Test: Recording Of Transactions - 1 - Commerce MCQ

# Test: Recording Of Transactions - 1 - Commerce MCQ

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## 10 Questions MCQ Test Accountancy Class 11 - Test: Recording Of Transactions - 1

Test: Recording Of Transactions - 1 for Commerce 2024 is part of Accountancy Class 11 preparation. The Test: Recording Of Transactions - 1 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Recording Of Transactions - 1 MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Recording Of Transactions - 1 below.
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Test: Recording Of Transactions - 1 - Question 1

### Q  The Basic accounting equation is

Detailed Solution for Test: Recording Of Transactions - 1 - Question 1

Assets = Capital + Liabilitiess is the basic accounting equation. The fundamental accounting equation, also called the balance sheet equation, represents the relationship between the assets, liabilities, and owner's equity of a person or business. It is the foundation for the double-entry bookkeeping system.

Test: Recording Of Transactions - 1 - Question 2

### To find the net income we deduct _________ from total revenue.

Detailed Solution for Test: Recording Of Transactions - 1 - Question 2

To calculate the net goods, other expenses - including taxes - have to be deducted as well. Thus, the formula for calculating it:
Total revenue - total expenses = net income.

Net income, in deducting other expenses, involves more than just the most direct expenses related to the product sold.

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Test: Recording Of Transactions - 1 - Question 3

### Transfer voucher is prepared for

Detailed Solution for Test: Recording Of Transactions - 1 - Question 3

Non-Cash or Transfer vouchers are the documentary evidence of non-cash transactions. These vouchers are prepared to record the non-cash transactions of the business. Examples of non-cash vouchers are: Goods sold on Credit; Sale of Fixed Assets or Investment on Credit; Writing-off depreciation or Bad Debts, Returns Inward, etc.

Test: Recording Of Transactions - 1 - Question 4

The owner withdraws cash from the business for personal use. Then,

Detailed Solution for Test: Recording Of Transactions - 1 - Question 4
• The company's asset account Cash will decrease.
• Liabilities are not involved in this transaction.
• The proprietorship's owner's equity decreases by an entry to the Drawing account. If the company is a corporation, Stockholders' Equity will decrease by an entry to Retained Earnings or to Dividends.
Test: Recording Of Transactions - 1 - Question 5

Payment of expenses will ______ the assets

Detailed Solution for Test: Recording Of Transactions - 1 - Question 5

Payment of expenses will reduce the assets. When an expense is recorded at the same time it is paid for with cash, the cash (asset) account declines, while the amount of the expense reduces the retained earnings account.

Test: Recording Of Transactions - 1 - Question 6

Which source of document is prepared by the seller of the goods on credit?

Detailed Solution for Test: Recording Of Transactions - 1 - Question 6

Invoice is the business document which is prepared by the seller when he sells goods on credit. It is the evidence of business transaction being takes place. It is the source document.

Test: Recording Of Transactions - 1 - Question 7

Fresh capital introduction will increase

Detailed Solution for Test: Recording Of Transactions - 1 - Question 7

When fresh capital is introduced into a business, it increases both Assets and Equity. Here's a detailed explanation:

- Assets: Assets are everything that a company owns that has value. These include cash, inventory, and property. When fresh capital is introduced, it is usually in the form of cash or other assets that the company can use to grow its business. This means that the total assets of the company will increase.

- Equity: Equity represents the ownership interest in the company. When fresh capital is introduced, it is typically done by issuing new shares or through owner's contributions. This increases the equity of the company as the ownership interest in the company expands.

So, when fresh capital is introduced, it will lead to an increase in both assets (such as cash or other valuable resources) and equity (ownership interest in the company). This is because the new capital is used to either purchase more assets or to increase the ownership stake in the company.

Test: Recording Of Transactions - 1 - Question 8

If a cash book is prepared then there is no need to prepare the _______

Detailed Solution for Test: Recording Of Transactions - 1 - Question 8

When cash book is prepared, there is no need to prepare cash account because question of recording credit transactions does not arise, as it records only cash transactions. Hence, the balances of cash book are directly entered in the trial balance.

Test: Recording Of Transactions - 1 - Question 9

Return of goods purchased on credit to the suppliers will be entered in ____ Book.

Detailed Solution for Test: Recording Of Transactions - 1 - Question 9

Return of goods purchased on credit to the supplier is recorded in the Purchase return journal. Sometimes goods purchased are returned to the supplier for various reasons such as goods are not of the required quality, or are defective, etc. For every return, a debit note is prepared , the original one is sent to the supplier for making necessary entries in his book and on the basis of duplicate copy of debit note entry is recorded in purchase return journal.

Test: Recording Of Transactions - 1 - Question 10

Items owned by a business that have monetary value are ____

Detailed Solution for Test: Recording Of Transactions - 1 - Question 10

Items owned by a business that have monetary value are called as an assets. Assets may be classified as current assets ,fixed assets ,ficitious assets. Assets have a depreciation value after its use.

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## Accountancy Class 11

82 videos|105 docs|42 tests