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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 8 - MCQExams.com
CBSE
Class 9 Elements Of Book Keeping And Accountancy
Nature Of Accounts And Rules Of Debit And Credit
Quiz 8
Depreciation 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
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 _________.
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No change in Owner's Equity
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Increase in Asset & Owner's Equity
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Decrease in assets & Owner's Equity
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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.
Goods destroyed by fire is an example of __________.
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Decrease in Assets and Owners Equity
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Increase in Asset & Owner's Equity
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Decrease in Liability & Owner's Equity
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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
An example of increase in assets and increase in owner's capital is __________.
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Goods purchased for cash
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Goods purchased on credit
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Goods brought in by owner
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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.
Loan from Mahesh Account is ______________.
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An Asset Account
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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 destroyed by Fire is _______________.
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An Asset Account
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A Liability Account
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A Revenue Account
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An Expense Account
Explanation
Goods destroyed by Fire is an expense for the company. Hence, the correct option is D.
Credit means ________.
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an increase in asset
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an increase in liability
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a decrease in liability
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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.
Debit means ________.
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An increase in liability
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An increase in asset
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A decrease in asset
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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.
Making Provision for Discount on Debtors 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
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 _______.
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Journal.
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Ledger.
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Cash Book.
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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 ___________.
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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
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
.
Journal is a book of __________.
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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
Sales of the Scrap of raw materials appearing in the trial balance are shown on the credit side of _______.
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Trading account
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Manufacturing account
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Profit and Loss A/c
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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.
DEBIT signifies _________________.
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Increase in assets account
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Decrease in liability account
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Decrease in capital account
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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 _____________.
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Secondary books.
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Memorandum books.
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Primary books.
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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.
Accounting entries for the repayment of a loan received from Richard, the owner's friend is _____________________.
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Debit Cash account and Credit capital account
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Credit cash account and Debit Richard's loan account
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Credit cash account and Debit capital account
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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.
If wages are paid for construction of business premises,_______A/c is credited and ____ A/c is debited.
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Wages, Cash
0%
Premises, Cash
0%
Cash, Wages
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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.
A ______ is an accounting document representing an internal intent to make a payment to an external entity, such as a vendor or service provider.
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Debit Note
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Credit Note
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Voucher
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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.
What will be journal entry when cash is withdrawn from bank for personal use?
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Drawings A/c debit, bank A/c credit
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Cash A/c debit, drawings A/c credit
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Bank A/c debit, drawings A/c credit
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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.
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.
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Voucher
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Invoice
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Cash memo
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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.
A ___________ voucher is a document which comprises of all the details of an accounting transaction.
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Journal
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Petty Cash
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Debit
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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 ______________.
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left or credit side of the liability account
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right or debit side of the liability account
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right or credit side of the liability account
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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 _______________.
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Invoice
0%
Credit and Debit notes
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Revised invoice issued in relation to outward supplies
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All the above
Required return is 15% and premium for risk is 11% then risk free return would be _____________.
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26.00%
0%
4.00%
0%
16.50%
0%
1.36%
Financial risk is most associated with ___________________________.
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the use of equity financing by corporations
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the use of debt financing by corporations
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equity investments held by corporations
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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 ___________.
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Mercantile system only
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Cash system only
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Mercantile or cash system only
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Hybrid system
The two types of cash vouchers include debit vouchers and ____________ vouchers.
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Credit
0%
Memo
0%
Receipt
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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.
An entry which has more than one debit and or credit is called ________.
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single
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multiple
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compound
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none of these
Explanation
An entry which has more than one debit and or credit is called compound entries.
Which of the following statements is 'True'?
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Building Account is a nominal account
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Outstanding rent account is a non-personal account
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Every debit has a corresponding credit
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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.
State whether true or false:
There is no set format of an accounting voucher.
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True
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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.
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Practice Class 9 Elements Of Book Keeping And Accountancy Quiz Questions and Answers
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