The closing entry for transferring purchases account is: MCQ with Answer and Explanation

Question
The closing entry for transferring purchases account is:
A. Purchases A/c Dr. To Trading A/c
B. Trading A/c Dr. To Purchases A/c
C. Capital A/c Dr. To Purchases A/c
D. Profit & Loss A/c Dr. To Purchases A/c
Answer: Option B
Solution (By JKSSB Mock Tests)
At year-end, purchases account balance is transferred to Trading Account by debiting Trading A/c and crediting Purchases A/c.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Accounting Cycle' begins with:
A. Preparation of financial statements
B. Identification and recording of transactions in journal
C. Preparation of trial balance
D. Posting to ledger
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Correct Answer: Option B

Explanation:
The cycle starts with journalizing (recording) transactions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Residential status under the Income Tax Act depends primarily on:
A. Citizenship of the individual
B. Location of assets owned
C. Physical presence (number of days) in India during the previous year
D. Place of birth
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Correct Answer: Option C

Explanation:
An individual's residential status for tax purposes is determined by their period of stay in India during the relevant financial year, irrespective of citizenship.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The process of transferring entries from journal to ledger is called:
A. Balancing
B. Recording
C. Journalizing
D. Posting
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Correct Answer: Option D

Explanation:
Posting is the process of transferring debit and credit amounts from journal to respective ledger accounts.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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