FAR A Test 1

Manan, a bank lending officer, is studying the financial statements of Vault, a proprietorship selling dry fruits. She notes in her review that rent expense includes rent for the proprietor’s home.

• True

• False

The following entries have been passed by a student. You have to state whether these entries are correctly passed. If not so, pass the correct journal entries.

Freight account Rs. 1000

           To cash account       Rs. 1000

(being freight paid)

Manan, a bank lending officer, is studying the financial statements of Vault, a proprietorship selling dry fruits. She notes in her review that rent expense includes rent for the proprietor’s home.

Justify the statement using the Accounting Principle.

1.       The amount of salary paid to Suresh should be debited to:

• the account of Suresh

• Salaries account

• Cash account

Sales made to Reetha for cash should be debited to:

• Cash account

• Reetha account

• Sales account

Who is primarily responsible for the maintenance of accounting records?. i.Chief executive officer, ii. Chief financial officer, iii. Controller, iv. Treasurer.

• Chief executive officer

• Chief financial officer

• Controller

• Treasurer

  On June 3, 2024, Apman and Tenru started Crescendo Limited, a concert-booking service as equal shareholders with a total share capital of Rs. 100,000. Each of them contributed Rs. 40,000 and agreed to contribute the balance when called. On August 12, 2024, the company had Rs. 150,000 in cash and Rs. 180,000 in unpaid bills. On that date, Apman had personal cash of Rs. 90,000 and owed Rs. 50,000 on a personal bank loan. Tenru had personal cash of Rs. 30,000 and owed Rs. 22,000 on a personal bank loan. i. Are Apman and Tenru solvent or insolvent?

Classify the following accounts as Real, Personal or Nominal:

1. 1. Cash Account

2. 2. Salary Account

3. 3. Bank overdraft

4. 4. Capital account

5. 5. Sales account

6. 6. Sundry creditors