Recording of Transactions

What is the central idea of the chapter "Recording of Transactions - II"?

1. Only journals are sufficient for accounting.
2. Special books such as the Cash Book, Petty Cash Book, Purchase Book, Sales Book, Purchase Return Book, Sales Return Book, and Journal Proper are maintained to record different types of transactions systematically, improve efficiency, reduce errors, and simplify accounting work.
3. Ledger accounts are no longer necessary.
4. Only cash transactions are recorded in accounting.

Why is the Petty Cash Book maintained separately?

1. To record only credit sales
2. To record small expenses efficiently and reduce the workload of the main Cash Book
3. To prepare the Balance Sheet
4. To calculate depreciation

What does the discount column in a Triple Column Cash Book record?

1. Depreciation
2. Discounts Allowed and Discounts Received
3. Sales Tax
4. Wages

Which transaction is recorded in the Cash Book?

1. Credit purchase of goods
2. Cash purchase of furniture
3. Credit sale of goods
4. Credit purchase return

What is the main advantage of maintaining subsidiary books?

1. They increase taxation.
2. They reduce clerical work and improve efficiency.
3. They eliminate the need for ledgers.
4. They replace financial statements.

Which book records transactions that cannot be entered into any subsidiary book?

1. Sales Book
2. Journal Proper
3. Purchase Book
4. Cash Book

The Sales Return Book is also known as:

1. Returns Inward Book
2. Returns Outward Book
3. Purchase Day Book
4. Journal Proper

Which book is maintained for recording goods returned to suppliers?

1. Sales Return Book
2. Purchase Return Book
3. Cash Book
4. Journal Proper

Which subsidiary book records credit sales of goods?

1. Purchase Book
2. Sales Book
3. Cash Book
4. Petty Cash Book

Which book records only credit purchases of goods?

1. Sales Book
2. Purchase Book
3. Cash Book
4. Journal Proper

Under the Imprest System, the petty cashier receives:

1. Unlimited cash
2. A fixed amount periodically restored after reimbursement
3. Only bank cheques
4. Cash only at year-end

What is Petty Cash mainly used for?

1. Purchasing machinery
2. Recording small routine expenses
3. Recording credit sales
4. Recording owner's capital

A transaction involving both Cash and Bank columns of the Cash Book is called:

1. Credit Entry
2. Contra Entry
3. Journal Proper Entry
4. Adjustment Entry

Which type of Cash Book contains Cash and Bank columns only?

1. Single Column Cash Book
2. Double Column Cash Book
3. Triple Column Cash Book
4. Petty Cash Book

What is the primary purpose of preparing a Cash Book?

1. To record only credit transactions
2. To record all cash and bank transactions systematically
3. To calculate depreciation
4. To prepare the Balance Sheet directly

Why is the double-entry system considered more reliable than the single-entry system?

1. It records only cash transactions.
2. It records every transaction with equal debit and credit effects, ensuring accuracy.
3. It ignores liabilities.
4. It does not require journals.

Which transaction decreases cash?

1. Cash received from customers
2. Cash sales
3. Payment of rent in cash
4. Capital introduced in cash

Narration in a journal entry is:

1. A calculation of profit
2. A brief explanation of the transaction
3. The balance of an account
4. The name of the customer

Which accounting rule applies to Real Accounts?

1. Debit the receiver and credit the giver.
2. Debit what comes in and credit what goes out.
3. Debit expenses and credit incomes.
4. Credit assets and debit liabilities.

Which book contains classified accounts after journalizing?

1. Journal
2. Ledger
3. Cash Book
4. Invoice Book

Which account is credited when goods are purchased on credit?

1. Purchases Account
2. Cash Account
3. Creditor's Account
4. Discount Account

Which of the following transactions increases capital?

1. Drawings by the owner
2. Business loss
3. Additional capital introduced by the owner
4. Payment of salary

Which document provides evidence of a business transaction?

1. Voucher
2. Ledger
3. Trial Balance
4. Balance Sheet

Which of the following is a Nominal Account?

1. Machinery Account
2. Debtor Account
3. Salary Account
4. Furniture Account

Which account belongs to the category of Personal Accounts?

1. Building Account
2. Bank Account
3. Salary Account
4. Rent Account

Which accounting concept forms the basis of double-entry bookkeeping?

1. Money Measurement Concept
2. Business Entity Concept
3. Dual Aspect Concept
4. Cost Concept

Which account is credited when goods are sold for cash?

1. Purchases Account
2. Cash Account
3. Sales Account
4. Drawings Account

According to the rules of debit and credit, which account is debited when cash is received?

1. Cash Account
2. Capital Account
3. Sales Account
4. Purchase Account

The Journal is also known as the:

1. Book of Final Entry
2. Book of Original Entry
3. Cash Book
4. Ledger Book

What is the first step in the accounting process?

1. Preparing the Trial Balance
2. Recording transactions in the Journal
3. Preparing the Balance Sheet
4. Posting entries to the Ledger