Accounting MCQs with Explanations

Explanation

D. The favourable bank balance as per Pass Book will be less than the bank balance as per Cash Book, since the debit in the bank account is more than the debit in the Cash Book D.. As debit and credit are for equal amount there is no disagreement of the Trial Balance; Creditors balance is overstated but not understated: The favourable bank balance as per Pass Book will be less than the Bank balance as per Cash Book, since the debit in the Bank Account is more than the debit in the Cash book. Purchases are not affected, as it is a payment to the creditor. Thus, the correct answer is D.

Explanation

Differences in Bank Balance as per Bank Pass Book and Cash Book arise due to many reasons. Few of them are Cheques issued (a credit entry in Cash Book made) but not presented for payment (so no corresponding entry in Pass Book). Cheques issued (a credit entry in Cash Book made) but dishonoured (so no corresponding entry made in Pass Book). In case of cheques deposited and credited by bank, entries in both Cash Book and the Bank Pass book are made, hence no difference arises. Hence option D. is the right option. Only in situations A. and B. result in difference

Explanation

Purchases Return (Journal) Book In this book, purchases returns of goods are recorded. Sometimes goods purchased are returned to the supplier for various reasons such as the goods are not of the required quality, or are defective, etc. For every return, a debit note (in duplicate) is prepared and the original one is sent to the supplier for making necessary entries in his book. The supplier may also prepare a note, which is called the credit note. The source document for recording entries in the purchases return journal is generally a debit note. A debit note will contain the name of the party (to whom the goods have been returned) details of the goods returned and the reason for returning the goods. Each debit note is serially numbered and dated.

Explanation

65,025 is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

Explanation

The main objective of providing depreciation is to find out the true Net Profit or Loss for an accounting period and to present a true and fair view of the state of affairs of the business. Providing funds for replacement is only an ancillary objective and not the main objective.]

Explanation

Cheques deposited and cleared is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

Explanation

Computers taken on hire by a business for a period of twelve months is not an asset because it is not owned by the business to be classified as asset. Thus, the correct answer is D.. Since it is not an asset it cannot be classified as any asset and other alternatives are not the correct answers.

Explanation

Deducted, Added is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.

Explanation

selling Expenses & administrative expenses is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.