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The credit balance of Rs. 2,000 in the bank column of the cash book was carried forwarded as its debit balance. When overdraft as per pass book is starting point: - a)Rs. 2,000 will be deducted
- b)Rs. 2,000 will be added
- c)Rs. 4,000 will be deducted
- d)Rs. 4,000 will be added
Correct answer is option 'C'. Can you explain this answer?
The credit balance of Rs. 2,000 in the bank column of the cash book was carried forwarded as its debit balance. When overdraft as per pass book is starting point:
a)
Rs. 2,000 will be deducted
b)
Rs. 2,000 will be added
c)
Rs. 4,000 will be deducted
d)
Rs. 4,000 will be added
|
Sonal Patel answered |
Explanation:
When the credit balance of Rs. 2,000 in the bank column of the cash book was carried forward as its debit balance, it means that the cash book shows an overdraft balance of Rs. 2,000 instead of a credit balance.
Now, we need to compare this balance with the balance as per pass book. If the pass book shows an overdraft balance, then we need to deduct it from the cash book balance. If the pass book shows a credit balance, then we need to add it to the cash book balance.
In this question, the starting point is given as the pass book showing an overdraft balance. Therefore, we need to deduct this balance from the cash book balance.
So, the calculation would be:
Cash book balance (overdraft) = Rs. 2,000 (debit balance)
Pass book balance (overdraft) = Given
Overdraft as per pass book = Pass book balance - Cash book balance
Since the pass book balance is an overdraft balance, it would be higher than the cash book balance (overdraft). Therefore, we need to deduct the cash book balance from the pass book balance.
Overdraft as per pass book = Pass book balance - Cash book balance
Overdraft as per pass book = (Given) - Rs. 2,000
Overdraft as per pass book = Rs. (Given - 2,000)
Hence, option C. Rs. 4,000 will be deducted is the correct answer.
When the credit balance of Rs. 2,000 in the bank column of the cash book was carried forward as its debit balance, it means that the cash book shows an overdraft balance of Rs. 2,000 instead of a credit balance.
Now, we need to compare this balance with the balance as per pass book. If the pass book shows an overdraft balance, then we need to deduct it from the cash book balance. If the pass book shows a credit balance, then we need to add it to the cash book balance.
In this question, the starting point is given as the pass book showing an overdraft balance. Therefore, we need to deduct this balance from the cash book balance.
So, the calculation would be:
Cash book balance (overdraft) = Rs. 2,000 (debit balance)
Pass book balance (overdraft) = Given
Overdraft as per pass book = Pass book balance - Cash book balance
Since the pass book balance is an overdraft balance, it would be higher than the cash book balance (overdraft). Therefore, we need to deduct the cash book balance from the pass book balance.
Overdraft as per pass book = Pass book balance - Cash book balance
Overdraft as per pass book = (Given) - Rs. 2,000
Overdraft as per pass book = Rs. (Given - 2,000)
Hence, option C. Rs. 4,000 will be deducted is the correct answer.
The Cash book showed an overdraft of Rs.1,500 but the pass book made up to same date should that cheques of Rs. 100, Rs. 50 and Rs. 125 had not been presented for payment and a cheque of Rs. 400 had not been cleared. The balance as per the Cash Book will be:
- a)Rs. 1,100
- b)Rs. 1,625
- c)Rs. 2,175
- d)Rs. 1,375
Correct answer is option 'B'. Can you explain this answer?
The Cash book showed an overdraft of Rs.1,500 but the pass book made up to same date should that cheques of Rs. 100, Rs. 50 and Rs. 125 had not been presented for payment and a cheque of Rs. 400 had not been cleared. The balance as per the Cash Book will be:
a)
Rs. 1,100
b)
Rs. 1,625
c)
Rs. 2,175
d)
Rs. 1,375
|
|
Rithika Nair answered |
Given:
Overdraft in Cash Book = Rs. 1,500
Cheques not presented for payment = Rs. 100 + Rs. 50 + Rs. 125 = Rs. 275
Cheque not cleared = Rs. 400
To find: Balance as per Cash Book
Solution:
Step 1: Adjust the cheques not presented for payment
Cash Book balance = Overdraft - Cheques not presented for payment
Cash Book balance = Rs. 1,500 - Rs. 275 = Rs. 1,225
Step 2: Adjust the cheque not cleared
Cash Book balance = Cash Book balance - Cheque not cleared
Cash Book balance = Rs. 1,225 - Rs. 400 = Rs. 825
Step 3: Compare with Pass Book balance
As per the Pass Book, there are no transactions that have not been recorded in the Cash Book. Therefore, the balance as per Pass Book is the actual balance.
Pass Book balance = Cash Book balance + Overdraft
Pass Book balance = Rs. 825 + Rs. 1,500 = Rs. 2,325
Therefore, the balance as per Cash Book is Rs. 825 and the correct option is (b) Rs. 1,625.
Overdraft in Cash Book = Rs. 1,500
Cheques not presented for payment = Rs. 100 + Rs. 50 + Rs. 125 = Rs. 275
Cheque not cleared = Rs. 400
To find: Balance as per Cash Book
Solution:
Step 1: Adjust the cheques not presented for payment
Cash Book balance = Overdraft - Cheques not presented for payment
Cash Book balance = Rs. 1,500 - Rs. 275 = Rs. 1,225
Step 2: Adjust the cheque not cleared
Cash Book balance = Cash Book balance - Cheque not cleared
Cash Book balance = Rs. 1,225 - Rs. 400 = Rs. 825
Step 3: Compare with Pass Book balance
As per the Pass Book, there are no transactions that have not been recorded in the Cash Book. Therefore, the balance as per Pass Book is the actual balance.
Pass Book balance = Cash Book balance + Overdraft
Pass Book balance = Rs. 825 + Rs. 1,500 = Rs. 2,325
Therefore, the balance as per Cash Book is Rs. 825 and the correct option is (b) Rs. 1,625.
Balance as per pass book Rs. 20,000 Rs. 4,000 were directly deposited by a customer into the bank. Then the balance as per cash book is:
- a)Rs. 24,000
- b)Rs. 18,000
- c)Rs. 16,000
- d)Rs. 22,000
Correct answer is option 'C'. Can you explain this answer?
Balance as per pass book Rs. 20,000 Rs. 4,000 were directly deposited by a customer into the bank. Then the balance as per cash book is:
a)
Rs. 24,000
b)
Rs. 18,000
c)
Rs. 16,000
d)
Rs. 22,000
|
KP Classes answered |
Calculation:
- Balance as per pass book: Rs. 20,000
- Direct deposit by customer: Rs. 4,000
Calculation for balance as per cash book:
- Balance as per pass book: Rs. 20,000
- Direct deposit: Rs. 4,000
- Total balance: Rs. 20,000 (from pass book) + Rs. 4,000 (direct deposit) = Rs. 24,000
Therefore, the balance as per cash book is Rs. 24,000.
- Balance as per pass book: Rs. 20,000
- Direct deposit by customer: Rs. 4,000
Calculation for balance as per cash book:
- Balance as per pass book: Rs. 20,000
- Direct deposit: Rs. 4,000
- Total balance: Rs. 20,000 (from pass book) + Rs. 4,000 (direct deposit) = Rs. 24,000
Therefore, the balance as per cash book is Rs. 24,000.
The Trial Balance of M/S RAM & Co. shows closing Stock of Rs. 30,000. It will be recorded in : - a)Trading account
- b)Profit and Loss account
- c)Balance sheet
- d)Both (a) and (c)
Correct answer is option 'C'. Can you explain this answer?
The Trial Balance of M/S RAM & Co. shows closing Stock of Rs. 30,000. It will be recorded in :
a)
Trading account
b)
Profit and Loss account
c)
Balance sheet
d)
Both (a) and (c)
|
Harshad Nair answered |
Please provide the necessary data to prepare the trial balance.
The credit balance as per pass book of Mr. X was Rs. 65,600. Cheques issued but not presented for payment Rs. 75,800. Cheques deposited by one of the customers of the bank but wrongly credited in Mr. X account Rs. 20,600. The balance as per cash book will be:-- a)Rs. 30,800 Debit
- b)Rs. 30,800 overdraft
- c)Rs. 1,20,800 Debit
- d)Rs. 10,400 overdraft.
Correct answer is option 'B'. Can you explain this answer?
The credit balance as per pass book of Mr. X was Rs. 65,600. Cheques issued but not presented for payment Rs. 75,800. Cheques deposited by one of the customers of the bank but wrongly credited in Mr. X account Rs. 20,600. The balance as per cash book will be:-
a)
Rs. 30,800 Debit
b)
Rs. 30,800 overdraft
c)
Rs. 1,20,800 Debit
d)
Rs. 10,400 overdraft.
|
Raghavendra Choudhury answered |
Calculation of Cash Book Balance
Credit balance as per pass book = Rs. 65,600
Cheques issued but not presented for payment = Rs. 75,800
Cheques deposited by a customer but wrongly credited in Mr. X account = Rs. 20,600
To calculate the balance as per cash book, we need to adjust the above items in the credit balance as per pass book.
Step 1: Adjust the cheques issued but not presented for payment
Credit balance as per pass book = Rs. 65,600
Less: Cheques issued but not presented for payment = Rs. 75,800
Adjusted balance = Rs. (10,200) (overdraft)
Step 2: Adjust the cheques deposited by a customer but wrongly credited in Mr. X account
Credit balance as per pass book = Rs. (10,200) (overdraft)
Add: Cheques deposited by a customer but wrongly credited in Mr. X account = Rs. 20,600
Adjusted balance = Rs. 10,400 (overdraft)
Therefore, the balance as per cash book will be Rs. 10,400 (overdraft).
Credit balance as per pass book = Rs. 65,600
Cheques issued but not presented for payment = Rs. 75,800
Cheques deposited by a customer but wrongly credited in Mr. X account = Rs. 20,600
To calculate the balance as per cash book, we need to adjust the above items in the credit balance as per pass book.
Step 1: Adjust the cheques issued but not presented for payment
Credit balance as per pass book = Rs. 65,600
Less: Cheques issued but not presented for payment = Rs. 75,800
Adjusted balance = Rs. (10,200) (overdraft)
Step 2: Adjust the cheques deposited by a customer but wrongly credited in Mr. X account
Credit balance as per pass book = Rs. (10,200) (overdraft)
Add: Cheques deposited by a customer but wrongly credited in Mr. X account = Rs. 20,600
Adjusted balance = Rs. 10,400 (overdraft)
Therefore, the balance as per cash book will be Rs. 10,400 (overdraft).
Favourable balance as per Cash Book Rs. 5,000. Debit side of Cash Book under cast by Rs. 2.000. Cheque deposited into bank Rs. 3,000 dishonoured but no entry for dishonour is made in cash book. Balance as per Pass Book is :- a)Rs. 4,000
- b)Rs. 10,000
- c)Rs. 6,000
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
Favourable balance as per Cash Book Rs. 5,000. Debit side of Cash Book under cast by Rs. 2.000. Cheque deposited into bank Rs. 3,000 dishonoured but no entry for dishonour is made in cash book. Balance as per Pass Book is :
a)
Rs. 4,000
b)
Rs. 10,000
c)
Rs. 6,000
d)
None of the above
|
|
Subhankar Sen answered |
Calculation of Correct Balance as per Pass Book
Favourable balance as per Cash Book = Rs. 5,000
Debit side of Cash Book under cast by Rs. 2,000.
Therefore, the revised balance as per Cash Book = Rs. (5,000 - 2,000) = Rs. 3,000.
Cheque deposited into bank Rs. 3,000 dishonoured but no entry for dishonour is made in cash book.
Hence, the balance as per Cash Book should be further reduced by Rs. 3,000.
Therefore, the actual balance as per Cash Book = Rs. (3,000 - 3,000) = Rs. 0.
Now, we need to reconcile the Pass Book balance with the actual balance as per Cash Book.
The Pass Book balance will only reflect the amount of Rs. 3,000 that was deposited into the bank and not the dishonour.
Hence, the Pass Book balance will be Rs. (5,000 + 3,000) = Rs. 8,000.
However, since the actual balance as per Cash Book is Rs. 0, the correct balance as per Pass Book will be reduced by Rs. 8,000.
Therefore, the correct balance as per Pass Book = Rs. (8,000 - 8,000) = Rs. 4,000.
Hence, the correct answer is option 'A' - Rs. 4,000.
Favourable balance as per Cash Book = Rs. 5,000
Debit side of Cash Book under cast by Rs. 2,000.
Therefore, the revised balance as per Cash Book = Rs. (5,000 - 2,000) = Rs. 3,000.
Cheque deposited into bank Rs. 3,000 dishonoured but no entry for dishonour is made in cash book.
Hence, the balance as per Cash Book should be further reduced by Rs. 3,000.
Therefore, the actual balance as per Cash Book = Rs. (3,000 - 3,000) = Rs. 0.
Now, we need to reconcile the Pass Book balance with the actual balance as per Cash Book.
The Pass Book balance will only reflect the amount of Rs. 3,000 that was deposited into the bank and not the dishonour.
Hence, the Pass Book balance will be Rs. (5,000 + 3,000) = Rs. 8,000.
However, since the actual balance as per Cash Book is Rs. 0, the correct balance as per Pass Book will be reduced by Rs. 8,000.
Therefore, the correct balance as per Pass Book = Rs. (8,000 - 8,000) = Rs. 4,000.
Hence, the correct answer is option 'A' - Rs. 4,000.
Debit balance as per Cash Book of ABC Enterprises as on 31.3.2006 is Rs. 1,500.Cheques deposited but not cleared amounts to Rs. 100 and Cheques issued but not presented of Rs. 150. The bank allowed interest amounting Rs. 50 and collected dividend Rs. 50 on behalf of ABC Enterprises. Balance as per pass book should be- a)1,600.
- b)1,450.
- c)1,850.
- d)1,650.
Correct answer is option 'D'. Can you explain this answer?
Debit balance as per Cash Book of ABC Enterprises as on 31.3.2006 is Rs. 1,500.Cheques deposited but not cleared amounts to Rs. 100 and Cheques issued but not presented of Rs. 150. The bank allowed interest amounting Rs. 50 and collected dividend Rs. 50 on behalf of ABC Enterprises. Balance as per pass book should be
a)
1,600.
b)
1,450.
c)
1,850.
d)
1,650.
|
Freedom Institute answered |
When drawing up a Bank Reconciliation Statement, if you start with a debit balance as per the Bank Statement, the unpresented cheques should be:- a)Added;
- b)Deducted;
- c)Not required to be adjusted.
- d)None of the above.
Correct answer is option 'A'. Can you explain this answer?
When drawing up a Bank Reconciliation Statement, if you start with a debit balance as per the Bank Statement, the unpresented cheques should be:
a)
Added;
b)
Deducted;
c)
Not required to be adjusted.
d)
None of the above.
|
|
Devanshi Rane answered |
Bank Reconciliation Statement and Debit Balance
Bank Reconciliation Statement is a statement that reconciles the bank balance as per the company's books with the bank balance as per the bank statement. The statement helps in identifying the discrepancies and errors between the two balances.
Debit Balance occurs when the bank balance as per the bank statement is more than the bank balance as per the company's books. In this case, the company owes money to the bank.
Unpresented Cheques
Unpresented Cheques are the cheques issued by the company but not yet presented to the bank for payment. These cheques are included in the company's books, but not in the bank statement, resulting in a difference between the two balances.
Adjustment of Unpresented Cheques
When drawing up a Bank Reconciliation Statement with a debit balance as per the Bank Statement, the unpresented cheques should be added to the bank balance as per the company's books. This adjustment will increase the bank balance, bringing it closer to the bank balance as per the bank statement.
Reason for Adding Unpresented Cheques
Unpresented Cheques represent the company's liabilities, and hence, should be added to the bank balance as per the company's books. The company owes money to the bank for these cheques, and hence, the bank balance should be increased accordingly.
Conclusion
In conclusion, when drawing up a Bank Reconciliation Statement with a debit balance as per the Bank Statement, the unpresented cheques should be added to the bank balance as per the company's books. This adjustment will bring the bank balance closer to the bank balance as per the bank statement, helping the company identify any discrepancies and errors.
Bank Reconciliation Statement is a statement that reconciles the bank balance as per the company's books with the bank balance as per the bank statement. The statement helps in identifying the discrepancies and errors between the two balances.
Debit Balance occurs when the bank balance as per the bank statement is more than the bank balance as per the company's books. In this case, the company owes money to the bank.
Unpresented Cheques
Unpresented Cheques are the cheques issued by the company but not yet presented to the bank for payment. These cheques are included in the company's books, but not in the bank statement, resulting in a difference between the two balances.
Adjustment of Unpresented Cheques
When drawing up a Bank Reconciliation Statement with a debit balance as per the Bank Statement, the unpresented cheques should be added to the bank balance as per the company's books. This adjustment will increase the bank balance, bringing it closer to the bank balance as per the bank statement.
Reason for Adding Unpresented Cheques
Unpresented Cheques represent the company's liabilities, and hence, should be added to the bank balance as per the company's books. The company owes money to the bank for these cheques, and hence, the bank balance should be increased accordingly.
Conclusion
In conclusion, when drawing up a Bank Reconciliation Statement with a debit balance as per the Bank Statement, the unpresented cheques should be added to the bank balance as per the company's books. This adjustment will bring the bank balance closer to the bank balance as per the bank statement, helping the company identify any discrepancies and errors.
Credit balance as per cash Book Rs. 10,000
Bank charged interest Rs. 150
Cheques issued but not presented for payment Rs. 2,500
Balance as per pass Book will be :
- a)Rs. 7,650
- b)Rs. 12,350
- c)Rs. 12,650
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
Credit balance as per cash Book Rs. 10,000
Bank charged interest Rs. 150
Cheques issued but not presented for payment Rs. 2,500
Balance as per pass Book will be :
Bank charged interest Rs. 150
Cheques issued but not presented for payment Rs. 2,500
Balance as per pass Book will be :
a)
Rs. 7,650
b)
Rs. 12,350
c)
Rs. 12,650
d)
None of these
|
|
Pj Commerce Academy answered |
Calculation of Balance as per Pass Book
- Credit balance as per Cash Book: Rs. 10,000
- Bank charged interest: Rs. 150
- Cheques issued but not presented for payment: Rs. 2,500
Calculation:
- Opening balance (Credit balance as per Cash Book): Rs. 10,000
- Add: Bank charged interest: Rs. 150
- Less: Cheques issued but not presented for payment: Rs. 2,500
Balance as per Pass Book:
10,000 + 150 - 2,500
= Rs. 7,650
Therefore, the correct answer is A: Rs. 7,650.
- Credit balance as per Cash Book: Rs. 10,000
- Bank charged interest: Rs. 150
- Cheques issued but not presented for payment: Rs. 2,500
Calculation:
- Opening balance (Credit balance as per Cash Book): Rs. 10,000
- Add: Bank charged interest: Rs. 150
- Less: Cheques issued but not presented for payment: Rs. 2,500
Balance as per Pass Book:
10,000 + 150 - 2,500
= Rs. 7,650
Therefore, the correct answer is A: Rs. 7,650.
Which type of error occurs when credit sales is wrongly posted to Purchase Day Book:- a)Error of omission
- b)Error of commission
- c)Compensatory error
- d)Error of principle
Correct answer is option 'B'. Can you explain this answer?
Which type of error occurs when credit sales is wrongly posted to Purchase Day Book:
a)
Error of omission
b)
Error of commission
c)
Compensatory error
d)
Error of principle
|
Live To answered |
Credit sales is posted to purchase day book,
such that new expense (debit) balance and liability (credit) is created at the same time.
such that new expense (debit) balance and liability (credit) is created at the same time.
Bank Overdraft as per cash book is Rs. 10,500. Interest debited by bank Rs. 3,500 for which advice was not received by account holder. Cheques deposited but not credited by bank Rs. 7,500. Cheques issued but not yet presented Rs. 9,500. What is the Overdraft amount as per Pass Book?- a)Rs. 12,000
- b)Rs. 16,000
- c)Rs. 5,000
- d)Rs. 9,000
Correct answer is 'A'. Can you explain this answer?
Bank Overdraft as per cash book is Rs. 10,500. Interest debited by bank Rs. 3,500 for which advice was not received by account holder. Cheques deposited but not credited by bank Rs. 7,500. Cheques issued but not yet presented Rs. 9,500. What is the Overdraft amount as per Pass Book?
a)
Rs. 12,000
b)
Rs. 16,000
c)
Rs. 5,000
d)
Rs. 9,000
|
Nipun Tuteja answered |
- Start with the Cash Book Overdraft: The initial overdraft as per the cash book is Rs. 10,500.
- Adjust for Bank Interest: The bank debited Rs. 3,500 for interest not known to the account holder. This increases the overdraft, so add Rs. 3,500.
- Adjust for Deposited but Uncredited Cheques: Cheques amounting to Rs. 7,500 are deposited but not yet credited by the bank. This also increases the overdraft, so add Rs. 7,500.
- Adjust for Issued but Unpresented Cheques: Cheques issued but not yet presented amount to Rs. 9,500. This reduces the overdraft, so subtract Rs. 9,500.
- Calculate Overdraft as per Pass Book:
\[
\text{Overdraft as per Pass Book} = 10,500 + 3,500 + 7,500 - 9,500 = 12,000
\]
- Correct Answer: A: Rs. 12,000
- Adjust for Bank Interest: The bank debited Rs. 3,500 for interest not known to the account holder. This increases the overdraft, so add Rs. 3,500.
- Adjust for Deposited but Uncredited Cheques: Cheques amounting to Rs. 7,500 are deposited but not yet credited by the bank. This also increases the overdraft, so add Rs. 7,500.
- Adjust for Issued but Unpresented Cheques: Cheques issued but not yet presented amount to Rs. 9,500. This reduces the overdraft, so subtract Rs. 9,500.
- Calculate Overdraft as per Pass Book:
\[
\text{Overdraft as per Pass Book} = 10,500 + 3,500 + 7,500 - 9,500 = 12,000
\]
- Correct Answer: A: Rs. 12,000
Debit balance as per cash book Rs.2000
Cheques deposited but not cleared Rs. 100
Cheques issued but not presented Rs. 150
Bank allowed interest Rs. 50
Bank collected dividend Rs. 50
Balance as per Pass Book will be:
- a)Rs. 2,100
- b)Rs. 1,950
- c)Rs. 2,350
- d)Rs. 2,150
Correct answer is option 'D'. Can you explain this answer?
Debit balance as per cash book Rs.2000
Cheques deposited but not cleared Rs. 100
Cheques issued but not presented Rs. 150
Bank allowed interest Rs. 50
Bank collected dividend Rs. 50
Balance as per Pass Book will be:
Cheques deposited but not cleared Rs. 100
Cheques issued but not presented Rs. 150
Bank allowed interest Rs. 50
Bank collected dividend Rs. 50
Balance as per Pass Book will be:
a)
Rs. 2,100
b)
Rs. 1,950
c)
Rs. 2,350
d)
Rs. 2,150
|
|
Niharika Chavan answered |
Calculation of Balance as per Pass Book:
Debit balance as per cash book = Rs. 2000
Cheques deposited but not cleared = Rs. 100
Cheques issued but not presented = Rs. 150
Bank allowed interest = Rs. 50
Bank collected dividend = Rs. 50
Adding the above transactions:
2000 + 100 - 150 + 50 + 50 = Rs. 2,050
Adjustment for Cheques:
Cheques issued but not presented = Rs. 150
Cheques deposited but not cleared = Rs. 100
Net adjustment for cheques = Rs. 50 (150 - 100)
Adding net adjustment for cheques to the balance as per pass book:
Rs. 2,050 + Rs. 50 = Rs. 2,100
Therefore, the correct answer is option 'D' - Rs. 2,150.
Debit balance as per cash book = Rs. 2000
Cheques deposited but not cleared = Rs. 100
Cheques issued but not presented = Rs. 150
Bank allowed interest = Rs. 50
Bank collected dividend = Rs. 50
Adding the above transactions:
2000 + 100 - 150 + 50 + 50 = Rs. 2,050
Adjustment for Cheques:
Cheques issued but not presented = Rs. 150
Cheques deposited but not cleared = Rs. 100
Net adjustment for cheques = Rs. 50 (150 - 100)
Adding net adjustment for cheques to the balance as per pass book:
Rs. 2,050 + Rs. 50 = Rs. 2,100
Therefore, the correct answer is option 'D' - Rs. 2,150.
Debit balance as per cash book Rs.2000
Cheques deposited but not cleared Rs. 100
Cheques issued but not presented Rs. 150
Bank allowed interest Rs. 50
Bank collected dividend Rs. 50
Balance as per Pass Book will be:
- a)Rs. 2,100
- b)Rs. 1,950
- c)Rs. 2,350
- d)Rs. 2,150
Correct answer is option 'D'. Can you explain this answer?
Debit balance as per cash book Rs.2000
Cheques deposited but not cleared Rs. 100
Cheques issued but not presented Rs. 150
Bank allowed interest Rs. 50
Bank collected dividend Rs. 50
Balance as per Pass Book will be:
Cheques deposited but not cleared Rs. 100
Cheques issued but not presented Rs. 150
Bank allowed interest Rs. 50
Bank collected dividend Rs. 50
Balance as per Pass Book will be:
a)
Rs. 2,100
b)
Rs. 1,950
c)
Rs. 2,350
d)
Rs. 2,150
|
|
KP Classes answered |
Opening and Closing Balance of Debtors A/c were Rs. 30,000 and 40,000 respectively cash collected from the debtors during the year was Rs. 2,40,000. Discount allowed to debtors for timely payment amounted to Rs. 15,000 and bad debts written off were Rs. 10,00. Goods sold on credit were:- a)Rs. 2,55,000
- b)Rs. 2,45,000
- c)Rs. 2,95,000
- d)Rs. 2,75,000
Correct answer is option 'D'. Can you explain this answer?
Opening and Closing Balance of Debtors A/c were Rs. 30,000 and 40,000 respectively cash collected from the debtors during the year was Rs. 2,40,000. Discount allowed to debtors for timely payment amounted to Rs. 15,000 and bad debts written off were Rs. 10,00. Goods sold on credit were:
a)
Rs. 2,55,000
b)
Rs. 2,45,000
c)
Rs. 2,95,000
d)
Rs. 2,75,000
|
Rithika Mukherjee answered |
Calculation of Closing Balance of Debtors A/c:
Cash collected from debtors during the year = Rs. 2,40,000
Discount allowed to debtors = Rs. 15,000
Bad debts written off = Rs. 10,000
Total amount received from debtors = Rs. 2,40,000 + Rs. 15,000 - Rs. 10,000 = Rs. 2,45,000
Closing balance of Debtors A/c = Opening balance + Goods sold on credit - Total amount received from debtors
Closing balance of Debtors A/c = Rs. 30,000 + Goods sold on credit - Rs. 2,45,000
Closing balance of Debtors A/c = Goods sold on credit - Rs. 2,15,000
Since the closing balance of Debtors A/c is Rs. 40,000,
Goods sold on credit = Rs. 40,000 + Rs. 2,15,000 = Rs. 2,55,000
Therefore, the correct option is D) Rs. 2,75,000
Cash collected from debtors during the year = Rs. 2,40,000
Discount allowed to debtors = Rs. 15,000
Bad debts written off = Rs. 10,000
Total amount received from debtors = Rs. 2,40,000 + Rs. 15,000 - Rs. 10,000 = Rs. 2,45,000
Closing balance of Debtors A/c = Opening balance + Goods sold on credit - Total amount received from debtors
Closing balance of Debtors A/c = Rs. 30,000 + Goods sold on credit - Rs. 2,45,000
Closing balance of Debtors A/c = Goods sold on credit - Rs. 2,15,000
Since the closing balance of Debtors A/c is Rs. 40,000,
Goods sold on credit = Rs. 40,000 + Rs. 2,15,000 = Rs. 2,55,000
Therefore, the correct option is D) Rs. 2,75,000
The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:- a)Debited by Rs. 180
- b)Credited by Rs. 180
- c)Debited by Rs. 1080
- d)Credited by Rs. 1080
Correct answer is option 'B'. Can you explain this answer?
The goods sold for Rs. 900 but the amount was entered in the sales Account as Rs. 1080. On Rectification, suspense account will be:
a)
Debited by Rs. 180
b)
Credited by Rs. 180
c)
Debited by Rs. 1080
d)
Credited by Rs. 1080
|
|
Meera Basak answered |
Rectification of Error in Accounting
Rectification of errors is an important aspect of accounting. It involves identifying and correcting errors made in the books of accounts. There are two types of errors in accounting:
1. Clerical errors: These are errors made due to mistakes in recording transactions. They can be corrected by making the necessary adjustments in the books of accounts.
2. Substantive errors: These are errors that affect the financial statements. They require a more detailed analysis to correct.
In this question, we are given that the goods were sold for Rs. 900 but the amount was entered in the sales account as Rs. 1080. This is a clerical error and can be rectified by making the necessary adjustment in the books of accounts.
Suspense Account
A suspense account is a temporary account used to hold transactions that cannot be immediately identified. It is created when there is uncertainty about the correct accounting treatment for a transaction. The transactions are then later identified and transferred to their appropriate accounts.
In this question, the difference between the amount sold and the amount recorded in the sales account is Rs. 180. This amount needs to be transferred to the correct account. Since the amount was recorded in excess, the suspense account needs to be credited with Rs. 180.
Answer
Therefore, the correct answer is option 'B' - Suspense account will be credited by Rs. 180.
Rectification of errors is an important aspect of accounting. It involves identifying and correcting errors made in the books of accounts. There are two types of errors in accounting:
1. Clerical errors: These are errors made due to mistakes in recording transactions. They can be corrected by making the necessary adjustments in the books of accounts.
2. Substantive errors: These are errors that affect the financial statements. They require a more detailed analysis to correct.
In this question, we are given that the goods were sold for Rs. 900 but the amount was entered in the sales account as Rs. 1080. This is a clerical error and can be rectified by making the necessary adjustment in the books of accounts.
Suspense Account
A suspense account is a temporary account used to hold transactions that cannot be immediately identified. It is created when there is uncertainty about the correct accounting treatment for a transaction. The transactions are then later identified and transferred to their appropriate accounts.
In this question, the difference between the amount sold and the amount recorded in the sales account is Rs. 180. This amount needs to be transferred to the correct account. Since the amount was recorded in excess, the suspense account needs to be credited with Rs. 180.
Answer
Therefore, the correct answer is option 'B' - Suspense account will be credited by Rs. 180.
The payment side of Cash Book is under cast by Rs. 250. If the starting point of BRS is the Overdraft Balance as per Pass Book, then what would be the treatment to reach to Overdraft Balance of Cash Book ?
- a)Less 250
- b)Add 250
- c)Add 500
- d)Less 500
Correct answer is option 'A'. Can you explain this answer?
The payment side of Cash Book is under cast by Rs. 250. If the starting point of BRS is the Overdraft Balance as per Pass Book, then what would be the treatment to reach to Overdraft Balance of Cash Book ?
a)
Less 250
b)
Add 250
c)
Add 500
d)
Less 500
|
Poonam Reddy answered |
When overdraft as per pass book is the starting point, those items will be added which makes cash book balance smaller than the pass book balance.
An amount of Rs. 6,000 due from Anshul, which had been written off as a bad debt in a previous year, was unexpectedly recovered and had been posted to his personal account. The rectification entry is :
- a)Anshul A/c Dr. Rs. 6,000
To Suspense A/c Rs. 6,000
- b)Suspense A/c Dr. Rs. 6,000
To Bad Debts
Recovered A/c Rs. 6,000
- c)No entry will be made
- d)Anshul A/c Dr. Rs. 6,000
To Bad Debts
Recovered A/c Rs. 6,000
Correct answer is option 'D'. Can you explain this answer?
An amount of Rs. 6,000 due from Anshul, which had been written off as a bad debt in a previous year, was unexpectedly recovered and had been posted to his personal account. The rectification entry is :
a)
Anshul A/c Dr. Rs. 6,000
To Suspense A/c Rs. 6,000
To Suspense A/c Rs. 6,000
b)
Suspense A/c Dr. Rs. 6,000
To Bad Debts
Recovered A/c Rs. 6,000
To Bad Debts
Recovered A/c Rs. 6,000
c)
No entry will be made
d)
Anshul A/c Dr. Rs. 6,000
To Bad Debts
Recovered A/c Rs. 6,000
To Bad Debts
Recovered A/c Rs. 6,000
|
|
Nipun Tuteja answered |
Correct option is D.
When an amount previously written off as a bad debt is unexpectedly recovered, the rectification entry in the accounting records is as follows:
When an amount previously written off as a bad debt is unexpectedly recovered, the rectification entry in the accounting records is as follows:
- Bad Debts Recovered A/c Dr. Rs. 6,000: This account is debited to record the recovery of the bad debt. It increases the amount of income or reduction in expense related to bad debts.
- Anshul A/c Cr. Rs. 6,000: Anshul's personal account is credited to reinstate the amount that had been previously written off as a bad debt. This reduces the accounts receivable balance from Anshul.
Therefore, the rectification entry would be:
Bad Debts Recovered A/c Dr. 6,000
To Anshul A/c 6,000
To Anshul A/c 6,000
A cheque for Rs. 500 received from Yuvraj & Co. was dishonoured and debited to discount Account. Due to rectification of this error, net profit will :- a)Decrease by Rs. 1,000
- b)Increase by Rs. 500
- c)Increase by Rs. 1,000
- d)No change
Correct answer is option 'B'. Can you explain this answer?
A cheque for Rs. 500 received from Yuvraj & Co. was dishonoured and debited to discount Account. Due to rectification of this error, net profit will :
a)
Decrease by Rs. 1,000
b)
Increase by Rs. 500
c)
Increase by Rs. 1,000
d)
No change
|
Nipuns Institute answered |
When a cheque for Rs. 500 received from Yuvraj & Co. was dishonoured, it was incorrectly debited to the Discount Account. Typically, a Discount Account records reductions in revenue, not expenses or losses from non-payment.
Rectification: The proper accounting treatment for a dishonoured cheque should move the erroneous debit from the Discount Account to the correct account, typically Accounts Receivable or a similar account for bad debts. This shift does not involve real income; it corrects the way the income was recorded.
Impact on Net Profit: Correcting this by removing the debit from the Discount Account means the discounts given are effectively increased by Rs. 500 (or reducing the incorrect reduction in expenses that never should have been recorded as such). Therefore, it looks as if we're reversing an incorrect expense reduction, which will appear as if net profit increases by Rs. 500 because the initially recorded 'expense' from the Discount Account was erroneous.
So, when corrected, it appears as if the company's income statement was relieved of an improper Rs. 500 reduction, thus increasing net profit. Hence, Answer B: Increase by Rs. 500 is selected as the correction results in a reversal of a debit that should not have been in Discount but should have reflected an uncollected income or a receivable.
When the balance as per Cash Book is the starting point, direct deposits by customers are.- a)Added
- b)Subtracted
- c)Not required to be adjusted
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
When the balance as per Cash Book is the starting point, direct deposits by customers are.
a)
Added
b)
Subtracted
c)
Not required to be adjusted
d)
None of these
|
Harjindra Singh answered |
When the balance as per cash book is the starting point direct deposited by customers are added. bcoz let , cash book and pass book are same e.g. rd 2000and the amount that is directly deposited by customer is rs1000 so it is added to pass book now pass book balance is rs3000 and the balance of cash book is rs2000 .now we have to balance both.acc. to cash book we have to add rs1000 . so we have to add .
When the balance as per Cash Book is the starting point, direct deposits by customers are:- a)added
- b)subtracted;
- c)not required to be adjusted
- d)neither of the two
Correct answer is option 'A'. Can you explain this answer?
When the balance as per Cash Book is the starting point, direct deposits by customers are:
a)
added
b)
subtracted;
c)
not required to be adjusted
d)
neither of the two
|
|
Rajveer Jain answered |
**Answer:**
Direct deposits by customers are added when the balance as per Cash Book is the starting point. This is because direct deposits by customers are an inflow of cash into the business, which increases the cash balance. Adding these deposits to the starting balance of the Cash Book reflects the actual cash position of the business.
To understand this concept in detail, let's break down the answer:
**1. Cash Book:**
The Cash Book is a subsidiary book that records all cash and bank transactions of a business. It serves as a record of all cash inflows and outflows, including cash received from customers and cash paid to suppliers, employees, etc.
**2. Starting Point:**
The starting point refers to the opening balance of the Cash Book. It is the balance of cash on hand or in the bank at the beginning of a particular accounting period. This balance is carried forward from the previous period's closing balance.
**3. Direct Deposits by Customers:**
Direct deposits by customers refer to cash payments made directly into the business's bank account by its customers. These deposits could be in the form of payments for goods or services, loan repayments, or any other form of cash inflow from customers.
**4. Adding Direct Deposits:**
When the balance as per Cash Book is the starting point, direct deposits by customers are added. This means that the amount of direct deposits made by customers is added to the starting balance of the Cash Book.
Adding these deposits increases the cash balance in the Cash Book, reflecting the actual inflow of cash into the business. It ensures that the Cash Book accurately represents the cash position of the business at the beginning of the accounting period.
**5. Purpose of Adjustment:**
The purpose of this adjustment is to reconcile the Cash Book balance with the bank statement balance. By adding the direct deposits made by customers, the Cash Book balance will match the bank statement balance, which also includes these deposits.
**Conclusion:**
In summary, when the balance as per Cash Book is the starting point, direct deposits by customers are added. This adjustment ensures that the Cash Book accurately reflects the cash position of the business and reconciles it with the bank statement balance.
Direct deposits by customers are added when the balance as per Cash Book is the starting point. This is because direct deposits by customers are an inflow of cash into the business, which increases the cash balance. Adding these deposits to the starting balance of the Cash Book reflects the actual cash position of the business.
To understand this concept in detail, let's break down the answer:
**1. Cash Book:**
The Cash Book is a subsidiary book that records all cash and bank transactions of a business. It serves as a record of all cash inflows and outflows, including cash received from customers and cash paid to suppliers, employees, etc.
**2. Starting Point:**
The starting point refers to the opening balance of the Cash Book. It is the balance of cash on hand or in the bank at the beginning of a particular accounting period. This balance is carried forward from the previous period's closing balance.
**3. Direct Deposits by Customers:**
Direct deposits by customers refer to cash payments made directly into the business's bank account by its customers. These deposits could be in the form of payments for goods or services, loan repayments, or any other form of cash inflow from customers.
**4. Adding Direct Deposits:**
When the balance as per Cash Book is the starting point, direct deposits by customers are added. This means that the amount of direct deposits made by customers is added to the starting balance of the Cash Book.
Adding these deposits increases the cash balance in the Cash Book, reflecting the actual inflow of cash into the business. It ensures that the Cash Book accurately represents the cash position of the business at the beginning of the accounting period.
**5. Purpose of Adjustment:**
The purpose of this adjustment is to reconcile the Cash Book balance with the bank statement balance. By adding the direct deposits made by customers, the Cash Book balance will match the bank statement balance, which also includes these deposits.
**Conclusion:**
In summary, when the balance as per Cash Book is the starting point, direct deposits by customers are added. This adjustment ensures that the Cash Book accurately reflects the cash position of the business and reconciles it with the bank statement balance.
Can you explain the answer of this question below:If balance as per Pass Book is the starting point, then uncollected cheques are:
- A:
Added in BRS
- B:
Subtracted in BRS
- C:
Ignored while preparing BRS
- D:
None of these
The answer is a.
If balance as per Pass Book is the starting point, then uncollected cheques are:
Added in BRS
Subtracted in BRS
Ignored while preparing BRS
None of these
|
|
Jyoti Nair answered |
Explanation:
When preparing a Bank Reconciliation Statement (BRS), the starting point is the balance as per Pass Book, which is the balance shown in the bank statement. However, this balance may not be the same as the balance in the company's Cash Book due to various reasons, such as outstanding cheques, bank charges, interest, etc.
One of the reasons for the difference between the balances is uncollected cheques, which are cheques issued by the company but have not yet been presented for payment by the recipients. These cheques are also known as outstanding cheques or uncleared cheques.
When preparing a BRS, uncollected cheques are added to the balance as per Pass Book because they have already been recorded in the company's Cash Book but have not yet been debited by the bank. Therefore, they are part of the company's bank balance that is not reflected in the bank statement.
For example, if the balance as per Pass Book is Rs. 50,000 and there are uncollected cheques worth Rs. 10,000, the adjusted bank balance would be Rs. 60,000 (Rs. 50,000 + Rs. 10,000).
Therefore, the correct answer is option 'A', i.e., uncollected cheques are added in BRS.
When preparing a Bank Reconciliation Statement (BRS), the starting point is the balance as per Pass Book, which is the balance shown in the bank statement. However, this balance may not be the same as the balance in the company's Cash Book due to various reasons, such as outstanding cheques, bank charges, interest, etc.
One of the reasons for the difference between the balances is uncollected cheques, which are cheques issued by the company but have not yet been presented for payment by the recipients. These cheques are also known as outstanding cheques or uncleared cheques.
When preparing a BRS, uncollected cheques are added to the balance as per Pass Book because they have already been recorded in the company's Cash Book but have not yet been debited by the bank. Therefore, they are part of the company's bank balance that is not reflected in the bank statement.
For example, if the balance as per Pass Book is Rs. 50,000 and there are uncollected cheques worth Rs. 10,000, the adjusted bank balance would be Rs. 60,000 (Rs. 50,000 + Rs. 10,000).
Therefore, the correct answer is option 'A', i.e., uncollected cheques are added in BRS.
The balance as per Cash Book (overdraft ) is 1,500. Cheques for Rs. 400 were deposited but were not collected. The cheques issued but not presented were Rs. 100, Rs. 125, Rs. 50. Balance as per Pass Book is :
- a)Rs. 1,100
- b)Rs. 1,625
- c)Rs. 12,000
- d)Rs. 1,375
Correct answer is option 'B'. Can you explain this answer?
The balance as per Cash Book (overdraft ) is 1,500. Cheques for Rs. 400 were deposited but were not collected. The cheques issued but not presented were Rs. 100, Rs. 125, Rs. 50. Balance as per Pass Book is :
a)
Rs. 1,100
b)
Rs. 1,625
c)
Rs. 12,000
d)
Rs. 1,375
|
|
Poonam Reddy answered |
Correct Answer :- b
Explanation : Balance as per Cash Book = 1500
Cheque deposited = 400
Cheque issues were = 100 + 125 + 50
= 275
Balance as per Pass book = 1500 + 400 - 275
= 1625
Can you explain the answer of this question below:Balance as per Cash Book is Rs. 5,000. Cheques issued but not presented for payment Rs. 2,000 and Cheques sent for collection but not collected Rs. 1,500. The Bank had wrongly debited the account of firm by Rs. 20. Balance as per pass book will be:
- A:
Rs. 5,580
- B:
Rs. 5,480
- C:
Rs. 4,520
- D:
Rs. 5,520
The answer is b.
Balance as per Cash Book is Rs. 5,000. Cheques issued but not presented for payment Rs. 2,000 and Cheques sent for collection but not collected Rs. 1,500. The Bank had wrongly debited the account of firm by Rs. 20. Balance as per pass book will be:
Rs. 5,580
Rs. 5,480
Rs. 4,520
Rs. 5,520
|
Sai Joshi answered |
C) Dishonored
Sale of old furniture is wrongly transferred to Sales Account. Which type of error is this ?- a)Error of Principle
- b)Compensating Error
- c)Error of Omission
- d)Error of Commission
Correct answer is option 'A'. Can you explain this answer?
Sale of old furniture is wrongly transferred to Sales Account. Which type of error is this ?
a)
Error of Principle
b)
Compensating Error
c)
Error of Omission
d)
Error of Commission
|
Alok Mehta answered |
An error of principle is an accounting mistake in which an entry is recorded in the incorrect account, violating the fundamental principles of accounting. An error of principle is a procedural error, meaning that the value recorded was the correct value but placed incorrectly.
Which of these types of errors are not detected during Bank Reconciliation’:
- a)Cash embezzlement by cashier
- b)Cheques deposited but not credited by bank
- c)Casting mistakes in bank column of cash book
- d)Interest or commission charged by the bank not accounted in cash book
Correct answer is option 'A'. Can you explain this answer?
Which of these types of errors are not detected during Bank Reconciliation’:
a)
Cash embezzlement by cashier
b)
Cheques deposited but not credited by bank
c)
Casting mistakes in bank column of cash book
d)
Interest or commission charged by the bank not accounted in cash book
|
|
Devanshi Rane answered |
The errors that are not detected during Bank Reconciliation are:
1. Errors in recording transactions in the bank statement: Bank reconciliation only compares the bank statement with the company's records. If there are errors in recording transactions in the bank statement, such as duplicate entries or incorrect amounts, they will not be detected during bank reconciliation.
2. Errors in recording transactions in the company's books: Bank reconciliation compares the bank statement with the company's records to identify any discrepancies. However, if there are errors in recording transactions in the company's books, such as incorrect amounts or incorrect accounts, they may not be detected during bank reconciliation.
3. Errors in timing: Bank reconciliation compares the timing of transactions recorded in the bank statement with the company's records. However, if there are errors in timing, such as recording a transaction in the wrong period or recording a transaction on the wrong date, they may not be detected during bank reconciliation.
4. Errors in reconciliation process: Bank reconciliation is a process that involves comparing the bank statement with the company's records to identify any discrepancies. However, if there are errors in the reconciliation process itself, such as incorrect calculations or incorrect matching of transactions, they may not be detected during bank reconciliation.
1. Errors in recording transactions in the bank statement: Bank reconciliation only compares the bank statement with the company's records. If there are errors in recording transactions in the bank statement, such as duplicate entries or incorrect amounts, they will not be detected during bank reconciliation.
2. Errors in recording transactions in the company's books: Bank reconciliation compares the bank statement with the company's records to identify any discrepancies. However, if there are errors in recording transactions in the company's books, such as incorrect amounts or incorrect accounts, they may not be detected during bank reconciliation.
3. Errors in timing: Bank reconciliation compares the timing of transactions recorded in the bank statement with the company's records. However, if there are errors in timing, such as recording a transaction in the wrong period or recording a transaction on the wrong date, they may not be detected during bank reconciliation.
4. Errors in reconciliation process: Bank reconciliation is a process that involves comparing the bank statement with the company's records to identify any discrepancies. However, if there are errors in the reconciliation process itself, such as incorrect calculations or incorrect matching of transactions, they may not be detected during bank reconciliation.
Debit balance as per Cash Book of ABC Enterprises as on 31.3.2011 is Rs. 1,500. Cheques deposited but not cleared amounts to Rs. 100 and Cheques issued but not presented of Rs. 150. The bank allowed interest amounting Rs. 50 and collected dividend Rs. 50 on behalf of ABC Enterprises. Balance as per pass book should be- a)Rs.1,600.
- b)Rs.1,450.
- c)Rs.1,850.
- d)Rs.1,650.
Correct answer is option 'D'. Can you explain this answer?
Debit balance as per Cash Book of ABC Enterprises as on 31.3.2011 is Rs. 1,500. Cheques deposited but not cleared amounts to Rs. 100 and Cheques issued but not presented of Rs. 150. The bank allowed interest amounting Rs. 50 and collected dividend Rs. 50 on behalf of ABC Enterprises. Balance as per pass book should be
a)
Rs.1,600.
b)
Rs.1,450.
c)
Rs.1,850.
d)
Rs.1,650.
|
|
Alok Mehta answered |
Bank Reconciliation Statement. Debit balance as per cash book 1500 (-) Cheque deposited but not cleared 100 (+)Cheques issued but not presented 150 (+)bank allowed interest 50 (+) dividend collected on behalf of 50 ABC Enterprises. Balance as per pass book 16504.
Which of the following in Trial Balance is contradictory to each other? __________.- a)Inventory and Drawings
- b)Sales and Purchase Return
- c)Carriage Inward and Outward
- d)Trade Receivable and Liability
Correct answer is option 'D'. Can you explain this answer?
Which of the following in Trial Balance is contradictory to each other? __________.
a)
Inventory and Drawings
b)
Sales and Purchase Return
c)
Carriage Inward and Outward
d)
Trade Receivable and Liability
|
|
Freedom Institute answered |
The correct option is D
A trial balance is the accounting equation of our business laid out in detail. It has our assets, expenses and drawings on the left (the debit side) and our liabilities, revenue and owner's equity on the right (the credit side).
Since inventory is an asset and drawings are expenses, both are debit items.
Sales are a form of income so go on the credit side of the trial balance.Purchases returns will reduce the expense so go on the credit side.
Carriage inwards in trial balance and Carriage outwards in trial balance are both treated as just another expense, so they are debit items
Trade receivables are revenues so are recorded on debit side and liability is recorded as a credit item.
Trial Balance is a :- a)Statement
- b)Account
- c)Summary
- d)Ledger
Correct answer is option 'A'. Can you explain this answer?
Trial Balance is a :
a)
Statement
b)
Account
c)
Summary
d)
Ledger
|
K Srivastava answered |
It is a statement because it has no Dr or cr side
Can you explain the answer of this question below:A Bank Reconciliation Statement is a
- A:
part of Cash Book;
- B:
part of Bank Account;
- C:
part of financial statements,
- D:
none of the above.
The answer is c.
A Bank Reconciliation Statement is a
part of Cash Book;
part of Bank Account;
part of financial statements,
none of the above.
|
Lakshya Raj answered |
This answer is wrong correct answer is D because it is only a statement... brs not use for prepare financial statement it's is only use for tally the balance of cash book bank coloum and pass book...
The beginning stock of the current year is overstated by Rs. 500 and closing stock is overstated by Rs. 1200. Effect on profit:
- a)Rs. 1700 (overstated)
- b)Rs. 1200 (understated)
- c)Rs. 1700 (understated)
- d)Rs. 700 (overstated)
Correct answer is option 'D'. Can you explain this answer?
The beginning stock of the current year is overstated by Rs. 500 and closing stock is overstated by Rs. 1200. Effect on profit:
a)
Rs. 1700 (overstated)
b)
Rs. 1200 (understated)
c)
Rs. 1700 (understated)
d)
Rs. 700 (overstated)
|
|
Siddharth Sen answered |
Effect of Overstating Beginning Stock and Closing Stock on Profit
Explanation:
Overstating the beginning stock and closing stock will have an impact on the calculation of cost of goods sold (COGS) and gross profit.
Impact on COGS:
COGS is calculated as Beginning Stock + Purchases - Closing Stock. If the beginning stock is overstated, it will lead to an increase in COGS, and if the closing stock is overstated, it will lead to a decrease in COGS.
Impact on Gross Profit:
Gross profit is calculated as Sales - COGS. If COGS is overstated due to an overstated beginning stock or understated closing stock, it will lead to a decrease in gross profit.
Answer:
In this case, the beginning stock is overstated by Rs. 500 and closing stock is overstated by Rs. 1200.
Impact on COGS:
COGS = Beginning Stock + Purchases - Closing Stock
Overstated Beginning Stock = Rs. 500
Overstated Closing Stock = Rs. 1200
COGS = Rs. 500 + Purchases - Rs. 1200
COGS is understated by Rs. 700 (Rs. 1200 - Rs. 500)
Impact on Gross Profit:
Gross Profit = Sales - COGS
Assuming Sales remain the same,
Gross Profit is overstated by Rs. 700.
Therefore, the correct answer is option 'D' - Rs. 700 (overstated).
Explanation:
Overstating the beginning stock and closing stock will have an impact on the calculation of cost of goods sold (COGS) and gross profit.
Impact on COGS:
COGS is calculated as Beginning Stock + Purchases - Closing Stock. If the beginning stock is overstated, it will lead to an increase in COGS, and if the closing stock is overstated, it will lead to a decrease in COGS.
Impact on Gross Profit:
Gross profit is calculated as Sales - COGS. If COGS is overstated due to an overstated beginning stock or understated closing stock, it will lead to a decrease in gross profit.
Answer:
In this case, the beginning stock is overstated by Rs. 500 and closing stock is overstated by Rs. 1200.
Impact on COGS:
COGS = Beginning Stock + Purchases - Closing Stock
Overstated Beginning Stock = Rs. 500
Overstated Closing Stock = Rs. 1200
COGS = Rs. 500 + Purchases - Rs. 1200
COGS is understated by Rs. 700 (Rs. 1200 - Rs. 500)
Impact on Gross Profit:
Gross Profit = Sales - COGS
Assuming Sales remain the same,
Gross Profit is overstated by Rs. 700.
Therefore, the correct answer is option 'D' - Rs. 700 (overstated).
Balance as per Cash Book is Rs. 5,000. Cheques issued but not presented for payment Rs. 2,000 and Cheques sent for collection but not collected Rs. 1,500. The Bank had wrongly debited the account of firm by Rs. 20. Balance as per pass book will be:- a)Rs. 5,580
- b)Rs. 5,480
- c)Rs. 4,520
- d)Rs. 5,520
Correct answer is 'B'. Can you explain this answer?
Balance as per Cash Book is Rs. 5,000. Cheques issued but not presented for payment Rs. 2,000 and Cheques sent for collection but not collected Rs. 1,500. The Bank had wrongly debited the account of firm by Rs. 20. Balance as per pass book will be:
a)
Rs. 5,580
b)
Rs. 5,480
c)
Rs. 4,520
d)
Rs. 5,520
|
User12742372 answered |
Bal. as per Cash book(Dr.) 5000 Add: cheque issued but not presented 2000 {reason: Previously deducted from CB but not in PB)Less: cheque not collected yet by bank (1500) {reason: Previously added to CB but not in PB)Less: Wrong dr. By bank(wrongly deducted) (20) {reason: Wrong dr. In PB but not in CB) Therefore, Cr. Balance as per PB : 5480/-
Which of these types of errors are not detected during Bank Reconciliation’ :- a)Cash embezzlement by cashier
- b)Cheques deposited but not credited by bank
- c)Casting mistakes in bank column of cash book
- d)Interest or commission charged by the bank not accounted in cash book
Correct answer is option 'A'. Can you explain this answer?
Which of these types of errors are not detected during Bank Reconciliation’ :
a)
Cash embezzlement by cashier
b)
Cheques deposited but not credited by bank
c)
Casting mistakes in bank column of cash book
d)
Interest or commission charged by the bank not accounted in cash book
|
|
Raghavendra Choudhury answered |
Errors in journal entries or errors in the company's accounting records are not detected during bank reconciliation. Bank reconciliation only compares the bank statement with the company's cash account balance and identifies discrepancies between the two. It does not check the accuracy of individual transactions recorded in the company's accounting system.
When drawing up a Bank Reconciliation Statement, if you start with a debit balance as per the Bank Statement, the unpresented cheques should be:- a)Added
- b)Deducted
- c)Not required to be adjusted
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
When drawing up a Bank Reconciliation Statement, if you start with a debit balance as per the Bank Statement, the unpresented cheques should be:
a)
Added
b)
Deducted
c)
Not required to be adjusted
d)
None of the above
|
|
Aditi Joshi answered |
| Bank Reconciliation Statement |
Introduction to Bank Reconciliation Statement
A Bank Reconciliation Statement is a statement prepared by a business to reconcile the difference between the bank balance as per the company's records and the bank balance as per the bank statement. It ensures that both balances are in agreement by comparing the financial transactions recorded by the business with those recorded by the bank.
Debit Balance as per the Bank Statement
When starting with a debit balance as per the bank statement, it means that the bank statement shows a higher balance than the company's records. This can happen due to various reasons such as outstanding checks, deposits in transit, bank errors, or other reconciling items.
Unpresented Cheques
Unpresented cheques refer to checks issued by the company that have not yet been presented to the bank for payment. These checks are recorded in the company's books as payments but have not yet been deducted from the bank balance.
Addition of Unpresented Cheques
To reconcile the difference between the bank balance as per the company's records and the bank statement, the unpresented cheques need to be added to the bank balance as per the bank statement. This adjustment is made because the bank statement does not reflect the deduction of these checks, resulting in a higher balance.
Reasoning behind Adding Unpresented Cheques
The reason for adding the unpresented cheques is to align the bank balance as per the bank statement with the company's records. Since the company has already recorded these checks as payments, they need to be added to the bank balance to reflect the correct position.
Example
Let's say the bank balance as per the bank statement is $10,000, and there are unpresented cheques of $3,000. When preparing the bank reconciliation statement, the unpresented cheques of $3,000 will be added to the bank balance, resulting in a reconciled balance of $13,000.
Conclusion
In conclusion, when starting with a debit balance as per the bank statement, the unpresented cheques should be added to the bank balance to reconcile the difference between the bank balance as per the company's records and the bank statement. This adjustment ensures that both balances are in agreement and reflects the correct financial position of the business.
The bank charged Rs. 1,000 as bank charges to a client and communicates the same to him. The accountant records it in the bank account in books. Later on the bank realizes that the charges were wrongly charged and reverses the same, but forgot to communicate the same to the client. If the accountant is starting with the bank balance as per bank account in books, what will be the treatment in Bank Reconciliation statement to arrive at balance as per Bank statement:- a)Reduce Rs. 1,000
- b)Add Rs. 1,000
- c)Add Rs. 2,000
- d)No treatment
Correct answer is option 'B'. Can you explain this answer?
The bank charged Rs. 1,000 as bank charges to a client and communicates the same to him. The accountant records it in the bank account in books. Later on the bank realizes that the charges were wrongly charged and reverses the same, but forgot to communicate the same to the client. If the accountant is starting with the bank balance as per bank account in books, what will be the treatment in Bank Reconciliation statement to arrive at balance as per Bank statement:
a)
Reduce Rs. 1,000
b)
Add Rs. 1,000
c)
Add Rs. 2,000
d)
No treatment
|
|
Mihir Banerjee answered |
Bank Reconciliation Statement Treatment for Bank Charges Reversed but not Communicated to Client
When preparing a Bank Reconciliation Statement, the accountant must reconcile the bank balance as per the bank statement with the bank balance as per the books of accounts. In this scenario, the bank charged Rs. 1,000 as bank charges to a client, which was recorded in the books. However, the bank later realized the error and reversed the charges without informing the client.
To arrive at the balance as per the bank statement, the following treatment must be applied:
Add Rs. 1,000
- The bank charges were reversed by the bank, which means that the bank balance as per the bank statement will be higher by Rs. 1,000.
- However, since the reversal was not communicated to the client, the bank balance as per the books of accounts will not reflect this change.
- Therefore, to reconcile the two balances, the accountant must add Rs. 1,000 to the bank balance as per the books of accounts.
- This will result in the balance as per the bank statement and the balance as per the books of accounts being reconciled.
In summary, when bank charges are reversed but not communicated to the client, the accountant must add the amount of the reversal to the bank balance as per the books of accounts to arrive at the balance as per the bank statement.
When preparing a Bank Reconciliation Statement, the accountant must reconcile the bank balance as per the bank statement with the bank balance as per the books of accounts. In this scenario, the bank charged Rs. 1,000 as bank charges to a client, which was recorded in the books. However, the bank later realized the error and reversed the charges without informing the client.
To arrive at the balance as per the bank statement, the following treatment must be applied:
Add Rs. 1,000
- The bank charges were reversed by the bank, which means that the bank balance as per the bank statement will be higher by Rs. 1,000.
- However, since the reversal was not communicated to the client, the bank balance as per the books of accounts will not reflect this change.
- Therefore, to reconcile the two balances, the accountant must add Rs. 1,000 to the bank balance as per the books of accounts.
- This will result in the balance as per the bank statement and the balance as per the books of accounts being reconciled.
In summary, when bank charges are reversed but not communicated to the client, the accountant must add the amount of the reversal to the bank balance as per the books of accounts to arrive at the balance as per the bank statement.
Rs. 200 paid as wages for erecting a machine should be debited to - a)Repair account.
- b)Machine account
- c)Capital account.
- d)Furniture account
Correct answer is option 'B'. Can you explain this answer?
Rs. 200 paid as wages for erecting a machine should be debited to
a)
Repair account.
b)
Machine account
c)
Capital account.
d)
Furniture account
|
|
KP Classes answered |
Wages paid for erecting a machine are considered part of the capital expenditure, as they are directly related to bringing the machine into a usable condition. Therefore, these wages should be debited to the Machine account and not to the repair account or any other account.
This cost is added to the value of the machine, as it is necessary for setting up the machine for its intended use.
Hari charges 10% depreciation on plant and machinery. On 1st April 2011 he debited Rs. 7,520 paid on installation of plant and machinery to profit and loss account. At the time of preparing final accounts on 31st March, 2012 due to this error,
- a)Net Profit will decrease by Rs. 6,768
- b)Net Profit will decrease by Rs. 7,520
- c)Net Profit will decrease by Rs. 8,272
- d)Net Profit will increase by Rs. 6,768
Correct answer is option 'A'. Can you explain this answer?
Hari charges 10% depreciation on plant and machinery. On 1st April 2011 he debited Rs. 7,520 paid on installation of plant and machinery to profit and loss account. At the time of preparing final accounts on 31st March, 2012 due to this error,
a)
Net Profit will decrease by Rs. 6,768
b)
Net Profit will decrease by Rs. 7,520
c)
Net Profit will decrease by Rs. 8,272
d)
Net Profit will increase by Rs. 6,768
|
|
Pranav Gupta answered |
Depreciation on Plant and Machinery
- Hari charges 10% depreciation on plant and machinery.
- Depreciation is a non-cash expense that reduces the value of an asset over its useful life.
- It is charged to the profit and loss account.
Error in Debit Entry
- On 1st April 2011, Hari debited Rs. 7,520 paid on installation of plant and machinery to the profit and loss account.
- This entry should have been debited to the plant and machinery account.
- As a result, the profit and loss account was overstated by Rs. 7,520.
Impact on Final Accounts
- At the time of preparing final accounts on 31st March 2012, the error is discovered.
- The amount of Rs. 7,520 should be debited to the plant and machinery account and credited to the profit and loss account to rectify the error.
- The effect of this correction on the profit and loss account will be to decrease the profit by Rs. 6,768 (i.e., 10% of Rs. 7,520).
- The correct amount of depreciation for the year ending 31st March 2012 will be Rs. 752 (i.e., 10% of Rs. 7,520).
- Therefore, the net profit will decrease by Rs. 6,768 due to this error.
- Hari charges 10% depreciation on plant and machinery.
- Depreciation is a non-cash expense that reduces the value of an asset over its useful life.
- It is charged to the profit and loss account.
Error in Debit Entry
- On 1st April 2011, Hari debited Rs. 7,520 paid on installation of plant and machinery to the profit and loss account.
- This entry should have been debited to the plant and machinery account.
- As a result, the profit and loss account was overstated by Rs. 7,520.
Impact on Final Accounts
- At the time of preparing final accounts on 31st March 2012, the error is discovered.
- The amount of Rs. 7,520 should be debited to the plant and machinery account and credited to the profit and loss account to rectify the error.
- The effect of this correction on the profit and loss account will be to decrease the profit by Rs. 6,768 (i.e., 10% of Rs. 7,520).
- The correct amount of depreciation for the year ending 31st March 2012 will be Rs. 752 (i.e., 10% of Rs. 7,520).
- Therefore, the net profit will decrease by Rs. 6,768 due to this error.
Can you explain the answer of this question below:When overdraft as per Cash Book is the starting point, a cheque of Rs. 500 deposited into bank but not recorded in cash book will be :
- A:
Added by Rs. 500
- B:
Deducted by Rs. 500
- C:
Added by Rs. 1,000
- D:
Deducted by Rs. 1,000
The answer is b.
When overdraft as per Cash Book is the starting point, a cheque of Rs. 500 deposited into bank but not recorded in cash book will be :
Added by Rs. 500
Deducted by Rs. 500
Added by Rs. 1,000
Deducted by Rs. 1,000
|
Nandini Iyer answered |
Overdraft as per the cash book means that the amount is overdrawn.A cheque of Rs 500 is deposited into the bank but not recorded in the cash book means that the balance of cash book shows a higher overdraft balance because if the entry of Rs 500 was made then the overdraft balance will get reduced by Rs 500.This amount is credited by the bank thus overdraft as per pass book stands decreased,therefore in order to decrease the overdraft balance as per cash book we will deduct Rs 500 from the overdraft balance as per the cash book.
The balance as per Cash Book is Rs. 10,000 Cheques for Rs. 2,000 were issued but not presented for payment. What would be the balance as per Pass Book?- a)Rs. 10,000
- b)Rs. 2,000
- c)Rs. 12,000
- d)None of the above
Correct answer is option 'C'. Can you explain this answer?
The balance as per Cash Book is Rs. 10,000 Cheques for Rs. 2,000 were issued but not presented for payment. What would be the balance as per Pass Book?
a)
Rs. 10,000
b)
Rs. 2,000
c)
Rs. 12,000
d)
None of the above
|
Monica D answered |
Bal. as per cashbook = 10,000
Add: cheques issued but not presented =2,000
.•. bal. as per passbook = 12,000
Add: cheques issued but not presented =2,000
.•. bal. as per passbook = 12,000
If the balance as per Pass Book is the starting point, so the treatment of undercasting of receipt side of Cash Book will be :- a)Added
- b)Deducted
- c)No treatment
- d)None of these
Correct answer is option 'B'. Can you explain this answer?
If the balance as per Pass Book is the starting point, so the treatment of undercasting of receipt side of Cash Book will be :
a)
Added
b)
Deducted
c)
No treatment
d)
None of these
|
|
Prasenjit Kapoor answered |
Treatment of Undercasting of Receipt Side of Cash Book
When the balance as per Pass Book is the starting point, the treatment of undercasting of receipt side of Cash Book will be deducted from the balance as per Pass Book. This is because undercasting of receipt side of Cash Book means that some of the cash received has not been recorded in the Cash Book, resulting in a lower balance as per Cash Book. As a result, when we start with the balance as per Pass Book, we need to adjust it for the undercast amount so that the correct balance is reflected.
Steps for Deducting Undercasting of Receipt Side of Cash Book
The following steps can be followed to deduct the undercasting of receipt side of Cash Book:
Step 1: Identify the undercast amount
The first step is to identify the undercast amount on the receipt side of the Cash Book. This can be done by comparing the entries in the Cash Book with the bank statement or Pass Book.
Step 2: Deduct the undercast amount from the balance as per Pass Book
Once the undercast amount has been identified, it should be deducted from the balance as per Pass Book. This will give us the correct balance as per Cash Book.
Step 3: Record the adjustment in the Cash Book
The adjustment for the undercast amount should be recorded in the Cash Book. This can be done by writing a narration explaining the adjustment and the reason for it.
Example
Suppose the balance as per Pass Book is Rs. 50,000. On comparing the Cash Book with the Pass Book, it is found that a receipt of Rs. 5,000 has been undercast in the Cash Book. The treatment of undercasting of receipt side of Cash Book will be as follows:
- Deduct the undercast amount of Rs. 5,000 from the balance as per Pass Book:
Balance as per Pass Book = Rs. 50,000 - Rs. 5,000 = Rs. 45,000
- Record the adjustment in the Cash Book with a narration:
Cash Book:
Receipt side
To adjust undercast of Rs. 5,000
By deducting the undercast amount, the correct balance as per Cash Book of Rs. 45,000 is reflected, and the adjustment is recorded in the Cash Book.
When the balance as per Pass Book is the starting point, the treatment of undercasting of receipt side of Cash Book will be deducted from the balance as per Pass Book. This is because undercasting of receipt side of Cash Book means that some of the cash received has not been recorded in the Cash Book, resulting in a lower balance as per Cash Book. As a result, when we start with the balance as per Pass Book, we need to adjust it for the undercast amount so that the correct balance is reflected.
Steps for Deducting Undercasting of Receipt Side of Cash Book
The following steps can be followed to deduct the undercasting of receipt side of Cash Book:
Step 1: Identify the undercast amount
The first step is to identify the undercast amount on the receipt side of the Cash Book. This can be done by comparing the entries in the Cash Book with the bank statement or Pass Book.
Step 2: Deduct the undercast amount from the balance as per Pass Book
Once the undercast amount has been identified, it should be deducted from the balance as per Pass Book. This will give us the correct balance as per Cash Book.
Step 3: Record the adjustment in the Cash Book
The adjustment for the undercast amount should be recorded in the Cash Book. This can be done by writing a narration explaining the adjustment and the reason for it.
Example
Suppose the balance as per Pass Book is Rs. 50,000. On comparing the Cash Book with the Pass Book, it is found that a receipt of Rs. 5,000 has been undercast in the Cash Book. The treatment of undercasting of receipt side of Cash Book will be as follows:
- Deduct the undercast amount of Rs. 5,000 from the balance as per Pass Book:
Balance as per Pass Book = Rs. 50,000 - Rs. 5,000 = Rs. 45,000
- Record the adjustment in the Cash Book with a narration:
Cash Book:
Receipt side
To adjust undercast of Rs. 5,000
By deducting the undercast amount, the correct balance as per Cash Book of Rs. 45,000 is reflected, and the adjustment is recorded in the Cash Book.
The cash book showed an overdraft of Rs. 2,000 as cash at bank but the pass book upto the same date showed that cheques of Rs. 100, Rs. 150 and Rs. 175 have not been presented for payments; and the cheque of Rs. 600 deposited into account has not been cleared. The overdraft as per pass book will be:- a)Rs. 2,150
- b)Rs. 2,175
- c)Rs. 1,475
- d)Rs. 1,925
Correct answer is option 'B'. Can you explain this answer?
The cash book showed an overdraft of Rs. 2,000 as cash at bank but the pass book upto the same date showed that cheques of Rs. 100, Rs. 150 and Rs. 175 have not been presented for payments; and the cheque of Rs. 600 deposited into account has not been cleared. The overdraft as per pass book will be:
a)
Rs. 2,150
b)
Rs. 2,175
c)
Rs. 1,475
d)
Rs. 1,925
|
|
Puja Singh answered |
Overdraft = Rs.( 2000 - 100 - 150 - 175 + 600 )
= Rs. 2175
Bank column of a cash book of a trader shows a credit balance of Rs. 7,900 and the bank statement shows a debit balance of Rs. 10,300 on a particular date after payments made by the bank as per the standing orders. In the statement of affairs, the bank balance will be shown on:- a)Assets side Rs. 7,900
- b)Liabilities side Rs. 10,300
- c)Liabilities side Rs. 2,400
- d)Assets side Rs. 10,300
Correct answer is 'B'. Can you explain this answer?
Bank column of a cash book of a trader shows a credit balance of Rs. 7,900 and the bank statement shows a debit balance of Rs. 10,300 on a particular date after payments made by the bank as per the standing orders. In the statement of affairs, the bank balance will be shown on:
a)
Assets side Rs. 7,900
b)
Liabilities side Rs. 10,300
c)
Liabilities side Rs. 2,400
d)
Assets side Rs. 10,300
|
Ritika Iyer answered |
Explanation:
The bank column of a cash book shows the balance of the trader's account with the bank. On a particular date, the bank column of the cash book shows a credit balance of Rs. 7,900. This means that the trader has deposited Rs. 7,900 in the bank account.
However, the bank statement shows a debit balance of Rs. 10,300. This means that the bank has paid out Rs. 10,300 from the trader's account as per the standing orders.
Therefore, the actual balance of the trader's account with the bank on that particular date is a debit balance of Rs. 10,300. This balance will be shown on the liabilities side of the statement of affairs because it represents an amount that the trader owes to the bank.
Hence, the correct answer is option B, i.e., the bank balance will be shown on the liabilities side of the statement of affairs as Rs. 10,300.
The bank column of a cash book shows the balance of the trader's account with the bank. On a particular date, the bank column of the cash book shows a credit balance of Rs. 7,900. This means that the trader has deposited Rs. 7,900 in the bank account.
However, the bank statement shows a debit balance of Rs. 10,300. This means that the bank has paid out Rs. 10,300 from the trader's account as per the standing orders.
Therefore, the actual balance of the trader's account with the bank on that particular date is a debit balance of Rs. 10,300. This balance will be shown on the liabilities side of the statement of affairs because it represents an amount that the trader owes to the bank.
Hence, the correct answer is option B, i.e., the bank balance will be shown on the liabilities side of the statement of affairs as Rs. 10,300.
Closing stock in the trial balance implies that.- a)It is already adjusted in the opening stock.
- b)It is adjusted in sales a/c
- c)It is adjusted in the purchase a/c
- d)None of these.
Correct answer is option 'C'. Can you explain this answer?
Closing stock in the trial balance implies that.
a)
It is already adjusted in the opening stock.
b)
It is adjusted in sales a/c
c)
It is adjusted in the purchase a/c
d)
None of these.
|
|
Nandini Iyer answered |
Closing stock is the leftover balance out of goods which were purchased during an accounting period. Total purchases are already included in the trial balance, Hence closing stock should not be included in the trial balance again. If it is included, the effect will be doubled.
Balances of the accounts are transferred to : - a)Trial Balance
- b)Trading Account
- c)Profit & Loss Account
- d)Balance sheet
Correct answer is option 'A'. Can you explain this answer?
Balances of the accounts are transferred to :
a)
Trial Balance
b)
Trading Account
c)
Profit & Loss Account
d)
Balance sheet
|
|
Arun Khanna answered |
A trial balance is a listing of the ledger accounts and their debit or credit balances to determine that debits equal credits in the recording process. Note that totals for the Debit and Credit entries come from the ending balance of the T-accounts or ledger cards.
Trial Balance under balance method is known as :- a)Gross Trial Balance
- b)Net Trial Balance
- c)Simple Trial balance
- d)Trial Balance Appropriation
Correct answer is option 'B'. Can you explain this answer?
Trial Balance under balance method is known as :
a)
Gross Trial Balance
b)
Net Trial Balance
c)
Simple Trial balance
d)
Trial Balance Appropriation
|
|
Arun Khanna answered |
Under the Balance Method of trial preparation, every ledger account is balanced and the balances thus determined are only carried forward to the trial balance. Since the balances of the ledger accounts are placed in the trial, it is known as Net Trial Balance. Under the Total Method of trial preparation, the totals of each side of ledger account are placed on trial balance. This is known as gross trial balance.
Goods of Rs. 1,000 purchased from Mr. “A” were recorded in sales book, the rectification of this error will?- a)Increase the gross profit
- b)Reduce the gross profit
- c)Have no effect on gross Profit
- d)None of the given options
Correct answer is option 'B'. Can you explain this answer?
Goods of Rs. 1,000 purchased from Mr. “A” were recorded in sales book, the rectification of this error will?
a)
Increase the gross profit
b)
Reduce the gross profit
c)
Have no effect on gross Profit
d)
None of the given options
|
|
Raghav Ghoshal answered |
Can you please provide more details?
Sales of Rs. 1,540 to Mr. X was posted to his account as Rs. 1450. To rectify the error, Rs. 90 will be _________to X ‘s Account :- a)Debited
- b)Credited
- c)ignored
- d)Either (a) or (b)
Correct answer is option 'A'. Can you explain this answer?
Sales of Rs. 1,540 to Mr. X was posted to his account as Rs. 1450. To rectify the error, Rs. 90 will be _________to X ‘s Account :
a)
Debited
b)
Credited
c)
ignored
d)
Either (a) or (b)
|
|
Nipun Tuteja answered |
In this scenario, sales of Rs. 1,540 to Mr. X were under-recorded in his account as Rs. 1,450. This means that Mr. X's account was credited less than it should have been by Rs. 90.
To rectify this error, the difference needs to be addressed by adding Rs. 90 to Mr. X's account to match the correct amount of sales that should have been credited. Since sales are typically recorded by crediting a customer's account, the rectification will involve crediting Mr. X's account with the missing Rs. 90.
Thus, the correct action to rectify the error is: B: Credited
This means that Rs. 90 will be credited to Mr. X’s account to make up for the under-credited amount previously posted.
What will be the effect when return inward is wrongly entered as return outward?- a)Gross Profit is increased by Rs. 100
- b)Gross Profit is decreased by Rs. 100.
- c)Gross Profit is increased by Rs. 200.
- d)Gross Profit is decreased by Rs. 200.
Correct answer is option 'C'. Can you explain this answer?
What will be the effect when return inward is wrongly entered as return outward?
a)
Gross Profit is increased by Rs. 100
b)
Gross Profit is decreased by Rs. 100.
c)
Gross Profit is increased by Rs. 200.
d)
Gross Profit is decreased by Rs. 200.
|
|
Nipuns Institute answered |
Let's analyze the effect of wrongly entering return inward (sales returns) as return outward (purchase returns):
- Return Inward as Return Outward: If sales returns are mistakenly recorded as purchase returns, it affects both sales and purchase figures:
- Sales: They are overstated because the returns that should have reduced the sales are not recorded.
- Purchases: They are understated because the entries increase the amount of returns, which decreases the net purchases.
- Net Effect on Gross Profit: Gross Profit (G.P.) is calculated as Sales minus Cost of Goods Sold (COGS). Here’s the impact:
- Sales are higher by the amount of the return (let's assume Rs. 100).
- Purchases are lower by the same amount (Rs. 100), which implies COGS is also lower by Rs. 100.
- Combined Impact:
- The sales not decreasing by Rs. 100 (when they should have due to returns) effectively increases the G.P. by Rs. 100.
- The purchases being reduced by Rs. 100 (mistakenly increasing returns) further reduces the COGS, increasing the G.P. by another Rs. 100.
Therefore, the total increase in G.P. is Rs. 100 + Rs. 100 = Rs. 200.
The correct choice reflecting this scenario is: C: Gross Profit is increased by Rs. 200.
Bill accepted by Govinda was discounted with the bank for Rs. 2000. On the due date the bill was dishonoured. However, there is error of Omission towards Bills dishonoured. Journal Entry for rectification will be:-- a)B/R A/c Dr.
To Bank A/c - b)Govinda’s A/c Dr.
To Bank B/R A/c - c)Govinda’s A/c Dr.
To Bank A/c - d)Bank A/c Dr.
To B/R A/c
Correct answer is option 'C'. Can you explain this answer?
Bill accepted by Govinda was discounted with the bank for Rs. 2000. On the due date the bill was dishonoured. However, there is error of Omission towards Bills dishonoured. Journal Entry for rectification will be:-
a)
B/R A/c Dr.
To Bank A/c
To Bank A/c
b)
Govinda’s A/c Dr.
To Bank B/R A/c
To Bank B/R A/c
c)
Govinda’s A/c Dr.
To Bank A/c
To Bank A/c
d)
Bank A/c Dr.
To B/R A/c
To B/R A/c
|
|
Anuj Roy answered |
A/c Dr. To B/R A/c
Explanation:
The correct journal entry for rectification of the error of omission towards bills dishonoured would be:
B/R A/c Dr. To Govinda A/c
Explanation:
When the bill accepted by Govinda was discounted with the bank, the following journal entry would have been passed:
Bank A/c Dr. To B/R A/c
On the due date, when the bill was dishonoured, the following journal entry would have been passed:
B/R A/c Dr. To Govinda A/c
However, the error of omission towards bills dishonoured was made and the above journal entry was not passed. Therefore, to rectify the error, the correct journal entry would be:
B/R A/c Dr. To Govinda A/c
This entry will increase the B/R account, which was reduced when the bill was discounted with the bank. It will also increase the liability of Govinda towards the bill, which was reduced when the bill was discounted with the bank.
Explanation:
The correct journal entry for rectification of the error of omission towards bills dishonoured would be:
B/R A/c Dr. To Govinda A/c
Explanation:
When the bill accepted by Govinda was discounted with the bank, the following journal entry would have been passed:
Bank A/c Dr. To B/R A/c
On the due date, when the bill was dishonoured, the following journal entry would have been passed:
B/R A/c Dr. To Govinda A/c
However, the error of omission towards bills dishonoured was made and the above journal entry was not passed. Therefore, to rectify the error, the correct journal entry would be:
B/R A/c Dr. To Govinda A/c
This entry will increase the B/R account, which was reduced when the bill was discounted with the bank. It will also increase the liability of Govinda towards the bill, which was reduced when the bill was discounted with the bank.
The overdraft as per cash book of Mr. X is Rs. 20,500. One of the customer of Mr. X residing in Mumbai directly remitted Rs. 50,000 into Mr. X’s account, about which Mr. X was not aware. One of the cheques deposited into bank for Rs. 25,000 was returned unpaid and the advice in this regard is yet to be received by Mr. X. The balance as per Pass book was:- a)Rs. 4,500 credit
- b)Rs. 4,500 overdraft
- c)Rs. 45,500 credit
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
The overdraft as per cash book of Mr. X is Rs. 20,500. One of the customer of Mr. X residing in Mumbai directly remitted Rs. 50,000 into Mr. X’s account, about which Mr. X was not aware. One of the cheques deposited into bank for Rs. 25,000 was returned unpaid and the advice in this regard is yet to be received by Mr. X. The balance as per Pass book was:
a)
Rs. 4,500 credit
b)
Rs. 4,500 overdraft
c)
Rs. 45,500 credit
d)
None of the above
|
Srsps answered |
The correct option is A.
Overdraft as per cash book is 20500.
Since 50000 is received by the bank, it is recorded in pass book but not in cash book. So it has to be added in cash book. Also cheques deposited are returned unpaid. So they will be subtracted. So balance as per pass book= -20500+50000-25000=4500 (credit)
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Accounting for Grade 9
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