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Questions and Answers
What are two key differences between Book Keeping and Accounting?
What are two key differences between Book Keeping and Accounting?
Book Keeping focuses on recording financial transactions, while Accounting involves summarizing, interpreting, and reporting the financial data.
Which component is not included in a bill of exchange: Payee, Signatory, Drawee, or Drawer?
Which component is not included in a bill of exchange: Payee, Signatory, Drawee, or Drawer?
Signatory.
What are the journal entries for starting a business with cash of ₹1,50,000?
What are the journal entries for starting a business with cash of ₹1,50,000?
Debit Cash Account ₹1,50,000 and Credit Capital Account ₹1,50,000.
Is the statement 'Financial Statements are prepared just to know the profits earned or loss incurred' correct? Explain your reasoning.
Is the statement 'Financial Statements are prepared just to know the profits earned or loss incurred' correct? Explain your reasoning.
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What is the operating profit calculated from the net profit of ₹1,50,000 and other components such as rent received and donations?
What is the operating profit calculated from the net profit of ₹1,50,000 and other components such as rent received and donations?
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Study Notes
Journal Entries for 2015
- January 1: Started business with cash ₹1,50,000
- January 2: Cash purchases ₹52,000
- January 3: Sold goods to Ram ₹10,000
- January 6: Returned defective goods by Ram ₹2,000
- January 8: Paid rent ₹1,800
- January 10: Withdrew from bank for house rent ₹6,000
Accounting Terms Explained
- Stock: Represents goods held for sale in the ordinary course of business.
- Loss: Represents a decrease in ownership value.
- Depreciation: A decrease in the value of an asset over time due to wear and tear or obsolescence.
Financial Statements Explanation
- Financial statements are used to track profits and losses over a specific period.
Operating Profit Calculation
- Net Profit: ₹1,50,000
- Rent Received: ₹15,000
- Gain on Sale of Machine: ₹20,000
- Interest on Loans: ₹35,000
- Donation: ₹5,000
- Operating Profit: ₹1,45,000
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Description
This quiz covers the journal entries and accounting concepts for the year 2015. You will explore key terms such as stock, loss, depreciation, and operating profit. Test your knowledge on the financial transactions and calculations involved in business accounting.
