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All questions of Introduction to Accounting and Bookkeeping for Class 9 Exam
Can you explain the answer of this question below:On January 1, Sohan paid rent Rs. 5,000. This can be classified as
- A:
An event
- B:
A transaction.
- C:
A transaction as well as an event.
- D:
Neither a transaction nor an event.
The answer is b.
On January 1, Sohan paid rent Rs. 5,000. This can be classified as
An event
A transaction.
A transaction as well as an event.
Neither a transaction nor an event.
 | Anand Dasgupta answered |
Explanation:
A transaction is an exchange of goods, services, or money between two or more parties. In this case, Sohan paid rent of Rs. 5,000 which involves an exchange of money between Sohan and his landlord. Hence, it is a transaction.
An event, on the other hand, is a happening or occurrence that may or may not involve an exchange of goods, services, or money. In this case, if Sohan had received the rent payment from his landlord, it would have been an event. However, since he paid the rent, it is not just an event.
Therefore, the correct answer is option 'B' - A transaction.
A transaction is an exchange of goods, services, or money between two or more parties. In this case, Sohan paid rent of Rs. 5,000 which involves an exchange of money between Sohan and his landlord. Hence, it is a transaction.
An event, on the other hand, is a happening or occurrence that may or may not involve an exchange of goods, services, or money. In this case, if Sohan had received the rent payment from his landlord, it would have been an event. However, since he paid the rent, it is not just an event.
Therefore, the correct answer is option 'B' - A transaction.
Net Profit or Loss will be derived at _______ stage of accounting- a)Classifying
- b)Interpretation
- c)Recording
- d)Summarising
Correct answer is 'D'. Can you explain this answer?
Net Profit or Loss will be derived at _______ stage of accounting
a)
Classifying
b)
Interpretation
c)
Recording
d)
Summarising
 | Alok Mehta answered |
The answer is D.Summarising stage is concerned with the preparation and presentation of the classified data in a manner useful to the internal as well as external users of financial statements. This process leads to the preparation of the following financial statements. Therefore, Net Profit or Loss is derived at the summarising stage.
Accounting has universal application for recording _______ and events and presenting suitable information for decision making- a)Entries
- b)Transactions
- c)Data
- d)Figures.
Correct answer is option 'B'. Can you explain this answer?
Accounting has universal application for recording _______ and events and presenting suitable information for decision making
a)
Entries
b)
Transactions
c)
Data
d)
Figures.
 | Kavita Joshi answered |
Accounting has universal application for recording transactions and events and presenting suitable information to aid decision-making regarding any type of economic activity ranging from a family function to functions of the national government. But hereinafter we shall concentrate only on business activities and their accounting because the objective of this study material is to provide a basic understanding on accounting for business activities. Nevertheless, it will give adequate knowledge to think coherently of accounting as a field of study for universal application.
On March 31, 2011 after sale of goods worth Rs. 2,000, he is left with the closing inventory of Rs. 10,000. This is- a)An event
- b)A transaction.
- c)A transaction as well as an event.
- d)Neither a transaction nor an event
Correct answer is 'A'. Can you explain this answer?
On March 31, 2011 after sale of goods worth Rs. 2,000, he is left with the closing inventory of Rs. 10,000. This is
a)
An event
b)
A transaction.
c)
A transaction as well as an event.
d)
Neither a transaction nor an event
 | Neha Yadav answered |
Correct answer is option A
Double Accounting System owes its origin to : a)Luca De Pacioli b)Adam Smithc)Kohlerd)Karl MarxCorrect answer is option 'A'. Can you explain this answer?
b)Adam Smith
c)Kohler
d)Karl Marx
Correct answer is option 'A'. Can you explain this answer?
 | Poonam Reddy answered |
Luca Pacioli, in venice (1494) is considered as the first book on double entry book-keeping. A portion of this book contains knowledge of business and book-keeping.
The main objectives of Book- Keeping are :- a)Complete Recording of Transactions
- b)Ascertainment of Financial Effect on the Business
- c)Analysis and interpretation of data
- d)(a) and (b) both
Correct answer is option 'D'. Can you explain this answer?
The main objectives of Book- Keeping are :
a)
Complete Recording of Transactions
b)
Ascertainment of Financial Effect on the Business
c)
Analysis and interpretation of data
d)
(a) and (b) both
| | Arjun Singhania answered |
- Objective of Book-keeping
- - To have a permanent record of each transaction of the business.
- - To show the financial effect on the entity of each transaction recorded.
- - To ascertain the combined effect of all the transactions (during an accounting period) on the financial position on a particular date.
- - To disclose the factors responsible for earning profit or suffering loss in a given period.
- - The amount recoverable by the business from others (sundry debtors) and payable to others (sundry creditors)
- - Determination of tax-liability of the business.
- - Prevention of errors and frauds.
- - Protection of assets.
- - Measure of exercising a system of control.
Which of these is not available in the Financial Statements of Company?- a)Total Sales
- b)Total Profit & Loss
- c)Capital
- d)Cost of Production
Correct answer is option 'D'. Can you explain this answer?
Which of these is not available in the Financial Statements of Company?
a)
Total Sales
b)
Total Profit & Loss
c)
Capital
d)
Cost of Production
 | Neha Sindal answered |
Simply cost of production isnt taken in consideration due to this is a expense related to manufacturing costs nd this doesn't includes in the trading or p/l ac or balance sheet that is there is a all new account for the firms who r involving in manufacturing business called manufacturing account
so this is not includes in financial statements
so this is not includes in financial statements
Users of accounting information include- a)Trade payables/ Suppliers
- b)Lenders.
- c)Customers.
- d)all of the above.
Correct answer is option 'D'. Can you explain this answer?
Users of accounting information include
a)
Trade payables/ Suppliers
b)
Lenders.
c)
Customers.
d)
all of the above.
 | Jayant Mishra answered |
The correct answer is 4 - all of the above.
Users of accounting information include various stakeholders who have an interest in a company's financial performance and position. These stakeholders can use accounting information to make decisions regarding their engagement with the company. The users of accounting information can include trade payables/suppliers, lenders, customers, investors, regulatory authorities, employees, management, and others. All of the options given in the question - trade payables/suppliers, lenders, and customers - are users of accounting information, but there are also many others.
Financial position of the business is ascertained on the basis of - a)Records prepared under book-keeping process.
- b)Trial balance.
- c)Accounting reports.
- d)None of the above.
Correct answer is option 'C'. Can you explain this answer?
Financial position of the business is ascertained on the basis of
a)
Records prepared under book-keeping process.
b)
Trial balance.
c)
Accounting reports.
d)
None of the above.
| | Arjun Singhania answered |
Accounting reports are compilations of financial information that are derived from the accounting records of a business. These can be brief, custom-made reports that are intended for specific purposes, such as a detailed analysis of sales by region, or the profitability of a specific product line. More commonly, accounting reports are considered to be equivalent to the financial statements. These statements include the following reports:
1. Income statement. States the revenues earned during a period, less expenses, to arrive at a profit or loss. This is the most commonly used accounting report, since it is used to judge the performance of a business.
2. Balance sheet. Shows the ending asset, liability, and equity balances as of the balance sheet date. It is used to judge the liquidity and financial reserves of a business.
3. Statement of cash flows. Shows the sources and uses of cash related to operations, financing, and investments. Can be the most accurate source of information regarding the cash-generating ability of an entity.
A number of disclosures may accompany the financial statements, in the form of footnotes. This is more likely to be the case when the financial statements have been audited.
Interpreting Financial Statements means:- a)Methodical classification of the data given in the financial statements.
- b)Preparation and presentation of the classified data in a manner useful to the users of financial statements.
- c)Systematic analysis of the recorded data so as to put information in usable from.
- d)Explaining the meaning and significance of the relationship of analysis of accounting data.
Correct answer is 'D'. Can you explain this answer?
Interpreting Financial Statements means:
a)
Methodical classification of the data given in the financial statements.
b)
Preparation and presentation of the classified data in a manner useful to the users of financial statements.
c)
Systematic analysis of the recorded data so as to put information in usable from.
d)
Explaining the meaning and significance of the relationship of analysis of accounting data.
| | Alok Mehta answered |
Interpretation of financial statements are an attempt to determine the significance and meaning of the financial statement data so that a forecast may be made of the prospects for future earnings, ability to pay interest, debt maturities, both current as well as long term, and profitability of sound dividend policy.
Interpretation of financial statements involves many processes like arrangement, analysis, establishing relationship between available facts and drawing conclusions on that basis.
Book-keeping is mainly concerned with - a)Recording of financial data.
- b)Designing the systems in recording, classifying and summarizing the recorded data.
- c)Interpreting the data for internal and external users.
- d)None of the above.
Correct answer is option 'A'. Can you explain this answer?
Book-keeping is mainly concerned with
a)
Recording of financial data.
b)
Designing the systems in recording, classifying and summarizing the recorded data.
c)
Interpreting the data for internal and external users.
d)
None of the above.
| | Kavita Joshi answered |
According to North Cott ,“Book-keeping is an art of recording in books of accounts the monetary aspect of commercial or financial transactions”. It is mainly concerned with record keeping or maintenance of books of accounts.
Financial statements do not consider- a)Assets expressed in monetary terms.
- b)Liabilities expressed in monetary terms.
- c)Only assets expressed in non-monetary terms.
- d)Assets and liabilities expressed in non-monetary terms
Correct answer is option 'D'. Can you explain this answer?
Financial statements do not consider
a)
Assets expressed in monetary terms.
b)
Liabilities expressed in monetary terms.
c)
Only assets expressed in non-monetary terms.
d)
Assets and liabilities expressed in non-monetary terms
 | Pallabi Khanna answered |
Nonmonetary items are those assets and liabilities appearing on the balance sheet that are not cash, or cannot be readily converted into cash. ... Nonmonetary liabilities include those obligations that are not payable in cash, or items that will adjust an expense.
Financial Statements are a part of : - a)Accounting
- b)Book- Keeping
- c)Both
- d)None
Correct answer is option 'A'. Can you explain this answer?
Financial Statements are a part of :
a)
Accounting
b)
Book- Keeping
c)
Both
d)
None
 | Freedom Institute answered |
Financial statement is a formal record of the financial activities and position of a business, person or other entity. Financial statement are major part of accounting as accounting is incomplete without financial statements.
Net Profit or Loss will be derived at _______ stage of accounting- a)Classifying
- b)Interpretation
- c)Recording
- d)Summarising
Correct answer is option 'D'. Can you explain this answer?
Net Profit or Loss will be derived at _______ stage of accounting
a)
Classifying
b)
Interpretation
c)
Recording
d)
Summarising
| | Jayant Mishra answered |
Summarising stage is concerned with the preparation and presentation of the classified data in a manner useful to the internal as well as external users of financial statements. This process leads to the preparation of the following financial statements. Therefore, Net Profit or Loss is derived at the summarising stage.
The direct advantage of accounting do not include: - a)Preparation of financial statements
- b)Competitive advantage
- c)Ascertainment of profit or loss
- d)Information to interested groups
Correct answer is 'B'. Can you explain this answer?
The direct advantage of accounting do not include:
a)
Preparation of financial statements
b)
Competitive advantage
c)
Ascertainment of profit or loss
d)
Information to interested groups
| | Arun Khanna answered |
Accounting is defined as the art of recording, classifying, summarizing, analyzing, interpretation and communicating the results of transactions and events which are of financial character. Hence, it includes preparation of final accounts, ascertainment of profit or loss and its communication to users, but it does not includes any kind of competitive advantage.
Which of the following is correct? Owner’s Equity is : - a)(Current Asset + Fixed Asset) + (Current Liabilities + Long term Liabilities)
- b)(Current Asset + Fixed Asset) – (Current Liabilities + Long term Liabilities)
- c)(Current Asset – Fixed Asset) – (Current Liabilities + Long term Liabilities)
- d)None of the above.
Correct answer is option 'B'. Can you explain this answer?
Which of the following is correct? Owner’s Equity is :
a)
(Current Asset + Fixed Asset) + (Current Liabilities + Long term Liabilities)
b)
(Current Asset + Fixed Asset) – (Current Liabilities + Long term Liabilities)
c)
(Current Asset – Fixed Asset) – (Current Liabilities + Long term Liabilities)
d)
None of the above.
| | Deepika Nambiar answered |
It seems like you have not provided any options for us to evaluate. Could you please provide the options you want us to choose from?
If owner’s capital is Rs. 50,000 liability is Rs. 30,000 and fixed assets is Rs. 70,000, then what is the value of current assets?- a)Rs. 10,000
- b)Rs. 40,000
- c)Rs. 80,000
- d)Rs. 1,00,000
Correct answer is 'A'. Can you explain this answer?
If owner’s capital is Rs. 50,000 liability is Rs. 30,000 and fixed assets is Rs. 70,000, then what is the value of current assets?
a)
Rs. 10,000
b)
Rs. 40,000
c)
Rs. 80,000
d)
Rs. 1,00,000
| | Malavika Basak answered |
According to the accounting equation:
Owner's capital= Assets- Liabilities
50,000= (70,000+ current assets)- 30,000
Current Assets= Rs. 10,000
Owner's capital= Assets- Liabilities
50,000= (70,000+ current assets)- 30,000
Current Assets= Rs. 10,000
Match the following items from column A with column B.
- a)1-a, 2-b, 3-c, 4-d
- b) 1-b, 2-a, 3-d, 4-c
- c)1-a, 2-c, 3-b, 4-d
- d)1-d, 2-c, 3-a, 4-b
Correct answer is option 'B'. Can you explain this answer?
Match the following items from column A with column B.
a)
1-a, 2-b, 3-c, 4-d
b)
1-b, 2-a, 3-d, 4-c
c)
1-a, 2-c, 3-b, 4-d
d)
1-d, 2-c, 3-a, 4-b
| | Bhavadharini answered |
First , start from column B. First option is language of business. Accounting is the language of business. Hence 2-a. Even by solving only one, we can conclude that option B is right answer
Interpreting Financial Statements means:- a)Methodical classification of the data given in the financial statements.
- b)Preparation and presentation of the classified data in a manner useful to the users of financial statements.
- c)Systematic analysis of the recorded data so as to put information in usable from.
- d)Explaining the meaning and significance of the relationship of analysis of accounting data.
Correct answer is option 'D'. Can you explain this answer?
Interpreting Financial Statements means:
a)
Methodical classification of the data given in the financial statements.
b)
Preparation and presentation of the classified data in a manner useful to the users of financial statements.
c)
Systematic analysis of the recorded data so as to put information in usable from.
d)
Explaining the meaning and significance of the relationship of analysis of accounting data.
| | Alok Mehta answered |
Financial statement analysis (or financial analysis) is the process of reviewing and analyzing a company's financial statements to make better economic decisions. These statements include the income statement, balance sheet, statement of cash flows, and a statement of changes in equity.
On January 1, Sohan paid rent Rs. 5,000. This can be classified as - a)An event
- b)A transaction.
- c)A transaction as well as an event.
- d)Neither a transaction nor an event.
Correct answer is option 'B'. Can you explain this answer?
On January 1, Sohan paid rent Rs. 5,000. This can be classified as
a)
An event
b)
A transaction.
c)
A transaction as well as an event.
d)
Neither a transaction nor an event.
 | Srsps answered |
The correct answer is (b) A transaction.
A transaction is an economic event that involves the transfer of money or goods between two parties. In this case, Sohan paid rent of Rs. 5,000. This can be classified as a transaction because:
A transaction is an economic event that involves the transfer of money or goods between two parties. In this case, Sohan paid rent of Rs. 5,000. This can be classified as a transaction because:
1. Two parties are involved: Sohan (the payer) and the landlord (the receiver).
2. Transfer of value: Sohan is transferring Rs. 5,000 to the landlord in exchange for the use of the rented property.
3. Recordable: This transaction can be recorded in the financial books (e.g., rent expense account for Sohan and rent income account for the landlord).
An event, on the other hand, is a happening or occurrence that may or may not have financial consequences. In this case, the payment of rent is a transaction and not just an event because it involves a transfer of value between parties and can be recorded in financial books.
2. Transfer of value: Sohan is transferring Rs. 5,000 to the landlord in exchange for the use of the rented property.
3. Recordable: This transaction can be recorded in the financial books (e.g., rent expense account for Sohan and rent income account for the landlord).
An event, on the other hand, is a happening or occurrence that may or may not have financial consequences. In this case, the payment of rent is a transaction and not just an event because it involves a transfer of value between parties and can be recorded in financial books.
Financial statements users include: - a)Shareholders
- b)Government
- c)Vendors
- d)All of the above
Correct answer is option 'D'. Can you explain this answer?
Financial statements users include:
a)
Shareholders
b)
Government
c)
Vendors
d)
All of the above
| | Freedom Institute answered |
The correct answer is (d) All of the above. Financial statements are essential tools that provide valuable information to various users. These users can be classified into internal and external users. Here, let's explain each of them in detail:
Shareholders
- Shareholders are the owners of a company and have a direct interest in its financial performance.
- Financial statements provide information about a company's profitability, financial stability, and potential for growth, which are crucial factors for shareholders when making investment decisions.
- Shareholders use financial statements to assess the company's management effectiveness and the return on their investment.
Government
- Governments use financial statements to ensure companies comply with tax laws and regulations.
- Financial statements provide the necessary information for tax authorities to determine the amount of taxes owed by a company.
- Governments also use financial statements to assess the economic health of a country, as they provide insights into various industries and sectors.
Vendors
- Vendors, or suppliers, provide goods and services to a company, and they need to ensure that the company can pay for these goods and services.
- Financial statements help vendors assess a company's creditworthiness and financial stability.
- By analyzing financial statements, vendors can determine whether to extend credit to a company, negotiate payment terms, or require upfront payment for goods and services.
In conclusion, financial statements are essential tools for various users, including shareholders, government, and vendors. These users rely on financial statements to make informed decisions and ensure the financial stability and growth of companies, industries, and the overall economy.
Shareholders
- Shareholders are the owners of a company and have a direct interest in its financial performance.
- Financial statements provide information about a company's profitability, financial stability, and potential for growth, which are crucial factors for shareholders when making investment decisions.
- Shareholders use financial statements to assess the company's management effectiveness and the return on their investment.
Government
- Governments use financial statements to ensure companies comply with tax laws and regulations.
- Financial statements provide the necessary information for tax authorities to determine the amount of taxes owed by a company.
- Governments also use financial statements to assess the economic health of a country, as they provide insights into various industries and sectors.
Vendors
- Vendors, or suppliers, provide goods and services to a company, and they need to ensure that the company can pay for these goods and services.
- Financial statements help vendors assess a company's creditworthiness and financial stability.
- By analyzing financial statements, vendors can determine whether to extend credit to a company, negotiate payment terms, or require upfront payment for goods and services.
In conclusion, financial statements are essential tools for various users, including shareholders, government, and vendors. These users rely on financial statements to make informed decisions and ensure the financial stability and growth of companies, industries, and the overall economy.
If owner’s capital is Rs. 50,000 liability is Rs. 30,000 and fixed assets is Rs. 70,000, then what is the value of current assets?- a)Rs. 10,000
- b)Rs. 40,000
- c)Rs. 80,000
- d)Rs. 1,00,000
Correct answer is option 'A'. Can you explain this answer?
If owner’s capital is Rs. 50,000 liability is Rs. 30,000 and fixed assets is Rs. 70,000, then what is the value of current assets?
a)
Rs. 10,000
b)
Rs. 40,000
c)
Rs. 80,000
d)
Rs. 1,00,000
| | Jayant Mishra answered |
According to the accounting equation:
Owner's capital= Assets- Liabilities
50,000= (70,000+ current assets)- 30,000
Current Assets= Rs. 10,000
Purposes of an accounting system include all the following except- a)Interpret and record the effects of business transaction.
- b)Classify the effects of transaction to facilitate the preparation of reports.
- c)Summarize and communicate information to decision makers.
- d)Dictate the specific types of business enterprise transactions that the enterprises may engage in.
Correct answer is option 'D'. Can you explain this answer?
Purposes of an accounting system include all the following except
a)
Interpret and record the effects of business transaction.
b)
Classify the effects of transaction to facilitate the preparation of reports.
c)
Summarize and communicate information to decision makers.
d)
Dictate the specific types of business enterprise transactions that the enterprises may engage in.
| | Alok Mehta answered |
The purpose of accounting is to accumulate and report on financial information about the performance, financial position, and cash flows of a business. This information is then used to reach decisions about how to manage the business, or invest in it, or lend money to it. This information is accumulated in accounting records with accounting transactions, which are recorded either through such standardized business transactions as customer invoicing or supplier invoices, or through more specialized transactions, known as journal entries.
Once this financial information has been stored in the accounting records, it is usually compiled into financial statements, which include the following documents:
Income statement
Balance sheet
Statement of cash flows
Statement of retained earnings
Disclosures that accompany the financial statements
Financial statements are assembled under certain sets of rules, known as accounting frameworks, of which the best known are Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). The results shown in financial statements can vary somewhat, depending on the framework used. The framework that a business uses depends upon which one the recipient of the financial statements wants. Thus, a European investor might want to see financial statements based on IFRS, while an American investor might want to see statements that comply with GAAP.
The accountant may generate additional reports for special purposes, such as determining the profit on sale of a product, or the revenues generated from a particular sales region. These are usually considered to be managerial reports, rather than the financial reports issued to outsiders.
Thus, the purpose of accounting centers on the collection and subsequent reporting of financial information.
________ of American Institute of Certified Public Accountants enumerated the functions of Accounting:- a)Accounting Principles Board
- b)Accounting Standards Board
- c)Accounting Concepts Board
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
________ of American Institute of Certified Public Accountants enumerated the functions of Accounting:
a)
Accounting Principles Board
b)
Accounting Standards Board
c)
Accounting Concepts Board
d)
None of these
| | Arjun Singhania answered |
The Accounting Principles Board (APB) was the former authoritative body of the American Institute of Certified Public Accountants (AICPA) formed in 1959. It was replaced in 1973 by the Financial Accounting Standards Board (FASB). The purpose of the APB was to issue guidelines and rules on accounting principles. Some of the opinions released by the APB still stand as part of the Generally Accepted Accounting Principles (GAAP), but most have been either amended or entirely superseded by FASB statements.
The objective of wealth maximization takes into account - a) Amount of returns expected
- b) Timing of anticipated returns
- c) Risk associated with uncertainty of returns
- d) All of the above
Correct answer is option 'D'. Can you explain this answer?
The objective of wealth maximization takes into account
a)
Amount of returns expected
b)
Timing of anticipated returns
c)
Risk associated with uncertainty of returns
d)
All of the above
| | Ruchi Mishra answered |
Wealth maximization is a modern approach to financial management. Maximization of profit used to be the main aim of a business and financial management till the concept of wealth maximization came into being. It is a superior goal compared to profit maximization as it takes broader arena into consideration.
Gross Book Value of a fixed assets is its- a)Market Value
- b)Realisable Value
- c)cost less depreciation
- d)Historical Cost
Correct answer is option 'D'. Can you explain this answer?
Gross Book Value of a fixed assets is its
a)
Market Value
b)
Realisable Value
c)
cost less depreciation
d)
Historical Cost
 | Nipun Tuteja answered |
- Gross Book Value refers to the original cost of acquiring a fixed asset.
- It is recorded at the Historical Cost, which is the purchase price or construction cost.
- This value does not account for depreciation or any market fluctuations.
- Depreciation is later subtracted from the gross book value to find the net book value.
Therefore, the correct answer is D: Historical Cost.
All of the following are functions of Accounting except- a)Decision making.
- b)Measurement.
- c)Forecasting.
- d)Ledger posting.
Correct answer is option 'D'. Can you explain this answer?
All of the following are functions of Accounting except
a)
Decision making.
b)
Measurement.
c)
Forecasting.
d)
Ledger posting.
 | Aman Chaudhary answered |
Ledger posting is a 'book-keeping' exercise whereas the others are purely accounting in nature, which are done in accordance with various accounting standards, policies, etc
A system in which accounting entries are made on the basis of amounts having become due for payment or receipt is called - a)Accrual Concept
- b)Cash Concept
- c)On-going Concept
- d)Matching Concept
Correct answer is option 'A'. Can you explain this answer?
A system in which accounting entries are made on the basis of amounts having become due for payment or receipt is called
a)
Accrual Concept
b)
Cash Concept
c)
On-going Concept
d)
Matching Concept
 | KP Classes answered |
The correct answer is A: Accrual Concept.
- In the accrual concept, accounting entries are made when transactions occur, regardless of when cash is received or paid.
- This concept ensures that revenues and expenses are recorded in the period they are earned or incurred, not when cash changes hands.
- It provides a more accurate picture of a company's financial position and performance by matching income with related expenses in the same period.
Which of the following is an event? - a)Sale of goods for Rs.5,000
- b)Closing stock of worth Rs.4,000
- c)Purchase of goods for Rs.8,000
- d)Rent paid Rs.2,000
Correct answer is option 'B'. Can you explain this answer?
Which of the following is an event?
a)
Sale of goods for Rs.5,000
b)
Closing stock of worth Rs.4,000
c)
Purchase of goods for Rs.8,000
d)
Rent paid Rs.2,000
| | KP Classes answered |
In accounting:
- A transaction involves a transfer of money or goods/services and affects the financial position of a business, such as purchases, sales, or payments.
- An event is an occurrence that affects the financial position but does not necessarily involve a transaction or exchange of value.
Analysis of options:
- a) Sale of goods for Rs.5,000 – This is a transaction, as it involves the exchange of goods for money.
- b) Closing stock of worth Rs.4,000 – This is an event. It reflects the value of remaining inventory at the end of an accounting period. No exchange of goods or money takes place at this point.
- c) Purchase of goods for Rs.8,000 – This is a transaction, as it involves acquiring goods in exchange for money.
- d) Rent paid Rs.2,000 – This is a transaction, as it involves payment of money for a service.
Therefore, only option (b) qualifies as an event.
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