Question

Q.2 Write true/false: -
1. Debtors are liabilities of the business.
2. Credit the receiver.
3. Cash account is a real account.
4. Purchase book records all purchase.
5. Ledger is a book of original record.​

Answer 1

1.false

2.false

3.true

4.true

5.false

Answer 2

ANSWER :

1. False.

• ✎ Debtors represent those persons or firms to whom goods have been sold or services have been rendered on credit and payment has not been received from them. Therefore, debtors are assets of the business; whereas, creditors are the liabilities of the business. Hence, this statement is False.

• ❒ Correct Statement : Debtors are assets of the business. Or, Creditors are the liabilities of the business.

___________________________________________________

2. False.

• ✎ The rules of Debit and Credit under Traditional Approach or English Approach states that Debit the receiver of the benefit and Credit the giver of the benefits. Hence, this statement is False.

• ❒ Correct Statement : Credit the giver. Or, Debit the receiver.

___________________________________________________

3. True.

• ✎ Real Accounts are the accounts that records the transactions related to tangible things which can be seen, touched or phyśically exchanged as well as some intangible items which presence can be felt and can be bought or sold. According to Traditional Approach or English Approach, Cash account is a Real Account. Hence, this statement is True.

___________________________________________________

4. False.

• ✎ Purchases book, also known as Purchases journal or Purchases day book records all the credit purchase of goods which are bought by the business for re sale. It does not records the cash purchases of such goods. Hence, this statement is False.

• ❒ Correct Statement : Purchases book records the credit purchases of goods that are meant for resale. Or, Purchases book does not record all purchases.

___________________________________________________

5. False.

• ✎ Ledger is a book of final entry. It is a book of account which contains a condensed and classified record of all transactions of the business posted from the journal. Journal is known as book of original entry. Hence, this statement is False.

• ❒ Correct Statement : Ledger is a book of final entry. Or, Journal is a book of original record.