Page 4 - HA

4. None of the above
4. A purchase of machine for cash should be debited to:
1. Cash account
2. Machine account
3. Purchase account
4. None of these
5. Which of the following is correct?
1. Liabilities = Assets + Capital
2. Assets = Liabilities – Capital
3. Capital = Assets – Liabilities
4. Capital = Assets + Liabilities.
6. Cash withdrawn by the Proprietor should be credited to:
1. Drawings account
2. Capital account
3. Profit and loss account
4. Cash account
7. Find the correct statement:
1. Credit a decrease in assets
2. Credit the increase in expenses
3. Debit the increase in revenue
4. Credit the increase in capital
8. The book in which all accounts are maintained is known as:
1. Cash Book
2. Journal
3. Purchases Book
4. Ledger
9. Recording of transaction in the Journal is called:
1. Casting
2. Posting
3. Journalising
4. Recording

Short Answers

1. State the three fundamental steps in the accounting process.
2. Why is the evidence provided by source documents important to
accounting?
3. Should a transaction be first recorded in a journal or ledger? Why?
.
4. Are debits or credits listed first in journal entries? Are debits or
credits indented?
5. Why are some accounting systems called double accounting systems?
6. Give a specimen of an account.
7. Why are the rules of debit and credit same for both liability and
capital?
8. What is the purpose of posting J.F numbers that are entered in the
journal at the time entries are posted to the accounts.
9. What entry (debit or credit) would you make to:
10. If a transaction has the effect of decreasing an asset, is the decrease
recorded as a debit or as a credit? If the transaction has the effect of
decreasing a liability, is the decrease recorded as a debit or as a credit?