Converting Single Entry to Double Entry involves preparing a 'Total Creditors Account' to find out: MCQ with Answer and Explanation

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Converting Single Entry to Double Entry involves preparing a 'Total Creditors Account' to find out:

A. Credit Purchases

B. Credit Sales

C. Cash Purchases

D. Closing Capital

Answer: Option A

Solution (By JKSSB Mock Tests)

Total Creditors Account reconstructs the relationship with suppliers; the balancing figure usually represents the missing credit purchases.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

A Suspense Account is generally closed when:

A. The financial year ends

B. The balance sheet is signed

C. The auditor approves it

D. All errors causing the trial balance difference are rectified

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Correct Answer: Option D

Explanation:
The Suspense Account exists only as a temporary fix. Once all one-sided errors are found and rectified, its balance becomes zero.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

A 'Funds Flow Statement' shows:

A. Changes in working capital

B. Cash inflows and outflows

C. Changes in financial position between two periods

D. Profit for the year

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Correct Answer: Option C

Explanation:
Funds flow statement explains the change in financial position (working capital) between two balance sheets.

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Question #3

Budgetary control system involves:

A. Setting long-term objectives

B. Fixing selling price

C. Comparing actual figures with budgeted figures

D. Only preparing cash budget

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Correct Answer: Option C

Explanation:
Budgetary control is the establishment of budgets relating to responsibilities of executives to the requirements of a policy and the continuous comparison of actual with budgeted results.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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