Question

Q.4 Match the following :-
1. Good will
2. Life insurance premium
3. Bank account
4. Contra entry
5. Trade discount
(i) drawing a/c
(ii) intangible assets
(iii) cash book with cash & bank column
(iv) personal a/c
(v) not recorded in books.​

Answer 1

Answer:

1 b

2 c

3 d .

4 B

5 A

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Answer 2

ANSWER :

1. Good will ➜ (ii) Intangible Assets

• ✎ Goodwill is the reputation of a firm to hold its customers and to attract more. Goodwill is considered as an asset. But it is an intangible assets.

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2. Life insurance premium ➜ (i) Drawing A/C

• ✎ Life insurance premium is paid for the owner or proprietor of the business. Therefore, it is a personal or private use of Cash. Hence, it is recorded in Drawing A/C

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3. Bank Account ➜ (iv) Personal A/C

• ✎ According to Traditional Approach or English Approach, Bank Account comes under Personal A/C. It is an account of artificial person.

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4. Contra Entry ➜ (iii) Cash book with cash & bank column

• ✎ Contra Entry is the transactions that affects both the cash account and bank account. It appears in the cash book with cash & bank column. The amount of a contra entry is recorded at the same time on both the Debit Side and Credit side of the cash book.

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5. Trade Discount ➜ (v) not recorded in books

• ✎ Trade discount is a reduction allowed on the list price by the wholeseller or distributor in order to enable the retailer to sell the goods to customers at the list price and still to have a margin for him to cover his expenses and to earn profit. It is not recorded in the books of accounts as trade discount is allowed on the list price and sales is done on the basis of net price of the goods.