SNAP TEST 01 Financial Accounting (BBL203) BBALLB II Sem School Of Law, IUU, Dehradun

Name: Roll No: Date:

All questions are compulsory. Each question carries 0.25 marks.

Max. Marks: 3

1. Borrowing cash from the bank causes assets to increase and liabilities to increase. (T/F) 2. The process of transferring the debit and credit information from the journal to individual accounts in the general ledger is called.. 3. A debit may signify a(n): (a) Increase in asset accounts (b) Increase in liability accounts (c) increase in the capital account (d) Decrease in expense accounts 4. The basic sequence in the accounting process can best be described as: a. Transaction, journal entry, source document, ledger account, trial balance. b. Source document, transaction, ledger account, journal entry, trial balance. c. Transaction, source document, journal entry, trial balance, ledger account. d. Transaction, source document, journal entry, ledger account, trial balance. 5. Which of the following statements is associated with the accrual basis of accounting? a. The timing of cash receipts and disbursements is emphasized. b. A minimum amount of record keeping is required. c. This method is used less frequently by businesses than the cash method of accounting. d. Revenues are recognized in the period they are earned, regardless of the time period the cash is received. 6. Trial balance is prepared to check accuracy of a. Ledger accounts balances b. Balance sheet balances c. Income statement balances d. Cash flow statement balances 7. Which of the following account with normal balance is shown at the debit side of a trial balance? a. Rent income account b. Creditors account c. Unearned income account d. Cash account 8. Which of the following is not a nominal account? a. Machinery b. Sales c. Insurance d. Capital 9. The returns inwards day book would contain: a. Goods purchased on credit that are returned to the original supplier b. Non-current assets purchased that are unsuitable for business use c. Stock that customer have returned d. Goods purchased on credit 10. We sell goods to H Clews on 5 April 20X6 for 1,200. The credit terms are for a 5 % cash discount if payment is received within 14 days. If payment is received on 15 April then the correct double-entry to record the discount would be: Debit Credit a. H Clews 60 Discounts received 60 b. Discounts allowed 60 H Clews 60 c. H Clews 60 Discounts allowed 60 d. Discounts received 60 H Clews 60 11. A debit will cause the balance in a liability account to a. Decrease b. Increase c. Write off d. Accumulated 12. The following balances refer to T. Singhs Assets and Liabilities Machinery $20000 Cash in hand $2000 Land and buildings $200000 Bank loan $50000 Creditors $5000 Debtors $10000 What is T. Singhs capital? a. $55000 b. $177000 c. $232000 d. $287000