Chapter 8 Bills of Exchange
Chapter 8 Bills of Exchange Short Answer Type Questions Question1. Name any two types of commonly used negotiable instruments. Solution: Cheques and Bills of exchange are the commonly used negotiable instruments. Question 2. Write two points of distinction between bills of exchange and promissory note. Solution: Question 3. State any four essential features of bill […]
Chapter 7 Depreciation, Provisions and Reserves
Chapter 7 Depreciation, Provisions and Reserves Short Answer Type Questions Question 1. What is ‘Depreciation’? Solution: Depreciation means fall in book value of depreciable fixed asset because of wear and tear of the asset passage/efflux of time obsolescence accident A machinery costing ₹ 1,00,000 and its useful life is 10 years; so, depreciation is calculated […]
Chapter 6 Trial Balance and Rectification of Errors
Chapter 6 Trial Balance and Rectification of Errors Short Answer Type Questions Question 1. State the meaning of a Trial Balance.Solution: Trial balance is a statement prepared to check the arithmetical accuracy of transactions recorded in the journal, posted into the ledger and balanced in the ledger accounts. The balance of ledger accounts shows the difference between […]
Chapter 5 Bank Reconciliation Statement
Chapter 5 Bank Reconciliation Statement Short Answer Type Questions Question 1. State the need for the preparation of bank reconciliation statement? Solution: The need and importance of the bank reconciliation statement are as follows: It ensures accuracy of the balances and records shown by the pass book and cash book. It detects the errors which […]
Chapter 4 Recording of Transactions-II
Chapter 4 Recording of Transactions-II Short Answer Type Questions Question 1. Briefly state how the cash book is both journal and a ledger? Answer : Transactions are recorded directly from source documents in the Cash Book, so there is no need to record transactions in the Journal book. Further, on the basis of the cash transactions […]
Chapter 3 Recording of Transactions-I
Chapter 3 Recording of Transactions-I Short Answer Type Questions Question 1. State the three fundamental steps in the accounting process. Answer : The fundamental steps in the accounting process are diagrammatically presented below. Question 2. Why is the evidence provided by source documents important to accounting? Answer : The evidence provided by the source document is important […]
Chapter 2 Theory Base of Accounting
Chapter 2 Theory Base of Accounting Short Answer Type Questions Question 1. Why is it necessary for accountants to assume that business entity will remain a going concern? Answer : Going Concern Concept assumes that the business entity will continue its operation for an indefinite period of time. It is necessary to assume so, as it […]
Chapter 1 Introduction to Accounting
Chapter 1 Introduction to Accounting Short Answer Type Questions Question 1. Define accounting. Answer: Accounting is a process of identifying the events of financial nature, recording them in Journal, classifying in their respective ledgers, summarising them in Profit and Loss Account and Balance Sheet and communicating the results to the users of such information, viz. owner/s, […]