation
Supplier of goods are called as creditors. The creditors are recorded as current liability in to the business.
Creditors are individual, firm or companies which are personal account and not the real account.
Provision for doubtful debts account is a ________.
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Asset
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Liability
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Income
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None of these
Explanation
Provision for doubtful debts is a liability for the business. it is shown under liability side of the balance sheet.
The amount for provision for doubtful debts changes every day as new provision made in the current year.
Bad debts for the current year are to subtracted from it, and an additional amount of provision is to be added in such provision for
doubtful debts account
.
Interest, rent, electricity bill are types of _______ account.
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Personal a/c
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Impersonal a/c
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Real a/c
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Nominal a/c
Explanation
Accounts are classifies as Personal Account, Real Account and Nominal Account.
All expense and income accounts are nominal accounts. Interest, rent, electricity, wages, salaries are expenses and are considered as nominal account. At the end of the financial year, all nominal accounts are transferred to trading and profit & loss account. None of the nominal account balance is carried over to the next financial year.
Jay account is a __________ account.
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Nominal account
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Personal account
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Real account
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Trading account
Explanation
There are three types of account, personal account, real account and nominal account.
Account which are related to the person are called as personal account. Real accounts are those which are not closed at the end of the financial year and the balance of these accounts are carried over to the next financial year. Accounts of expense and incomes are nominal account.
Jay is a person hence it is a personal account.
Salary account is by its nature a _________.
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Real Account
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Nominal Account
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Personal Account
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Trading Account
Explanation
Accounts are classified in three categories i.e. personal a/c, real a/c and nominal a/c. Account of any person is a personal account, the real account is an account which does not closed at the end of accounting year and the balances are carried over to the next year.
All expense account are nominal account. Salary account is an expense account and is a nominal account.
"Debit the receiver credit the giver"is the rule for _____________.
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Real account
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Personal account
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Nominal account
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None of these
Explanation
Account are classified in to three categories i.e. Personal Account, Real Account and Nominal Account. For every account there is rule. These are called golden rule of accountancy.
Rule for personal account is:
Debit the receiver
Credit the giver
The word 'Credit' means _________.
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What is
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What ought to be
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Due to that
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Due for that
Explanation
Credit is basically a trust in which one party gives money or resources to other party who does not reimburse the thing immediately but pays the same at future date. It also means due to that i.e. amount received.
Journal means _______________.
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A daily record of business transactions
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Book of original entry
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Both (A) and (B)
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Purchase book
Explanation
Journal has been derived from the french word 'jour' which means day. Journal is a book of original entry which records day to day transactons of a firm. It is the book where transactions are recorded for the first time. Hence, it is called book of original entry.
Outstanding salary account is a _______ account.
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Nominal account
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Real account
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Artificial person's account
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Representative personal account
Explanation
Outstanding expense are those expense which are due but not paid and to be added with the respective expenses head and shown as liability in the balance sheet.
Any amount which is due to a person against which the services are already provided for is an outstanding expense. These are personal account but put together clubbed and considered as representative person account.
A book containing a chronological record of business transaction & original record is called a _________.
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Journal
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Ledger
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Trial balance
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None of the above
Explanation
A journal is known as the original book of entry and is also called the prime entry. All the accounting transactions are first recorded in journal in the order of the transactions taking place. Such order is called a chronological order.
Therefore, journal is the original book of recording transactions in the chronological order.
Which of the following is usually in the 'T' format and contains two sides?
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Journal
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Account
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Ledger
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Subsidiary books
Explanation
An account is a record or statement of financial expenditure and receipts relating to a particular period or purpose. It consists of two sides. Right hand side is known as debit side which records all the payments and expenses whereas left hand side records all income recieved. It is in the form of 'T'.
Match List-I with List-II and select the correct answer using the codes given the lists:
List-I(Types of accounts)
List-II(Principles)
I. Real Accounts
(a) Debit the receiver credit the giver
II. Nominal Accounts
(b) Debit what comes in credit what goes out
III. Personal Accounts
(c) Debit all expenses,losses credit all incomes,gains
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I-(c), II-(b), III-(a)
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I-(a), II-(c), III-(b)
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I-(b), II-(c), III-(a)
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I-(a), II-(b), III-(c)
Explanation
There are mainly three types of accounts: Real, Personal and Nominal accounts. Personal accounts are classified into three subcategories: Artificial, Natural and Representative.
Real Accounts: All assets of a firm, which are tangible or intangible, fall under the category "Real Accounts". tangible real accounts are related to things that can be touched and felt physically. whereas, intangible real accounts are related to things that can't be touched and felt physically. The golden rule of real accounts is: Debit what comes in; Credit what goes out.
Personal accounts: These accounts are related to individuals, firms, companies, etc. A few example of personal accounts include debtors, creditors, banks, outstanding/prepaid accounts, accounts of credit customers, accounts of goods suppliers, capital, drawings, etc. The golden rule of personal accounts is: Debit the receiver; Credit the giver.
Nominal accounts: Accounts which are related to expenses, losses, incomes or gains are called Nominal accounts. The dictionary meaning of the word "nominal" is "existing in name only" and the meaning remains absolutely true in accounting sense too, because nominal accounts so not really exist in physical form, but behind every nominal account money is involved. E.g. Purchase A/C, Salary A/c, Sales A/C, etc. The golden rule for nominal accounts is:Debit all expenses and losses; Credit all incomes and gains.
The word 'Debit' means __________.
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Due to that
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Due for that
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'What is'
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What ought to be
Explanation
Debit is an expense or an amount of money paid from an account which results in the increase or a decrease in a liability or owner's equity on the balance sheet. It is listed on the left hand side of the account. It also means due for that i.e. due for the amount paid.
Journal is a book of ____________.
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Primary entry
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Original entry
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Duplicate entry
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Primary or original entry
Explanation
Journal has been derived from the french word 'jour' which means day. Journal is a book of original entry which records day to day transactons of a firm. It is the book where transactions are recorded for the first time. Hence, it is called book of original entry or prime entry.
Small firms may adopt _________.
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The subsidiary book system
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Journal system
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Ledger
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None of these
Explanation
Recording of transactions helps to make the financial statement accurate. Recording of transaction in journal helps small firms to keep their track of transactions upto date. Hence small firms may adopt the journal system.
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Practice Class 9 Elements Of Book Keeping And Accountancy Quiz Questions and Answers
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