Chapter 1: Introduction to Book - Keeping and Accountancy
Answer in One Sentence:
What is Book-keeping?
SOLUTION:
Book-keeping is the science and art of correctly recording in the books of accounts, all those business transactions that result in the transfer of money or money’s worth.
What is meant by Goods?
SOLUTION:
The term Goods refers to merchandise, commodities, articles, or things in which a trader trades.
What is Capital?
SOLUTION:
The total amount invested in the business by the owner is called Capital. Excess of assets over the liabilities is known as Capital.
What is Drawings?
SOLUTION:
The amount of cash or value of goods, assets, etc. withdrawn from the business by the owner for personal use is known as Drawings.
What is Goodwill?
SOLUTION:
Goodwill means the aggregate of those intangible attributes of a business which contributes to its superior earning capacity over a normal return on investments.
Give the word term or phrase which can substitute the following statement:
Recording of business transactions.
SOLUTION:
Recording of business transactions. - Bookkeeping
Amount invested in business by the proprietor.
SOLUTION:
Amount invested in business by the proprietor. - Capital
A person to whom amount is payable.
SOLUTION:
A person to whom amount is payable. - Creditor
Exchange between two persons.
SOLUTION:
Exchange between two persons. - Transaction
Excess of expenses over income.
SOLUTION:
Excess of expenses over income. - Loss
A person whose assets are sufficient enough to meet business obligations.
SOLUTION:
A person whose assets are sufficient enough to meet business obligations. - Solvent person
Book-keeping is providing all required financial information to the businessman.
SOLUTION:
Book-keeping is providing all required financial information to the businessman. - Decision making
Property of any description owned by Proprietor.
SOLUTION:
Property of any description owned by Proprietor. - Assets
Assets which remain in the business for only for short time and can be converted into cash very easily.
SOLUTION:
Assets which remain in the business for only for short time and can be converted into cash very easily. - Current assets
Allowance is given on catalogue price of goods
SOLUTION:
Allowance is given on catalogue price of goods. - Trade discount
Select the most appropriate alternative from the given below and rewrite the statement.
Surplus of income over expenses is ______________.
Options
Profit
Deficit
Loss
Financial Statements
SOLUTION:
Surplus of income over expenses is Profit.
In ____________ basis of accounting, actual cash receipts and actual cash payments are recorded.
Options
Accrual
Hybrid
Cash
Mercantile
SOLUTION:
In Cash basis of accounting, actual cash receipts and actual cash payments are recorded.
Amount which is not recoverable from customer is known as ______________.
Options
Bad Debts
Debts
Debtors
Doubtful debts
SOLUTION:
Amount which is not recoverable from customer is known as Debts.
Accounts must be honestly prepared and they must disclose all material information is known as _________.
Options
Entity Concepts
Dual Aspect Concept
Disclosure Concept
Cost Concept
SOLUTION:
Accounts must be honestly prepared and they must disclose all material information is known as Disclosure Concept.
A commodity in which a trader deals is known as _______________.
Options
Goods
Income
Property
Expenditure
SOLUTION:
A commodity in which a trader deals is known as Goods.
_________ means a reputation of a business valued in terms of money.
Options
Trademark
Assets
Patents
Goodwill
SOLUTION:
Goodwill means a reputation of a business valued in terms of money.
Cash flow statement is prepared and presented for the period for which the profit and loss account is prepared
Options
AS-3
AS-10
AS-6
AS-2
SOLUTION:
AS-3
The immediate recognition of loss is supported by principle of __________.
Options
Conservatism
Objective
Matching
Consistency
SOLUTION:
The immediate recognition of loss is supported by the principle of Conservatism.
Brief explanation of an entry is called as _________.
Options
Folio
Narration
Posting
Journalising
SOLUTION:
Brief explanation of an entry is called as Narration.
An act of exchange of things or services between the two parties is termed as______.
Options
Ledger
Transfer
Transaction
Business
SOLUTION:
An act of exchange of things or services between the two parties is termed as Transaction.
State whether the following statement is true or false with reasons:
Book-keeping and accounting are one and the same thing.
Options
True
False
SOLUTION:
This statement is False.
Bookkeeping and accounting are not one and the same thing. Book-keeping is the art of recording business transactions in a set of books whereas accounting refers to analysis and interpretation of book-keeping records. Book-keeping itself is a part and parcel of accounting.
Conservatism means to follow the safe side.
Options
True
False
SOLUTION:
This statement is True.
As per the conservatism concept always consider probable loss and avoid the probable profit. Therefore, we can say that conservatism means to follow the safe side.
The double entry system is based on “Dual Aspect” concept.
Options
True
False
SOLUTION:
This statement is True.
As per dual aspect concept, in every transaction. Every debit has its corresponding and equal credit effect, which is always followed in the double-entry system.
Bank overdraft is an asset of the business.
Options
True
False
SOLUTION:
This statement is False.
The amount withdrawn by the Current Accountholder in excess of the balance in his Current Account up to a predetermined limit decided by the bank on the basis of security offered is called Bank Overdraft. It is a temporary loan given by the bank to the Current Accountholder. It is a liability of the business.
Solvent person is a person whose assets are more than his liabilities.
Options
True
False
SOLUTION:
This statement is True.
As per the definition of solvent, a person can be a solvent person when a person’s assets are more than its liabilities.
Cash discount does not appear in the books of accounts.
Options
True
False
SOLUTION:
This statement is False.
For the encouragement of the prompt payment, the seller allows some discount to their buyers and it is an expense for the seller. Therefore, cash discount, as an expense, will appear in the book of account.
A transaction is concerned with money or money’s worth
Options
True
False
SOLUTION:
This statement is True.
In the business, the transaction having monetary value should be recorded in the books of accounts, which means a transaction must be concerned with money or money‘s worth.
Accounting is the language of business.
Options
True
False
SOLUTION:
This statement is True.
Accounting means how you record, classify, or analyse the business transactions which suggest that accounting is the language of business.
In civilization, accounting was done by owners.
Options
True
False
SOLUTION:
This statement is False.
In ancient time, accounting was done and periodically prepared by the agents of wealthy people, who managed their properties and accounts, for their boss, means accounting was not done by owners.
Book-keeping is useful to find out all tax liabilities.
Options
True
False
SOLUTION:
This statement is True.
To find out the tax liabilities of the business, business transaction classification is useful which is possible only in Book-keeping.
Do you agree or disagree with the following statements :
Accounting is useful only to the owner.
agree
disagree
Book-keeping is an art, science and profession.
Agree
Disagree
Bills Payable is an asset of the business.
Agree
Disagree
In Book-keeping and Accountancy, only non-monetary transactions are recorded.
Agree
Disagree
Totalling of Journal or Ledger is called as casting.
Agree
Disagree
Complete the following sentence:
Revenue arising as a result of business transactions is known as ____________
SOLUTION:
Revenue arising as a result of business transactions is known as Income
Excess of gross profit over operating expenses is______
SOLUTION:
Excess of gross profit over Operating expenses is operating profit.
An expenditure which is basically revenue in nature but benefit of which is not exhausted within one year is called as ____________
SOLUTION:
An expenditure which is basically revenue in nature but the benefit of which is not exhausted within one year is called as deferred revenue expenditure.
The amount deducted by the seller from the list price of goods at the time of sale is ____________
SOLUTION:
The amount deducted by the seller from the list price of goods at the time of sale is a trade discount.
A person to whom business owes money for the goods or services is known as ____________
SOLUTION:
A person to whom business owes money for the goods or services is known as the creditor.
Balbharati Solutions for Book-keeping and Accountancy 11th Standard HSC Maharashtra State Board Chapterwise List - Free
Chapter 1: Introduction to Book - Keeping and Accountancy
Chapter 2: Meaning and Fundamentals of Double Entry Book-Keeping
Chapter 6: Bank Reconciliation Statement
Chapter 8: Rectification of Errors
Chapter 9: Final Accounts of a Proprietary Concern
Chapter 10: Single Entry System
