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1201.

Maker of the bill is known as _________

Answer»


SOLUTION :DRAWER
Discussion
1202.

Mahesh who keeps his books on Single Entry System sells goods at Cost plus 50%. On 1st April, 2018 his capital was Rs. 4,00,000 and on 31st March, 2019 it was Rs. 3,50,000. He had withdrawn Rs. 20,000 per month besides goods of the sale value of Rs. 60,000. How much did he earn in 2018-19?

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ANSWER :PROFIT - RS. 2,30,000.
Discussion
1203.

Main feature of business transaction is:

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It involves an economic activity
It results in a change in thefinancial positionof the firm
Change MUST be CAPABLE of being expressed in TERMS of money
All of the above

ANSWER :D
Discussion
1204.

Madan, a businessman has employed sujit and has estimated his value at 10,00,000.He has accounted it as an asset in the books of account .Is he correct in doing so?

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SOLUTION :No, he is not correctbecause in accounting only those trancsastions and events are recorded which can be measured in TERMS of MONEY. Value of MANPOWER cannot be measured in money terms and , therefore, should not be ACCOUNTED.
Discussion
1205.

Machinery used in production is not a fixed asset.

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SOLUTION : FALSE
Discussion
1206.

M/s Singhania and Bros. purchased a plant of Rs. 5,00,000 on April o1.2017. and spent Rs.50,000 for its installation. The salvage value of the after its useful life of 10 years is estimated to be Rs. 10,000.Record journal entries for the year 2016-17 and draw up Plant account and Depreication Account for first three given theat the depreciation is charged using straight line method if : (i) The books of account close on March 31 every year, and (ii) The firm charges depreciation to the asset account

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SOLUTION :
Depreciation, Provisions and Reserves

WORKING Notes
(1) Calcuation of oiginal cost
`{:(,"(RS.)"),("Puchase cost","50,00,000"),("Add: Installation cost",underline("50,000")),("ORIGINAL cost","5,50,000"),("Salvage value",underline("10,000")),("Useful life",10"YEARS"):}`
Depreication amount `=(Rs."5,50,000-Rs. 10,000")/(10)=Rs. "54,000 p.a"`
Discussion
1207.

Machinery Purchased' is a

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REAL ACCOUNT
Nominal account
Personal Account
None of these

Solution :Real Account
Discussion
1208.

Machinery Account is neither a __________ Account nor a ________ Account.

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SOLUTION :PERSONAL,NOMINAL
Discussion
1209.

M/s Nishit printing press bought a printing machine for Rs. 6,80,000 on April 01,2015. Depreciation was provided on straight line basis at the rate of 20% on original cost. On April 01, 2017 a modification was made in the machine to increase its technical reliability for Rs. 70,000.On the same date, an important component of the machine was replaced for Depreciation, Provisions and Reserves Rs. 20,000 due to excessive wear and tear. Routine maintenance expenses during the year are Rs. 5,00 Prepare machinery account, provision for depreciation account. Show the working notes accordingly for the year ending March 31, 2018.

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Solution :
Working Notes
`{:(,Rs.),("COST of Machine for the YEAR 2015",="6,80,000"),("DEPRECIATION Charged for the ",),("Years 2015-16 and 2016-17",=2[(20)/(100)XX"6,80,000"]),(,="2,72,000"):}`
(2) `{:("Depreciation for the year 2017-18",=Rs."6,80,000"),("20% of 6,80,000",="1,36,000"),("20% of 90,000",="18,000"),("(i.e.,Rs. 70,000+Rs.20,000)",),("Depreciation for the year 2017-18",="1,54,000"):}`
Discussion
1210.

M/s Kalra Bros., a dealer in computer hardware, has received an order for 10 computers Accounting. Should the amount received , e.e., Rs. 50,000 be credited to the Sales Account or to the Advance Received Account ? Give reasons for your answer.

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SOLUTION :It should be credited to the ADVANCE RECEIVED ACCOUNT and LATER transferred to the account of purchaser on affecting sale.
Discussion
1211.

M/s Future Ltd. Has invested ₹ 10,000 in the shares of RelicamIndustries Ltd. Current market value of these shares is ₹ 10, 500. Accountant of Future Ltd. Wants to show ₹ 10,500. as value of investment in the books of accounts, which accounting convention restrictshim from doing so?

Answer»

Full disclosure
CONSISTENCY
CONSERVATION
Materiality

Answer :C
Discussion
1212.

M/s Business Services has not used its CNC Bending Machine No. 10 during the year. Hence, the accountant has not provided Depreciation on it. Do you consider it to be correct? Give your reasons.

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Solution :No, I do not consider it. to be CORRECT because an ASSET does not depreciate only because of its use but ALSO because of the EFFLUX of time. Although CNC Bending Machine No. 10 has not been used, its value MUST have declined because of efflux of time.
Discussion
1213.

Lower of cost or net relisable value is an example of

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CONSISTENCY CONCEPT
PRUDENCE (CONSERVATISM) concept
Realisation Concept
Matching Concept.

Solution :Prudence (Conservatism) concept
Discussion
1214.

Loss on sale of an old car is debited to

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PROFIT and LOSS A/c
Car A/c
Dpreciation A/c
None of these

Solution :Profit and Loss A/c
Discussion
1215.

List any two functions of Accounting.

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SOLUTION :(i) IDENTIFYING financial transactions, and (ii) Recording them in the books of ACCOUNT.
Discussion
1216.

List any two examples of Fixed Assets

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SOLUTION :(i) LAND and BUILDING, and (II) COMPUTERS
Discussion
1217.

Liability is which obligation to pay, depends on happening of an event is

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CONTINGENT LIABILITY
Long TERM Liability.
Short term Liability
None of these

Solution :Contingent liability
Discussion
1218.

L.F. in the journal is filled at the time of posting.

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ANSWER :1
Discussion
1219.

Left hand side of an account is calledthe debit side.

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SOLUTION : TRUE
Discussion
1220.

Ledger provides a true picture of a group of similar_______

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SOLUTION :TRANSACTIONS
Discussion
1221.

Ledger is the principle book of account.

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SOLUTION : TRUE
Discussion
1222.

Ledger is not prepared from a Journal .

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SOLUTION : FALSE
Discussion
1223.

Ledger is called a book of

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PRIMARY ENTRY
secondary entry
FINAL entry
None of these

Solution :final entry
Discussion
1224.

Ledger is a book in which

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REAL and Nominal ACCOUNTS are maintained
Real and PERSONAL Accounts are maintained
Real, Personal and Nominal Accounts are maintained
None of the above.

Solution :Real, Personal and Nominal Accounts are maintained
Discussion
1225.

Ledger Account is prepared from

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events
transactions
JOURNALS
None of these

Solution :Journals
Discussion
1226.

Ledger account gives the folio of …………..(Journal , Ledger)

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ANSWER :JOURNAL
Discussion
1227.

Land is a-depreciable asset. Comment.

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SOLUTION :LAND is not DEPRECIATED because its useful LIFE is unlimited.
Discussion
1228.

Last step of accounting process is :

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Provide information to VARIOUS parties who are interested in BUSINESS enterprise.
Record transactions in the books.
To make summary in the form of FINANCIAL statements.
To classify the transactions under SEPARATE heads in the ledger.

Answer :A
Discussion
1229.

Larger advertisement expenditure to introduce a new product is

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CAPITAL EXPENDITURE
REVENUE Expenditure
DEFERRED Revenue Expenditure
None of these

Solution :Deferred Revenue Expenditure
Discussion
1230.

Land and Building are shown at ₹ 10 Lac in the Balance Sheet of the business owner by Mr. Yuvraj. However, as per the certificate of Govt. approved valuer the realisable value of Land and Building is ₹200 Lac. Mr. Yuvraj wants to show the Land and Builiding at this books. Can he do so?

Answer»

SOLUTION :No. Accounts are maintained on the concept of historical COSTS (i.e., the ORIGINAL cost). ACCORDING to this concept, an asset is recorded in the books of accounts at the PRICE at which it was acquired.
Discussion
1231.

Lalit of Delhi purchased goods of Rs 20,000 from Mehar of Kanpur. Whether IGST or CGST and SGST will be charged by Mehar ? Why?

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SOLUTION :MEHAR will CHARGE IGST because it is inter-state SALE.
Discussion
1232.

Kumaran, a trader, does not keep proper boods of account. However, he furnishes you the following particulars: {:(,"31st March, 2018 (Rs.)","31st March, 2019 (Rs.)"),("Cash at Bank","4,500","3,000"),("Cash in Hand","300","4,000"),("Stock-in-Trade","40,000","45,000"),("Debtors","12,000","20,000"),("Office Equipment","5,000","5,000"),("Sundry Creditors","30,000","20,000"),("Furniture","4,000","4,000"):} During the year Kumaran introduced Rs. 6,000 as further capital and withdrew Rs. 4,000 as drawings. Write off Depreciation on furniture at 10% andon office equipment at 5%. Prepare a statement showing the Profit or Loss made by him for the year ended 31st March, 2019.

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SOLUTION :

ALTERNATIVELY, if PROFIT before CERTAIN adjustments (e.g., Depreciation on Fixed Assets, Provision for Doubtful Debts, etc.) is also calculated in addition to net profit, the above solution will be as follows:
The Statement of Affairs as at 31st March, 2019 will be same as given above. But the Statement of of Affairs (before Adjustments) will be prepared as follows:

Discussion
1233.

Kuldeep, a general merchant, keeps his accounts on Single Entry System. He wants to know the results of his business on 31st March, 2019 and for that following information is available: |{:(,,"1st April, 2018 (Rs.)","31st March, 2019 (Rs.)"),("Cash in Hand",.......................................................,"1,50,000","1,75,000"),("Bank Balance",.......................................................,"7,50,000","8,00,000"),("Furniture",.......................................................,"1,00,000","1,00,000"),("Stock",.......................................................,"5,00,000","6,50,000"),("Creditors",.......................................................,"3,50,000","4,00,000"),("Debtors",.......................................................,"2,50,000","3,00,000"):}| During the year, he had withdrawn Rs. 5,00,000 for his personal use and invested Rs. 2,50,000 as additional capital. Calculate his profits on 31st March, 2019 and prepare the Statement of Affairs as on that date.

Answer»


ANSWER :PROFIT - RS. 4,75,000.
Discussion
1234.

Krishan started his business on 1st April, 2018 with a Capital of Rs. 1,00,000. On 31st March, 2019, his assets were: {:(,," Rs."),("Cash","...........................................","3,200"),("Stock","...........................................","34,800"),("Debtors","...........................................","31,000"),("Plant","...........................................","85,000"):} He owed Rs. 12,000 to sundry creditors and Rs. 10,000 to his brother on that data. He withdrew Rs. 2,000 per month for his personal expenses. Ascertain his profit.

Answer»


ANSWER :PROFIT EARNED - RS. 56,000.
Discussion
1235.

Kapil's Trail Balance provides the following information : Depreciation is provided @ 10% p.a. Show how will this will be shown in the Profit and Loss Account .

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SOLUTION :NA
Discussion
1236.

Journalise the following transactions for Kamal, Delhi for April, 2019, post them in Ledger Accounts and balance them: CGST and SGST is levied @ 6% each on intra-state transaction and IGST @ 12% on inter- state transactions. GST is not leived on transaction maked with (*).

Answer»

Solution :





Note :In this ILLUSTRATION, Nominal Accounts (i.e., Purchase A/c, SALES A/c, Return Outward A/c and STATIONERY A/c ) are balanced only for the purpose of showing them in the TRIAL Balance.
Discussion
1237.

Journalise the following transactions, post them into Ladger and prepare a Trial Balance:

Answer»


ANSWER :TRIAL BALANCE TOTAL - RS. 1,04,300
Discussion
1238.

Journalise the following transactions in the book of Shri Manoj, Kolkata are prepared Ledger Accounts: Opening Debit Balances : Cash in Hand ₹ 15,000, Cash at Bank ₹55,000, Stock ₹ 28,000, Debtor ₹ 25,000 (Sunil ₹ 5,000, Abhay ₹ 10,000 and Alok ₹10,000), Fixed Asset: Computer and Printer ₹50,000, Furniture ₹ 10,000, Delivery Van ₹ 25,000. Opening Credit Balances : Bank Loan ₹ 90,000, Salaries Outstanding ₹ 15,000, Creditor ₹20,000, Bills Payable ₹10,000, Capital ₹73,000. Transaction for the month of April, 2019 were : (i) Purchased goods from M/s Prabhat Electricals, Delhi ₹10,000 less 10% Trade Discount. Cheque was issued immediately and availed 2% Cash Discount on purchase price. (ii) Cheque was received from Abhay for the balance allowind him discountof 2%*. (iii) Cheque was received from Abhay for the balance due*. (iv) Sunil was unable to pay the full dues and offered to pay 75%, which was accepted. Cheque was dully received*. (v) Gave goods costing ₹ 1,000 as charity. These goods were purchased in Kolkata. (vi) In a competition held by the RWA where the shop is located on electric iron costing ₹ 500 was given as an award. It had been purchased from Prabhat Electricals, Delhi. (vii) A debt of ₹10,000 that was written off as bad debt in the past was received *(viii) Salaries amounting to₹ 15,000 provided in the books for the months of March, 2019 were paid through cheque*. Sales for the monthswere: Cash Sales ₹15,00,000 (Intra-state) and Credit Sales ₹ 3,00,000 (Inter-state) ₹9,00,000. Cheque Received from Debtors ₹ 2,00,000, Deposited Cash ₹15,00,000. (xi) Paid to creditors through cheques ₹ 8,90,000*. (xii) Bank Loan repaid during the month ₹ 20,000*. Inter-state transactions are subject to levy of IGST @ 12% and Intra- state transaction are subjected tolevy of CGST and SGST @ 6% each. GST is not levied on transaction marked with (*).

Answer»


Answer :TRAIL Balance Total -₹ 23,17,180; Dr. Balance: CASH A/c ₹ 93,000 ; Bank A/c ₹ 8,43,650; Stock A/c ₹ 28,000; Purchase A/c ₹ 10,07,500; Bad Debt A/c ₹ 1,250; DISCOUNT Allowed A/c ₹ 200; Charity A/c ₹ 1,120; ADVERTISEMENT A/c ₹560; Debtor A/c ₹1,36,000;Computer and Printer A/c ₹50,000; Furniture A/c ₹ 10,000; Delivery Van A/c ₹ 25,000.
Input IGST ₹ 1,09,020; Input CGST ₹5,940; Input SGST ₹5,940.
Cr. Balances: Capital A/c ₹ 73,000: Bank Loan A/c ₹70,000; Creditors A/c ₹1,38,000; Bills Payables A/c ₹10,000; Bad debts Recovered A/c ₹ 10,000 ; Discount Received A/c ₹ 180; Sales A/c ₹ 18,00,000; Output CGST ₹ 90,000; Output SGST ₹ 90,000; Output IGST ₹ 36,000.
Discussion
1239.

Journalise the following transactions and post them into the Ledger :

Answer»

Solution :
Notes : 1. Discount allowed by OTHERS is discount received. It is a gain so it should be credited.
2. A combined or compound entry is passed since rent and salary to RAM have been paid in cash on the same day.
3. Ledger Folios are imaginary.


Note. : At the end of an accounting period, accounts marked with (*) will b closed by transferring to the ' Trading Account ' and accounts marked with (**) will be closed by transferring to the ' Profit and Loss Account ' since they are Nominal Accounts ( REVENUE and Expenses Accounts under MODERN Classification). In other words, balance of accounts related to Goods Account (e.g., Purchase Account, Sales Account, Purchase Return Account, Sales Return Account ) and Direct Expenses Accounts are transferred to the Trading Accounts and accounts relate to indirect expenses or INCOMES are transferred to the Profit and Loss Accounts.
Discussion
1240.

Journal provides an explanation of the _____

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SOLUTION :TRANSACTION
Discussion
1241.

Journal Proper records purchase and sales of assets on credit.

Answer»


SOLUTION : TRUE
Discussion
1242.

Journal Proper records transactions of the nature for which _______ Journal is not maintained.

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SOLUTION :SPECIAL
Discussion
1243.

Journal is called a book of

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PRIMARY ENTRY.
secondary entry.
final entry.
None of these.

Solution :Primary entry.
Discussion
1244.

Journal entry for wood (goods) of ₹ 2,000 used for making office furniture is

Answer»

DR. FURNITURE A/c and Cr. Cash A/c by ₹ 2,000
Dr. Cash A/c and Cr. Furniture A/c by ₹2,000
Dr. Furniture A/c and Cr. PURCHASES A/c by ₹ 2,000
None of these

SOLUTION :Dr. Furniture A/c and Cr. Purchases A/c by ₹ 2,000
Discussion
1245.

Journal entry for stock left unsold at the end of the year is :

Answer»

Dr. CLOSING Stock A/c and Cr. TRADING A/c
Dr. Trading A/c and Cr. Closing Stock A/c
Dr. PROFIT & LOSS A/c and Cr. Closing Stock A/c
Dr. Closing Stock A/c and Cr. Profit and Loss A/c

Solution :Dr. Closing Stock A/c and Cr. Trading A/c
Discussion
1246.

Journal entry to record salaries will include:

Answer»

Debit SALARIES Credit CASH.
Debit CAPITAL Credit cash.
Debit cash Credit SALARY.
Debit salary Credit creditors

Solution :a
Discussion
1247.

Journal entry for selling old machinery with book values ₹5,000 for ₹ 3,500 is :

Answer»

DR. CASH A/c by ₹5,000 and CR. Profit and LOSS A/c by ₹ 1,500 and Sales A/c by ₹3,500
Dr. Sales A/c by ₹ 3,500 and Profit and Loss A/c by ₹ 1,500 and Cr. Cash A/c by ₹5,000
Dr. Cash A/c and Cr. Sales A/c by ₹ 3,500
Dr. Cash A/c by ₹5,000 and Cr. Machinery A/c by ₹3,500 and Profit and Loss A/c by ₹1,500

Solution :Dr. Cash A/c by ₹5,000 and Cr. Machinery A/c by ₹3,500 and Profit and Loss A/c by ₹1,500
Discussion
1248.

Journal entry for paymentof income Tax ₹5,000 by the propritor is :

Answer»

DR. INCOME Tax A/c and Cr. Purchase A/c by ₹5,000
Dr. Purchase A/c and Cr. DRAWING A/c by ₹5,000
Dr. Drawing A/c and Cr. Income Tax by ₹5,000
Dr.Drawing A/c and Cr. CASH A/c by ₹5,000

Solution :Dr.Drawing A/c and Cr. Cash A/c by ₹5,000
Discussion
1249.

Japalhas purchaseda carfor ₹5,00,000whichhe getfinanced forma Bankto theextent of ₹4,00,000.How willit beshown in theaccouding equation?

Answer»

Solution :₹ 1,00,000 will bededucted FORM ASSET (Cash/BANK) , ASSEST (CAR) will beshown at ₹ 5,00,000and Bank Loan(on theLiabilities side) Will bebe shown at ₹ 4,00,000.
Discussion
1250.

Japalhas purchaseda carfor ₹5,00,000whichhe getfinanced forma Bankto theextent of ₹4,00,000.How willit beshown in theaccouding equation?

Answer»

Solution :₹ 1,00,000 will bededucted form Asset (Cash/Bank) , Assest (CAR) will beshown at ₹ 5,00,000and Bank Loan(on theLiabilities side) Will BEBE SHOWN at ₹ 4,00,000.
Discussion