Recording Of Transactions - Ii - Class 11 Commerce Accountancy - Extra Questions

Answer the following question in One sentence each.
Write the meaning of Credit Note.

It is an intimation sent to a person dealing with the business that his account is being credited for the purpose indicated therin. In other words, it is a document which is prepared to give credit if less credit is given earlier or to cancel the wrong debit or extra debit given, is called credit note.


Answer in one sentence only.
What is a conventional cash book?

A cash book which is prepared to record not only cash transactions but all types of transactions such as credit purchase or sale, banking transactions, opening and closing entries, adjustments entries is called conventional cash book.


Answer the following question in one sentence each.
Write the meaning of Debit note.

A debit note is a document sent by a buyer to the supplier, notifying that, a debit has been recorded against the goods returned to the supplier.


Fill in the blanks with appropriate words in the following sentences.
The transaction "Paid salaries" comes under _______  account.

Nominal.
Accounts which relate to expenses, losses, gains, revenue, etc. are Nominal Accounts. These are salary account, interest account, commission account, etc.


What is purchase return book?

Sometimes, goods purchased can be defective or of low quality, etc. and hence, need to be returned. When the goods purchased on credit are returned to the supplier, these are recorded in the Purchase return book. A separate book is maintained for the purchase return and these are not deducted from the purchases in the Purchase book. 


Write the difference between return inwards and return outwards.

Goods which we purchased on credit if returns back it is called return outwards(Purchase return) where as goods which we have sold and returned by the customer is called return inwards(Sales Return)


What is cash book? Explain the types of cash book.

A cash book is a financial journal that contains all cash receipts and disbursements, including bank deposits and withdrawals. 
Entries in the cash book are then posted into the general ledger.

Types of cash book :- 
  • A single column cash book to record only cash transactions. 
  • A double/two column cash book to record cash as well as bank transactions. 
  • A triple/three column cash book to record cash, bank and purchase discount and sales discount. 
  • A petty cash book to record small day to day cash expenditures


What is petty cash book? How it is prepared?

To avoid a large number of small payments, a separate cash book is made which is maintained by a petty cashier, who is paid a small amount at the beginning of the period called impress amount. When petty cashier spend the money, he is reimbursed the same amount to make further small expenditure.


What do you understand by balancing of account?

Accounts are prepared on weekly, fortnightly, monthly, quarterly or on daily basis. At the end of each period they are balanced. The balancing of the accounts is done in the manner given below:
1. The totals of the debit and credit of an account is calculated, to ascertain which one of them is higher.
2. The higher figure among debit and credit side is written in the grand total cell on both sides of the account, i.e., in debit and in credit side.
3. The next step is to ascertain the difference between the debit total and the credit total. This difference is called 'Closing Balance' or 'Balance carried down', and is denoted by 'Balance c/d'.
4. The 'Balance c/d' will be shown either in the debit or credit side, whichever totals up into lower amount.
5. If 'Balance c/d' is written in the debit side, then the balance is called 'Credit balance'. On the other hand, if 'Balance c/d' is written in the credit side, then the balance is called 'Debit balance'.
6. On closing the account, 'Balance c/d' is brought forward to the subsequent period, and it is written as 'Balance b/d'.
Usually, the closing balances of real and personal accounts are forwarded to the next period by this manner. For nominal accounts, Steps 1 to 3 remain same and they are closed by transferring the closing balances either to Trading Account to Profit and Loss Account.


What are the closing entries? Give four examples of closing entries.

The preparation of Trading and Profit and Loss account requires that the balances of accounts of all concerned items are transferred to it for its compilation. For transferring the balance of all the ledger account to concerned head is done through closing entries. Here are some examples of closing entries.
(i) Opening stock account, Purchase account, Wages account, Carriage inwards account ad direct expenses account are closed by transferring to the debit side of the Trading and Profit and Loss account. This is done by recording the following entry:
Trading A/cDr
To Opening Stock A/c
To Purchase A/c
To Wages A/c
To Carriage Inwards A/c
To All Other Direct Expenses A/c

(ii) The Purchase return or Return outwards account are closed by transferring its balance to the Purchase account. The following entry is recorded for this purpose:
Purchase Return A/c                                                  Dr.
To Purchase A/c

(iii) Similarly, the sales return or Return inwards account is closed by transferring its balance to the Sales account is
Sales A/c  Dr
To Sales Return A/c

(iv) The Sales account is closed by transferring its balance to the credit side of the Trading and Profit and Loss account by recording the following entry.

Sales A/cDr
To Trading A/c


When the total of debit side of an account exceeds credit side, what is the balance shown by the said account?

A ledger account can have both debit or a credit balance which is determined by which side of the account is greater than the other. While preparing an account if the debit side is greater than the credit side, the difference is called "Debit Balance". So, if Debit Side > Credit Side, it is a debit balance. 

All the ledger accounts are required to be balanced. Balancing an account means ascertaining the net effect of the transaction, i.e. the difference between the debit and credit sides of the ledger account. If the debit side of an account exceeds its credit side, then it is called debit balance.


Write the word , term or phrase which can substitute each of the following statement.
An account where total of Purchases Book is posted.

There are various subsidiary books are maintained by the business to record specif transactions like sales day book, purchase day book, sales return book, purchase return book, bills payable books, bills receivable books etc. 

All credit purchases are recorded in Purchase Day Book. After a period, the total of purchase day book is posted to ledger in "Purchase A/c"


Answer the following question in One sentence each.
Which account will be affected by an error of casting in Sales Book?

Casting means adding the total amount of the ledger accounts. Error of casting in sales book only affects the sales a/c, as the total of this book is undercast or overcast. Thus, it will lead to a mismatch in the debit and credit balance of trial balance.


Write a word / term / phrase as a substitute for the following statement.
The assets which are not recorded in the books of accounts.

The assets which are not recorded in the books of accounts is Unrecorded Assets.


Raja of Ngpur draws a bill on Pradhan of Bandara for Rs. 6,000 at 3 months. Pradhan accepted and returned it to Raja. Raja then sent the bill to bank for collection.
On due date, Pradhan finds himself unable to make payment of the bill and requests Raja to along with interest Rs. 250 in cash and should accept new bill for the balance at 2 months. These arrangements were carried through.
Afterward, one month before due date of new bill Pradhan retired his acceptance by paying Rs. 4, 850.
Give Journal entries in the books of Raja of Nagpur.

In the books of Raja of Nagpur

 

Date

Particulars

 

Amount (Dr.)

Amount (Cr.)

1.

Bills receivable A/c

Dr.

6000

 

 

To Pradhan

 

 

6000

 

(Being bill received from pradhan)

 

 

 

2.

Bill sent for collection A/c

Dr.

6000

 

 

To Bill receivable

 

 

6000

 

(Being bill sent for collection)

 

 

 

3.

Pradhan  A/c

Dr.

6000

 

 

To bill sent for collection

 

 

6000

 

(Being bill sent for renewal)

 

 

 

4.

Cash A/c

Dr.

1250

 

 

To Pradhan

 

 

1000

 

To interest

 

 

250

 

(Being cash paid by pradhan)

 

 

 

5.

Bills receivable A/c

Dr.

5000

 

 

To pradhan

 

 

5000

 

(Being new bill received)

 

 

 

6.

Cash A/c

Dr.

4850

 

 

Rebate A/c

Dr.

150

 

 

To bills receivable A/c

 

 

5000

 

(Being bill retired under rebate)

 

 

 


Write notes on the following 
Write short note on Global Depository Receipt :

Global Depository Receipt : 

Introduction - Globalisation has facilitated Indian Companies to raise international finance by issuing shares to NRIs. But listing of shares in foreign stock exchanges is complicated, rigid and lengthy process. Avoiding such complications, an Indian company can get its shares listed on Foreign Stock Exchanges, using GDRs and ADRs. 

Meaning - GDR and ADR are Dollar/Euro denominated instruments traded on foreign stock exchange. containing fixed number of shares. The 'Depository Banks' issue GDRs and ADRs to investors against Indian companies shares. Their holders get same rights like Indian shareholders. If the depository receipt is traded in USA, it is called ADR and if the depository receipt is traded in any country other than USA it is called GDR. 

Advantages - They are the means of investment for NRI's and foreign nationals wanting to invest money in India. 


What do you mean by subsidiary books?

Subsidiary Books are the books that record the transactions which are similar in nature in an orderly manner. They are also known as special journals or Daybooks.
In large-scale organizations, it is not easy to record all the transactions in one journal and post them into various accounts. Hence, subsidiary books are maintained. 


Which type of accounts will always have debit balances?

Business transactions are events that have a monetary impact on the financial statements of an organisation. When accounting for these transactions, numbers are recorded in two accounts, where the debit column is on the left and the credit column is on the right.
A debit is an accounting entry that either increases an asset or expense account, or decreases a liability or equity account. It si positioned to the left in the accounting entry.
Assets, expenses, losses and the owner's drawing account will normally have debit balances. Their balances will increase with a debit entry, and will decrease with a credit entry.


Class 11 Commerce Accountancy Extra Questions