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Double entry system - class-XI

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Book-keeping enables investors to take a decision whether to invest or not.

  1. True

  2. False


Correct Option: A
Explanation:

Bookkeeping allows investors to have up-to-date and accessible information. Investors will be able to make better, well informed, decisions which is the ultimate purpose of bookkeepingBookkeeping is not only for current investors but for future investors too.

Various departments of government will be able to find out the taxes due from various sources with the help of books of accounts.

  1. True

  2. False


Correct Option: A
Explanation:

The above statement is true.

Government can access books of accounts of business from various source of the to find out the taxes due.

For which of the following adjustments would a reversing entry facilitate book-keeping procedures?

  1. Adjustment for depreciation expense

  2. Adjustment to allocate prepaid insurance to the current period

  3. Adjustment made as a result of inventory of supplies

  4. Adjustment for drawings in goods


Correct Option: B

According to the double entry system of accounting, an account that obtains benefit is __________.

  1. Credit

  2. Debit

  3. Income

  4. Need not to show in accounting records


Correct Option: A

There are ______ systems of keeping records.

  1. Single Entry System & Double Accounts System

  2. Single Account System & Double Accounts System

  3. Single Entry System & Double Entry System

  4. Single Entry System & Duplicate Accounts System


Correct Option: C

Which of the following is/are merit of double entry system?

  1. It keeps a complete record of business transactions.

  2. It provides a check on the arithmetical accuracy of accounts.

  3. The detailed profit and loss account can be prepared to show profit earned or loss suffered during any given period.

  4. All of the above


Correct Option: D

Book-keeping helps the management in _____________.

  1. Planning

  2. Decision making

  3. Controlling

  4. All of the above


Correct Option: D
Explanation:

Bookkeeping enables the small business owner to support expenditures made for the business in order to claim all available tax credits and deductions. It also provides detailed, accurate, and timely records that can prove invaluable to management decision-making, or in the event of an audit.

Which of the following is/are the advantage of double entry system of book-keeping?

  1. It helps to find out profit, losses, assets and liabilities in the business at any time.

  2. It helps the management in planning, decision making, controlling and managing the overall business activities.

  3. It enables investors to take a decision whether to invest or not.

  4. All of the above


Correct Option: D

Double entry system of book-keeping refers to a system where, _____________________.

  1. the number of accounts with a debit balance must agree with the number of accounts with the credit balance

  2. each transaction is recorded twice, once in journal and then in ledger

  3. equal debit and credit entries are made for each transaction

  4. each transaction is recorded in two set of account book


Correct Option: C
Explanation:

Double Entry System of accounting is based on the dual aspect of accounting. It says that every transaction will have two effects in books of account.

For every debit , there will a credit of similar amount and vice versa. 

For example, Goods worth Rs. 1000 purchased for cash. There are 02 accounts which are affecting here i.e. cash is going out of Rs.1000 and Goods are coming for Rs.1000.

Hence, it is true that equal debit and credit entries are made for each transaction. 

Double entry book keeping system is most scientific system of recording business transactions.

  1. True

  2. False


Correct Option: A
Explanation:

"The specific technique which reflects the concept of duality is known as double entry book-keeping."-Lewis and Gillespie.

It is the most common system of bookkeeping whereby the two aspects of every transaction i.e., the receiving aspect (debit) and the giving aspect (credit) are recorded in the books of accounts. It is based on the 'dual aspect concept'.
This method of writing every transaction in two different accounts on opposite sides for equal value is known as the double entry system of book keeping. This is the most accurate, complete and scientific system of accounting. 

The Double Entry System of accounting originated in _________.

  1. America

  2. Russia

  3. Italy

  4. England


Correct Option: C
Explanation:
Double entry accounting system first invented in Italy by a church father who's named Luca Bartolomes Pacioli. He was the mathematician and contemporary of Leonardo Da Vinci.

Double Entry Principle means _____________________.

  1. having debit for every credit and similarly, credit for each debit

  2. writing all the entries twice in the book

  3. maintaining the double account for all business transactions

  4. writing two times the same entry


Correct Option: A
Explanation:
Double entry means that every transaction will involve at least two accounts. For example, if your company borrows money from the bank, the company's asset Cash is increased and the company's liability Notes Payable is increased. ... Double entry also requires that one account be debited and the other account be credited.

In double entry system of book-keeping every business transaction affects _____________.

  1. two accounts

  2. two sides of the same account

  3. the same account on two different dates

  4. all of the above


Correct Option: A
Explanation:

Because every business transaction affects at least two accounts, our accounting system is known as a double-entry system.  For example, when a company borrows $1,000 from a bank, the transaction will affect the company's Cash account and the company's Notes Payable account.

The accounting system which records both the aspects i.e. debit and credit, of all the transactions is known as _____________.

  1. Double entry system

  2. Single entry system

  3. Double account system

  4. Inflation accounting system


Correct Option: A
Explanation:

 Double-entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account. The double-entry has two equal and corresponding sides known as debit and credit. The left-hand side is debit and right-hand side is credit.

In double Entry system of Book-keeping every business transaction affects __________.

  1. Two accounts.

  2. Two sides of the same account.

  3. The same account on two different dates.

  4. All of these.


Correct Option: A
Explanation:

Because every business transaction affects at least two accounts, our accounting system is known as a double-entry system. 

For example, when a company borrows $1,000 from a bank, the transaction will affect the company's Cash account and the company's Notes Payable account.

The system of recording transactions based on dual aspect concept is _____________.

  1. Double account system

  2. Double entry system

  3. Single entry system

  4. Incomplete system


Correct Option: B
Explanation:

The system of recording transactions based on dual aspect is called as double entry system.

The term "Double Entry System" implies that __________.

  1. It records two-fold effect of every transaction

  2. Every financial transaction is recorded twice

  3. Two accounts are maintained for each financial transaction

  4. None of the above


Correct Option: A
Explanation:

The double-entry system of accounting or bookkeeping means that for every business transaction, amounts must be recorded in a minimum of two accounts. The double-entry system also requires that for all transactions, the amounts entered as debits must be equal to the amounts entered as credits.

State with reasons whether the following statement is true or false.
Revenue are matched with expenses in accordance with the matching principle.

  1. True

  2. False


Correct Option: A
Explanation:

The matching concept involves that the revenue earned in an accounting year is matched with the expenses incurred during the same period to generate that revenue.

State with reasons whether the following statement is true or false.
In double account, all business transactions are recorded as having dual aspect.

  1. True

  2. False


Correct Option: A
Explanation:

The dual aspect concept indicates that each transaction made by a business needs to be recorded in two separate accounts.

Whenever a transaction occurs there is a two-sided effect, one is credit and the other is debit for a similar amount.

In double account, all business transactions are recorded as having dual aspect.

In double entry system of book-keeping every business transaction affects ________________________.

  1. Two accounts with equal but opposite effect.

  2. Two sides of the same account.

  3. The same account on two different dates.

  4. All of the above


Correct Option: A
Explanation:

 The double entry system of bookkeeping is based on the fact that every transaction has two parts and that this will therefore affect two ledger accounts. Every transaction involves a debit entry in one account and a credit entry in another account.

Which system of accounts recognizes the fact that every transaction has two aspects and records both aspects of each and every transaction?

  1. Single entry system

  2. Double entry system

  3. Double account system

  4. Duplicate account system


Correct Option: B
Explanation:

On the other hand, the double entry system is based on scientific principles and is, therefore, used by most of the business houses. 

The system recognizes the fact that every transaction has two aspects and records both aspects of each and every transaction.

Which of the following is/are merit of double entry system?

  1. It keeps a complete record of business transactions.

  2. It provides a check on arithmetical accuracy of accounts

  3. The detailed profit and loss account can be prepared to show profits earned or loss suffered during any given period.

  4. All of the above


Correct Option: D

As per the provisions of the Companies Act, 2013, companies must maintain their accounts under __________________.

  1. Double account system

  2. Single entry system

  3. Double entry system

  4. Duplicate account system


Correct Option: C
Explanation:

Companies Act, 2013 requires every company to keep and maintain at its registered head office books of accounts and relevant documents and the financial statements for each FY (financial year) that provides a true and fair picture of the company's state of affairs which includes its branch offices and other offices.

Double Entry principle means __________________.

  1. Writing all entries twice in the book

  2. Having debit for every credit and similarly, credit for every debit

  3. Maintaining the double account for each business transactions

  4. Writing two times the same entry


Correct Option: B
Explanation:

Real account is an record of an asset. An asset can be current asset such as cash, a fixed asset such as building and intangible asset such as goodwill. Real account relate to the assets & liabilities of a business.

The correct concept of double entry book keeping states that ____________________.

  1. For every goods received on credit, the seller becomes your creaditor

  2. For every debit entry, there must be a corresponding credit entry

  3. For every seller, there must be a buyer

  4. One party receives and another party give value


Correct Option: B

The accounting entries for recording Rs.10,00,000 cash introduced by the owner of a business is ______________.

  1. Debit Cash account and Credit Capital account

  2. Debit Cash account and Credit Investment account

  3. Credit Cash account and Debit Investment in business account

  4. Credit Cash account and Debit Owner's account


Correct Option: A

When a liability is reduced or decreased, it is recorded on the ______________.

  1. left or credit side of the liability account

  2. right or debit side of the liability account

  3. right or credit side of the liability account

  4. left or debit side of the liability account


Correct Option: D
Explanation:

Since the Liability shows credit balance as per the accounting equation. When a liability is reduced or decreased, it is recorded on the debit side of the liability account.

Double entry in cash book is completed when _________________.

  1. Salaries are paid by cheque

  2. Withdrawal of money from bank for personal use

  3. Deposited cash into bank

  4. None of these


Correct Option: C
Explanation:

Option C is correct.

Deposited cash into bank Entry will be :-      Bank A/c Dr.
                                                                          To Cash A/c

Deposited cash into bank has effect on both Cash & Bank A/c.

As the book keeper, identify the account to which you will post the following transaction recorded by the Cashier in the cash account:
Rs. 500 paid to buy a cash book and ledger book _________________.

  1. Stationery Account

  2. Accounting books Account

  3. Purchases Account

  4. None of the above


Correct Option: A
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