Practice Test 72
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Following is not an example of external users

  • Solution

    Management is internal user. All others are external.

If two or more transactions of the same nature are journalized together having either the debit or the credit account common then that journal entry is known as

  • Solution

    This type of entry is called compound journal entry

All the expenditures and receipts of revenue nature go to

  • Solution

    All expenses and receipts of revenue nature go to P&L A/c or Trading A/c.

“Business unit” is separate and distinct from the persons who supply capital to it is based on __________

  • Solution

    As per entity concept, business unit is separate from providers of capital.

When adjusted purchase is shown in the debit column of the trial balance then

  • Solution

    Closing inventory is shown in trial balance and not opening inventory if adjusted purchase is shown in trial balance.

Inventories should be out of godown in the sequence in which they arrive is based on

  • Solution

    FIFO is the basis for the sequence mentioned in the question.

Journal Proper records

  • Solution

    Journal proper records opening entries.

Who is the acceptor of Bills of Exchange?

  • Solution

    Customers (Debtors) are acceptors of bills of exchange.

Bank overdraft has a

  • Solution

    Bank overdraft has credit balance (liability).

Consignment account is a

  • Solution

    Consignment account is nominal.

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FUNDAMENTALS OF ACCOUNTING
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