Account 1 Marks Question

Cash and bank transactions are recorded.

Integrated Goods and Services Tax (IGST).

It is prepared to make a record of petty expenses.

True.
Explanation:
Goods returned by customers are recorded in Sales Return Book.

An account is divided into two sides. The left side of an account is known as debit and right side known as credit.

The column ‘Ledger Folio' is filled at the time of posting into the ledger and not at the time of Journalising.

Journal Proper is a book of account in which those transactions and events are recorded which are not recorded in the subsidiary books.

False.
Explanation:
Sales Book is a book of original entries.

Cash Book.

An account is not opened in the name of the proprietor, he is represented by Capital Account.

True.
Explanation:
Total of the Sales Book is posted to the Credit of the Sales Account in Ledger periodically.

It is a subsidiary book which records Credit purchases of goods.

Asset.

Purchases Return Book is a subsidiary book in which the return of goods purchased is recorded.

Increase an asset and increase a liability: Purchase goods on credit i.e., increase in stock and increase in creditors.

It is a subsidiary book which records Credit sales of goods.

Capital account is a pesonal account. Because capital account is related to owner personal capital and thats why this is treated in the liabities side of balance sheet.

Journal being Book of Original Entry contains all the important information relating to a transaction in a chronological order.

Bank overdraft is the drawing out of a Bank Account of more than what has been deposited in it.

Simple or Single Column Cash Book and Two-column Cash Book with Cash and Bank Columns.

1. Opening Entry.
2. Closing Entries.

Purchases Return Account.

Journal Proper.

When the bill is renewed, entries are passed for cancellation of the old bill and then for recording the new bill.

It saves the time of Chief Cashier.

Yes. Debit balance of Cash Book brought down is an asset of the firm. It means the firm has cash balance of ₹ 10,000 in hand.

Credit Balance in the bank column of the Cash Book signifies bank overdraft.

Yes, it will be recorded in the books of account, as drawings by Rajan.

No. Cash Book is a principal book as well as a subsidiary book.

False.
Explanation:
Only credit purchases of goods are recorded in Purchases Book.

Purchases book is a part of Journal whereas purchases account is a part of Ledger.

Simple Petty Cash Book and Analytical Petty Cash Book.

Two advantages of a Journal are:

1. It reduces the possibility of error.
2. It provides an explanation of the transactions.

A debit note is prepared by the purchaser when goods are returned by him. It is called a debit note because the party's account is debited with the amount written in it.

It is so because cash payments cannot be more than the cash in hand.

Sales Return Book is a subsidiary book in which the return of goods sold is recorded.

They are posted on the debit side of the Ledger Account.

An account is said to have a debit balance if the total of its debit side is more than the total of its credit side.

No Entry.

Simple Cash Book is a Cash Book with one column on each side to record only cash transactions.

It is an Asset.

An account is said to have a credit balance if the total of its credit side is more than the total of its debit side.

Petty Cash Book is the Cash Book in which expenses involving small amount are recorded.

Opening Entry is the Journal entry through which the closing balances of the previous year are brought forward in the current year's books of account.

They are posted on the credit side of the Ledger Account.

Nominal (Revenue or Expense) Accounts: Accounts which relate to expenses, losses, gains, revenue, etc., are termed as Nominal Accounts. These are Salary Account, Purchases Account, Interest Paid Account, Sales Account and Commission Received Account. The net result of all the Nominal Accounts is profit or loss which is transferred to the Capital Account.

Purchases Book is a subsidiary book in which credit purchases of goods dealt in or stores and raw material used for production are recorded.

Sales Book is a subsidiary book in which credit sale of goods dealt in are recorded.

The wholesaler should send a credit note for ₹ 1,920 to the retailer, being the amount of 12 items @ ₹ 200 after allowing 20% Trade Discount.