Question

Following are the balances of assets and liabilities as at 01. 01. 2019. of a business.
Assets Rs. Liabilities Rs.
Land 1 500 000 Bank loan 1 200 000
Furniture 500 000 Creditors 1 750 000
Debtors 350 000
Cash 150 000

(1) What is the value of current assets as at 01. 01. 2019 of the business?
(i) Rs. 100 000
(ii) Rs. 300 000
(iii) Rs. 500 000
(iv) Rs. 700 000

(2) Select the correct double entry relevant to receiving a cheque of Rs. 30 000 for the cash sales.
(i) Cash book Dr Rs. 30 000
Sales a/c Cr Rs. 30 000

(ii) Bank a/c Dr Rs. 30 000
Sales a/c Cr Rs. 30 000

(iii) Sales a/c Dr Rs. 30 000
Cash book Cr Rs. 30 000

(iv) Sales a/c Dr Rs. 30 000
Bank a/c Cr Rs. 30 000

(3) The amount receivable from a customer is Rs. 15 000. His debt amount was settled by receiving
a cheque of Rs. 12 000. The correct double entry for this transaction is;
(i) Cash book Dr Rs. 12 000
Discount allowed a/c Dr Rs. 3 000
Vishal a/c Cr Rs. 15 000

(ii) Cash book Dr Rs. 12 000
Vishal Cr Rs. 12 000

(iii) Cash book Dr Rs. 15 000
Vishal Cr Rs. 15 000

(iv) Vishal a/c Dr Rs. 12 000
Cash book Cr Rs. 12 000

Answer 1

Answer:

Q1 answer is (iii) Rs 500,000

Q3 answer is (i) Cash book Dr Rs. 12 000

Discount allowed a/c Dr Rs. 3 000

Vishal a/c Cr Rs. 15 000

Explanation:

Q1 answer is 500000 coz current assets are those assets which should be converted into cash within 1 year...so cash + debtors amount = 500000

Q3 answer (i) coz customer has to give 15000 but the customer gave 12000 and settled his debt so 3000 is out loss and loss are always debited so ...,

Cash book Dr Rs. 12 000

Discount allowed a/c Dr Rs. 3 000

Vishal a/c Cr Rs.