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Saturday, September 12, 2020

MCQ - Single Entry System | Multiple Choice Questions and Answers | PAPER 5 FINANCIAL ACCOUNTING | CMA MCQ


SINGLE ENTRY SYSTEM MULTIPLE CHOICE QUESTIONS AND ANSWERS (MCQ)

FOR CMA/CA/CS INTERMEDIATE EXAMS
State whether the following statements are true or false:
1. Single entry system is an incomplete and unscientific system of recording transactions. True
2. Under Single Entry system a Trial Balance can be drawn. False
3. In pure single entry system, only personal account of debtors and creditor’s accounts are recorded. True
4. In pure single entry, real and nominal accounts are also maintained.                   False
5. Cash book or cash account is opened only in case of simple single entry system.           True
6. In simple single entry, only personal accounts of debtor and creditors along with cash book is prepared.  True
7. Quasi single entry system is also known as partly single entry system.                                True

8. In quasi single entry system, other subsidiary books such as purchases book, sales books etc are not maintained.                False
9. In quasi single entry system, personal account + cash book + other subsidiary books are maintained.  True
10. Posting from cash book is made only to the personal account in case of single entry.                True
11. Single entry system of book-keeping cannot be applied in case of maintaining account of Joint Stock Company. True
12. Single entry system cannot be applied in case of maintaining account of sole trade and Partnership.                 False
13. Preparation of final accounts is difficult in case of single entry system.             True
14. Accounts maintained under single entry system are recognised by income tax authorities.    False
15. In order to ascertain profit under Statement of affairs/Net worth method, a Profit and Loss Account is prepared. False
16. Capital on any date can be ascertained by preparing a Statement of Affairs on that date.  True
17. Other things remaining same the excess of the closing capital over opening capital is a loss suffered during that period.                 False, profit
18. Statement of affairs is not accepted as an evidence in the court of laws.         True
19. Trading and profit & loss account is prepared in case of conversion method to find profit during the year. True
Points to be remembered while solving questions:
20. Cost of goods sold = O/S + Net purchases + Direct expenses (if any) – C/S.
21. Total debtors account = Credit sales.
22. Total creditors account = Credit purchases.
23. Bills Payable Account = Bills payable accepted during the year.
24. Bills receivable account = Bills receivable received during the year.
25. Interest on drawings is calculated for 6 months, if the date of withdrawals is not given.
26. Interest on capital is calculated on the opening capital for full year and on additional capital from the date of investment in current year upto the end of the accounting year.
27. In the opening capital is more than the adjusted closing capital, the resultant figure is net loss.
28. Single entry system is an incomplete double entry system. True

Fill in the blanks
1. Under Single Entry system, financial position can be ascertained by preparing a statement of affairs.
2. Credit purchases are ascertained by preparing a Total Creditors Account.
3. Bills receivable received during the year affect Total Debtors account and Bills Receivable Account.
4. Stock under single entry can be determined by preparing a memorandum Trading Account.
5. Only debtors and creditors accounts are maintained under Pure Single Entry.
6. Pure single entry is converted into double entry only in case of Prospective effect.
7. Cash in hand at the close of the year is ascertained by preparing a Receipts and Payments Account.
8. Capital at the beginning of the year can be ascertained by preparing an opening Statement of Affairs.
9. Profit under Single Entry System can be ascertained by Net worth / Statement of Affairs method.
10. Credit Sales under Single Entry system can be ascertained by preparing a Total Debtors account.
11. Bills Receivable received during the year can be ascertained by preparing a Bills Receivable Account.
12. Bills Payable accepted during the year can be ascertained by preparing a Bills Payable account
13. Single Entry is a system of book-keeping which lacks Any system.
14. Bills Receivable dishonoured is debited to Debtors account and credited to Bills Receivable.
15. Bills Payable dishonoured is debited to Bills Payable Account and credited to Creditors account.
16. Bills Receivable endorsed is debited Creditors account and credited to Bills Receivable  account.
17. Bad debts previously written off now recovered is not recorded in the debtors account.
18. Transfer from debtors account to creditor’s account is debited to Creditors account and credited to Debtors account.
19. Transfer from creditor’s account to debtor’s account is debited to Creditors account and credited to Debtors account.
Multiple Choice questions and answers
1. Single Entry System is an:
(a) Incomplete and Scientific
(b) Incomplete and unscientific  
(c) Complete and scientific.
2. In Single Entry System, it is possible to prepare:
(a) A Trial Balance 
(b) A Trading and Profit and Loss Account
(c) A Receipts and Payments Account.
3. Single Entry System is most suitable where:
(a) Cash transactions are not numerous 
(b) Credit transactions are numerous
(c) Where both cash and credit transactions are numerous.
4. In Single Entry System, profit is ascertained as follows:
(a) Opening Capital + Drawings + New Capital introduced – Closing Capital.
(b) Closing Capital + Drawings + New Capital introduced – Opening Capital.
(c)  Closing Capital + Drawings – New Capital introduced –Opening Capital.
5. Capital at the beginning of the year is ascertained by preparing:
(a) Cash Account; 
(b) Opening Statement of Affairs,  
(c) total Creditors Account.
6. In Single Entry only:
(a) Debtors and Creditors accounts are maintained;
(b) Assets accounts, Expenses and Revenue are maintained ; 
(c) All accounts are maintained.
7. Single entry system cannot be maintained by:
(a) Sole proprietorship business
(b)Partnership business
(c) Companies
(d) All of the above

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