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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 10 - MCQExams.com
CBSE
Class 9 Elements Of Book Keeping And Accountancy
Nature Of Accounts And Rules Of Debit And Credit
Quiz 10
A cash receipt may cause ___________.
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0%
Increase in liability
0%
Decrease in other asset
0%
Reduction in one asset and increase in other asset
0%
All of the above
Explanation
An amount of money received by a company for goods or services, is called as cash receipts.
Following are the results of cash receipts:-
Increase in liability, reduction in one asset and increase in other asset, decrease in other asset etc.
Accounts are broadly classified into ______.
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Real
0%
Personal
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Nominal
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All of the above
Explanation
Accounts are classified in personal, real and nominal account depending upon the nature of account. All these three account have their own rule for recording the transaction. Ram's account is a personal account, Goods account is a real account and any expenses account is a nominal account.
ABC Ltd. acquired a new Machine for Rs. $$500,000$$ on $$1$$st April $$2013$$ and spent Rs. $$10,000$$ on its installation and Rs. $$5,000$$ on transportation. The useful life of the machine is estimated $$10$$ years. The firm provides depreciation using sum of years digit method. what is the depreciation for the year $$2013-14$$.
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Rs. $$93,636$$
0%
Rs. $$89,100$$
0%
Rs. $$75,908$$
0%
Rs. $$1,01,300$$
Explanation
Depreciation expense is calculated under sum of year's digit method as:
Depreciation expense = (Remaining useful life of the asset / Sum of the year's digit) x Depreciable cost
Depreciable cost = Purchase cost + Installation cost +
Transportation
Depreciable cost = Rs. 5,00,000 + Rs. 10,000 + Rs. 5,000 = Rs. 5,15,000
Year
Deprecation base (a)
Remaining life (b)
Depreciation fraction (b/sum)
Depreciation expense
Book value
1
5,15,000
10
10/55
93,636
4,21,364
2
5,15,000
9
9/55
84,273
4,30,727
3
5,15,000
8
8/55
74,909
4,40,091
4
5,15,000
7
7/55
65,545
4,49,455
5
5,15,000
6
6/55
56,182
4,58,818
6
5,15,000
5
5/55
46,818
4,68,182
7
5,15,000
4
4/55
37,455
4,77,545
8
5,15,000
3
3/55
28,091
4,86,909
9
5,15,000
2
2/55
18,727
4,96,273
10
5,15,000
1
1/55
9,364
5,05,636
Total
55
Rent account is a ___________.
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0%
personal account
0%
real account
0%
nominal account
0%
none of the above
Explanation
Accounts relating to income, revenue, gain, expenses and losses are termed as nominal accounts. These accounts are also known as fictitious accounts as they do not represent any tangible asset. A separate account is maintained for each head or expense or loss and gain or income. Rent account is a nominal account. Other examples of nominal accounts are wages account, commission account, interest received account. The rule for nominal accounts is: Debit all expenses and losses; Credit all incomes and gains.
Journal is also called ______.
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Subsidiary book
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Daily event book
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History sheet
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Log book
Explanation
Journal is called as subsidiary books because it does not give any summarized details about an account. Journal merely helps the posting of entries in to ledger.
For real a/c debit means _____.
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0%
Addition
0%
Reduction
0%
Consumption
0%
Exhaustion
Explanation
Golden rule of accounting for real account is.
Debit what comes in i.e. addition
Credit what goes out i.e. reduction
For Eg : if goods worth Rs.500 purchased that will have addition in goods account.
Stock valued at Rs. $$20,000$$ sold for cash at Rs. $$24,000$$ would cause ____________________.
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0%
decrease in current assets by Rs. $$20,000$$
0%
Increase in owners equity and total assets by Rs. $$4,000$$
0%
increase in debtors by Rs. $$24,000$$
0%
none of these
Explanation
Value of stock = Rs. 20,000; Sale price of stock = Rs. 24,000
therefore gain on sale of stock =
Sale price of stock -
Value of stock
gain on sale of stock = Rs. 24,000 - Rs. 20,000
gain on sale of stock = Rs. 4,000
Gain on sale of stock will result in increase in the net profit which ultimately increases owner's equity and total assets.
ABC Ltd. acquired a new Machine for Rs. $$500,000$$ on $$1$$st April $$2012$$ and spent Rs. $$10,000$$ on its installation and Rs. $$5,000$$ on transportation. The useful life of the machine is estimated $$10$$ years. The firm provides depreciation using sum of years digit method. what is the depreciation for the year $$2013-14$$.
Report Question
0%
Rs. $$93,636$$
0%
Rs. $$89,100$$
0%
Rs. $$84,272$$
0%
Rs. $$91,300$$
Explanation
Depreciation expense is calculated under sum of year's digit method as:
Depreciation expense = (Remaining useful life of the asset / Sum of the year's digit) x Depreciable cost
Depreciable cost = Purchase cost + Installation cost +
Transportation
Depreciable cost = Rs. 5,00,000 + Rs. 10,000 + Rs. 5,000 = Rs. 5,15,000
Year
Deprecation base (a)
Remaining life (b)
Depreciation fraction (b/sum)
Depreciation expense
Book value
1
5,15,000
10
10/55
93,636
4,21,364
2
5,15,000
9
9/55
84,273*
4,30,727
3
5,15,000
8
8/55
74,909
4,40,091
4
5,15,000
7
7/55
65,545
4,49,455
5
5,15,000
6
6/55
56,182
4,58,818
6
5,15,000
5
5/55
46,818
4,68,182
7
5,15,000
4
4/55
37,455
4,77,545
8
5,15,000
3
3/55
28,091
4,86,909
9
5,15,000
2
2/55
18,727
4,96,273
10
5,15,000
1
1/55
9,364
5,05,636
Total
55
Amount vary by Rs. 1 due to rounding.
Received Rs 1100 from M/s Manoj against the outstanding debt of Rs 1100 due from him. The nature of entry to record this transaction is _______.
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Compound entry
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Simple entry
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Contra entry
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Complex
Explanation
There are only two accounts involved i.e. Manoj and Cash. Hence, a simple accounting entry will be passed in books of account.
Which of these are the advantages of the subsidiary books?
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Division of work
0%
Specialization and efficiency
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Saving of time
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All the three
Explanation
Subsidiary books are used when specific transactions are recorded in specific books at the first instance.
It includes purchase book, sales book, returns books etc. specifically to record these specific transaction. Hence it divides the work, facilitates specialization with effectiveness and also saves the time. All entries are recorded in chronological order in the respective books.
Another term used for recording a business transaction is ___________.
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Journalizing
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Vouching
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Ledger posting
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Consolidation
Explanation
Every business transaction must first be recorded in journal. Hence all original entries are found in journal itself which is a subsidiary books. Recording a transaction is also known as journalizing.
Journalising process is in __________.
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Analytical manner
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Summarized manner
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Chronological order
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None of the above.
Explanation
All business transaction must be recorded as soon it occur.
Hence, every entry will be passed in a chronological order in journal.
Accounts recording transactions with a person or group of persons are known _____________.
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Personal accounts
0%
Real accounts
0%
Nominal accounts
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Impersonal accounts
Explanation
There are mainly three types of accounts: Real, Personal and Nominal accounts. Personal accounts are classified into three subcategories: Artificial, Natural, and Representative. Personal accounts are related to individuals, firms, companies, etc.
A few examples 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.
A voucher refers to a/an __________.
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invoice received from suppliers
0%
document in support of an entry made in the books of account
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receipt issued to a customer for cash received
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all the above
Explanation
For each of the business transaction, a physical documents need to be attached with the books of account as proof of evidence of the transaction. Such document is called as voucher.
There are various kinds of vouchers for each of the business transaction:
Invoice received from suppliers against the purchase of goods.
Cash receipts issued to customer against cash received
Expenses voucher to support the expense amount.
Which of the following would prevent double payment of the same voucher?
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The person signing the cheque should cancel the supporting documents.
0%
Cheques should be signed by at best two persons.
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The data of payment of vouchers of similar nature should be the same of close to each other.
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All of the above.
Explanation
To prevent the double payment of a voucher, a process of affixing a stamp "PAID" has to be followed or voucher need to be cancelled/crossed to notify that the payment against this voucher is already done.
If the premium is paid on the life policy of the proprietor of the business, it is _____________.
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0%
treated as the drawings and is shown by way of deduction from the capital account
0%
taken to the Trading Account
0%
taken to the Profit and Loss Account and is shown as an expense
0%
taken to the Balance Sheet and is shown as an asset
Explanation
Separate entity concept of accounting defines that owner and business are considered two separate legal entity in the eye of law.
If any amount is contributed by by the owner in the business is treated as capital and to be shown as liability.
If any amount is withdrawn by the proprietor for personal use, this will be treated as drawings and to be deducted from the capital. Life Insurance premium is a personal expense and to be recorded as drawings.
Goods withdrawn by owner for personal use is an example of __________.
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0%
No change in Owner's Equity
0%
Increase in Asset & Owner's Equity
0%
Decrease in Liability & Owner's Equity
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None of these
Explanation
The effect of Goods withdrawn by owner for personal use
Goods will be reduced which implies decrease in Assets
as it is withdrawn for personal use by owner which will result in decrease in capital.
Therefore, there is decrease in asset and capital.
The rule for nominal accounts is ____________.
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debit the receiver, credit the giver
0%
debit what comes in, credit what goes out
0%
debit all expenses and losses, credit all incomes and gains
0%
all of the above
Explanation
Accounts relating to income, revenue, gain, expenses and losses are termed as nominal accounts. These accounts are also known as fictitious accounts as they do not represent any tangible asset. A separate account is maintained for each head or expense or loss and gain or income. Wages account, Rent account, Commission account are some examples of nominal accounts.
The rule for nominal accounts is: Debit all expenses and losses; Credit all incomes and gains.
A second-hand car is purchased for Rs. 80,000, the amount of Rs. 1,000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs.
1,500 is paid as dealers commission. The amount debited to car account will be __________.
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0%
Rs. 81,000
0%
Rs. 81,500
0%
Rs. 80,000
0%
Rs. 83,000
Explanation
second hand car Rs.80000
add : repairs charges Rs.1000
add : registration charges Rs. 500
add : dealers charges Rs. 1500
so, the amount debited to car account will be Rs.83000
Income earned which is yet to be received results in _________________.
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0%
Increases in capital and increase in liability
0%
Decrease in liability and increase in capital
0%
Increase in asset and increase in liability
0%
Increase in capital and increase in asset.
Explanation
Accrued Income is income that is earned but not received in cash by the organisation. Accrued Income is an asset.
Here, accrued income will be increase which is an asset and income will be added to the capital account. Therefore, there will be an
increase in capital and an increase in the asset.
Cash withdrawn by owner personal for use is an example of _________.
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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
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Increase in Liability & Decrease in Owner's liability
Explanation
Here, Cash is an Asset and it is being withdrawn which will result in a decrease in capital and assets.
Therefore, Cash withdrawn by the owner personal for use is an example of a
Decrease in Asset & Owner's liability.
Bank account is a ________.
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0%
Real account
0%
Personal account
0%
Nominal account
0%
Valuation account
Explanation
Accounts recording transactions with a person or group of persons are known as personal accounts. These accounts are necessary, in particular, to record credit transactions. Personal accounts are of the following types:
1. Natural persons: An account recording transactions with an individual is termed as a natural persons' personal account. For e.g., Kamal's account, Mala's account. Both males and females are included in it.
2. Artificial or legal persons: An account recording financial transactions with an artificial person created by law or otherwise is termed as an artificial persons' personal account. For e.g. Firms' accounts, limited companies' account.
3. Representative personal account: An account indirectly representing a person or persons is known as representative personal account. When accounts are of similar nature and their number is large, it is better to group them under one head and open a representative personal account. For e.g. prepaid insurance, outstanding wages,etc.
Bank account is a personal account as it is related to a banking firm which is an artificial person. All those accounts which are related to a person, whether artificial or natural, are termed as personal accounts.
Discount allowed is an example of ________.
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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 allowed is an expense. It is allowed when the debtor makes payment.
The journal Entry for Discount allowed is
Discount allowed a/c Dr.
To Debtors a/c
Therefore, there is a Decrease in Asset & Owner's Liability in this case.
An example of a Decrease in liabilities and increase in owner's capital is _________.
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0%
Accrued Interest
0%
Outstanding Rent
0%
Bills Payable Accepted
0%
Conversion of Partner's loan into capital
Explanation
The journal entry for
Conversion of Partner's loan into capital is
Partner's loan a/c Dr.
To Capital a/c
Therefore, Conversion of Partner's loan into capital is an example of decrease in liabilities and increase in owner's capital.
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Practice Class 9 Elements Of Book Keeping And Accountancy Quiz Questions and Answers
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