When converting Single Entry to Double Entry, the Bills Receivable dishonored will be: MCQ with Answer and Explanation

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When converting Single Entry to Double Entry, the Bills Receivable dishonored will be:

A. Ignored

B. Debited to Total Debtors A/c

C. Debited to Cash A/c

D. Credited to Total Debtors A/c

Answer: Option B

Solution (By JKSSB Mock Tests)

Dishonor of a bill reinstates the debtor's liability, thus the Total Debtors Account is debited to increase the balance.

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

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Question #1

An auditor is considered a 'watchdog and not a bloodhound'. This implies:

A. The auditor must approach the work with reasonable care and skepticism, but not assuming everyone is dishonest

B. The auditor works only at night

C. The auditor investigates only cash transactions

D. The auditor must be aggressive in finding fraud

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Correct Answer: Option A

Explanation:
Coined in the Kingston Cotton Mill case, it means an auditor must exercise reasonable skill and care but isn't required to approach the audit with suspicion of fraud.

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

Question #2

The 'Hedge Accounting' under Ind AS 109:

A. Only for derivatives

B. Is prohibited

C. Only for foreign exchange

D. Aligns accounting with risk management activities, with three types: fair value, cash flow, net investment

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Correct Answer: Option D

Explanation:
Ind AS 109 provides hedge accounting models.

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Question #3

Which of the following statements best describes the 'Money Measurement Concept'?

A. All assets are recorded at market value.

B. Only profitable transactions are recorded.

C. Only cash transactions are recorded.

D. All transactions and events are recorded in terms of money.

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Correct Answer: Option D

Explanation:
The money measurement concept states that only those transactions which can be expressed in monetary terms are recorded in the books of accounts.

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

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