Recording Interest on Capital & Drawings

Q.

Which of the following journal entry will be recorded, if goods are withdrawn by a proprietor for his personal use from business?

1. Drawings A/c Dr

   To Capital A/c

2. Drawings A/c Dr

   To Bank A/c

3. Drawings A/c Dr

   To Cash A/c

4. Drawings A/c Dr

   To Purchase A/c

Q. The amount which the owner withdraw from the business for personal use is known as .

1. capital
2. interest
3. drawings
4. donation

Q.

Suppose A withdraw Rs 10, 000 in cash from business for personal use. Which account shall be credited in this case?

1. A`s capital account

2. Drawings account

3. Cash account

4. Profit & loss account

Q.

Which of the following account will be credited, when the interest on drawings is charged?

1. Interest on drawings account

2. Asset account

3. Partner's / Proprietor's capital account

4. Profit & loss account

Q.

Give the opposite of: Depositing money in bank.

Q.

What is the nature of Interest on drawings account?

1. Asset

2. Income

3. Liability

4. Expense

Q.

What is another name for purchases in accounting?

Q.

What is the nature of Interest on capital account?

1. Asset

2. Expense

3. Income

4. Liability

Q. Suppose Kushagr withdraw Rs.5, 000 in cash from the business for his personal use. In this case, account is credited.

1. Drawings
2. Kushagr
3. Cash
4. Capital

Q.

The amount which the owner withdraw from business for personal use is known as ______

1. Capital

2. Interest

3. Drawings

4. Donation

Q.

Withdrawals of cash from a bank by the proprietor for office use is termed as drawings. Is this statement correct?

1. True

2. False

3. Neither A nor B

4. A & B both

Q.

Which of the following account will be credited, when interest on capital is charged?

1. Interest on capital account

2. Asset account

3. Profit & loss account

4. Proprietor`s capital account

Q.

Which function will return the monthly payment of a loan?

Q.

At the year-end, the interest on drawings ____ the capital balance & the interest on capital ______ the capital balance.

1. Increases & Decreases

2. Decreases & Decreases

3. Decreases & Increases

4. Increases & Increases

Q. X, a retailer, has not maintained proepr books of accont but it has been possible to obtain the follwoing details:

Particulars		Last Year (₹)	This Year (₹)
Trade Creditors	................................................................................	6, 270	5, 890
Loan from Naresh	................................................................................	5, 000	5, 000
Stock	................................................................................	12, 350	11, 980
Cash in Hand	................................................................................	570	650
Shop Fittings	................................................................................	7, 250	7, 800
Trade Debtors	................................................................................	5, 280	4, 560
Bank Balance	................................................................................	3, 990	4, 130

Calculate the net profit for this year and draft the Statement of Affairs at the end of the year after noting that:
(a) Shop Fittings are to be depreciated by ₹ 780.
(b) X has drawn ₹ 100 per week for his own use.
(c) Included in the Trade Debtors is an irrecoverable balance of ₹ 270.
(d) Interest at 5% p.a. is due on the loan from Naresh but has not been paid for the year.

Q.

Explain the need for drawing up the special purpose books.

Q.

If A withdraw Rs 10, 000 from business for personal use, he has to pay an interest because if this money remains in business it will pay the owner some profit. This interest is known as _______

1. Interest on capital

2. Opportunity cost interest

3. Interest on drawings

4. Bank interest

Q.

Suppose A withdraw Rs 10, 000 from business for personal use from the bank. Which account shall be credited in this case?

1. Cash account

2. Drawings account

3. A`s capital account

4. Bank account

Q.

Ananya withdrew Rs. 2, 000 per month for personal use, recording each transaction as a debit to her drawing account and a credit to her cash account. The journal entry closing the drawing account requires a credit to _______ account & debit to _______ account.

1. Drawings & Ananya`s capital respectively

2. Ananya`s capital & Drawings respectively

3. Drawings & Profit & loss a/c respectively

4. Ananya`s capital & profit & loss a/c respectively

Q. Interest on capital is a/an for the business entity.

1. asset
2. liability
3. income
4. expense

Q.

State the need for sub-division in a journal.

Q. Interest on drawings is a/an for the business entity.

1. income
2. expense
3. asset
4. liability

Q.

At the year-end, the total interest on capital is ______ to the profit & loss account?

1. Debited

2. Not transferred

3. Credited

4. None of the above

Q.

journal entry settled shyamsundar Bros. account by cheque rs. 800

Q.

At the year-end, the total interest on drawings is ____ in the profit & loss account?

1. Debited

2. Credited

3. Not transferred

4. None of the above

Q.

journal entry for investment in govt. bonds

and entry for interest received on thesew bonds