A bill has been drawn on 26.02.2010 payable after 90 days. The maturity date of the bill will be –
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Solution
the maturity date will be 93 (90 + 3 days of grace) days after 26.2.2010. Thus 30.5.2010 will be maturity date.
Which of the following error is an error of principle?
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Solution
Wages paid to Ram debited wrongly to his account is an error of principle. All others are errors of commission.
Which of the following account will have debit balance?
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Solution
Loan to contractor (receivable) will have a debit balance. All others will be having credit balances.
B/R is a
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Solution
Bills receivable is a current asset. It is not fixed, fictitious and intangible.
Withdrawal column of the Pass Book showed a wrong entry of Rs. 112. When the balance as per Cash Book is the starting point.
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Solution
Rs. 112 need to be subtracted while preparing Bank Reconciliation to arrive at the balance as per passbook.
What is the order in which the accounting transactions and events are recorded in the books?
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Solution
The correct order is Journal Entries, Ledger positngs, P&L A/c and preparation of balance sheet.
Out of the following at which point the treatment of “Sales” and “Consignment” is same:
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Solution
Stock outflow is in both cases — sales and consignment.
On March 31, 2010 Narain Enterprises purchased a loader from Laxmi Motors for Rs.1,75,000 which is shown in the balance sheet as on 31st March, 2010. This is –
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Solution
Purchase is transaction and loader’s existence as on 31st March, 2010 is an event.
Insurance unexpired account is a
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Solution
Insurance unexpired is a personal account (belonging to Insurance company).
Commission received in advance account has a
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Solution
Commission received in advance will have credit balance as it is liability.