Which book of original entry is used for recording the purchase of assets on credit? MCQ with Answer and Explanation

Question
Which book of original entry is used for recording the purchase of assets on credit?
A. Sales Book
B. Cash Book
C. Journal Proper
D. Purchases Book
Answer: Option C
Solution (By JKSSB Mock Tests)
The Purchases Book only records credit purchases of trading goods. Credit purchases of assets are recorded in the Journal Proper.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
Which of the following is NOT a component of the cost of production?
A. Office and administration overheads
B. Selling and distribution overheads
C. Direct materials
D. Factory overheads
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Correct Answer: Option B

Explanation:
Cost of production includes prime cost, factory overheads, and office/admin overheads. Selling and distribution overheads are added to arrive at the Cost of Sales, not Cost of Production.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
If rent paid is Rs 10,000 and prepaid rent at year-end is Rs 2,000, what is the rent expense for the current year under accrual accounting?
A. Rs 8,000
B. Rs 12,000
C. Rs 2,000
D. Rs 10,000
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Correct Answer: Option A

Explanation:
Current year expense = Paid amount - Prepaid for next year = 10,000 - 2,000 = Rs 8,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'External Commercial Borrowings' (ECB) policy is governed by:
A. RBI
B. Ministry of Finance
C. DGFT
D. SEBI
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Correct Answer: Option A

Explanation:
ECB policy and regulations are formulated by RBI in consultation with Government.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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