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Definition of Accounting

The Air condi...

Question

The Air conditioner of a company was not working properly. An electrician was called to check the same. He was paid a sum of Rs 500 for his visit. The transaction was identified by the accountant & the same was communicated to the Finance Head that there has been an expenditure of Rs 500 on repairs & maintenance. The accountant feels that he has completed his job properly. Is he correct? If no, which step of the process of accounting has he missed out?

Yes, he is correct. The accountant of the company did not record the transaction which is the most important step of accounting

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No, he has missed recording the transaction

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No, he has missed identifying the transaction

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No, he has missed communicating the transaction

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Solution

The correct option is B
No, he has missed recording the transaction

the transaction must be recorded

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Similar questions

Following transactions have occurred. Find the total expenditure to be carried to Repair expenditure.

`- Rs 500 paid for installation of machinery was debited to wages account

`- Rs 5000 paid for extension of building was debited to repairs account

`- Rs 2000 paid for repair of an existing machine was debited to machinery account

Mr. A is the accountant of a company ABC ltd. Goods worth Rs 20,000 have been purchased of which goods worth Rs 2,000 are found to be obsolete & were sent back, but the same was not communicated to the accountant by the store manager of the company separately. rather he put a note at the back of the goods receipt slip. The accountant of the company recorded the value of goods at Rs 20,000 in the books of accounts. Which step of accounting process has gone wrong in the above situation?

(a) Give necessary Journal entries to rectify the following errors:

(i) Rent received : 1,000 was wrongly entered as commission received : 1,000 in the Cash Book.

(ii) 2,500 paid for rent, has been wrongly debited to Interest Account.

(iii) An amount of 8,000 received on account of interest, was credited wrongly to Commission Account.

(iv) 35,000 paid for the purchase of a motor cycle to proprietor has been charged to Miscellaneous Expenses Account.

(v) Contractor's Bill of 27,500 for expansion of building was wrongly debited to Repairs Account.

(vi) 5,000 paid in installment to an injured worker for compensation. The worker's compensation claim was debited to Wages Account.

(b) Goods worth : 10,000 returned by Keshwari were taken into stock but the transaction was not recorded by Mr. Shaad (accountant) in the books of accounts as he was doing some of his personal work and left the company after office hours, not caring for the transaction to be entered in the books of accounts.

(i) Identify the value missing in the above case.

(ii) Rectify the error.

Write the following transactions in Cash Book with Discount and Bank Columns:

Jan. 1 Opening balance of cash : 2,00,000.

Jan. 3 He pays : 1,80,000 into Bank's Current A/c.

Jan. 4 He receives cheque of =6,000 from Kirti & Co., on account.

Jan. 7 He pays into Bank Kirti & Co's cheque for : 6,000.

Jan. 10 He pays Ratan & Co., by cheque : 3,300 and is allowed discount : 200.

Jan. 12 Tripathi & Co., pay into his Bank AIc: 4,750.

Jan. 15 He receives cheque for : 4,500 from Warsi and allows him discount : 350.

Jan. 20 He receives cash : 750 and cheque : 1,000 for Cash Sales.

Jan. 25 He pays into Bank : 10,000.

Jan. 27 He pays John & Co. : 3,750 in cash and is allowed discount : 350.

Jan. 30 He pays sundry expenses in cash : 500.

Jan. 31 He pays office rent by cheque : 2,000.

Jan. 31 He pays staff salaries by cheque : 3,000.

Jan. 31 He draws a cheque for personal use : 2,500.

Jan. 31 He pays Jagpal by cheque for commission : 3,000.

Q. Anil opened a savings account in a bank on 12.11.2008. His first deposit to his account was Rs. 800 on that day. His second deposit to his account was Rs. 1200 on 9.12.2008. Find the sum on which he would receive interest at the end of December 2008.

There was an old computer which was written-off in the books of accounts in the previous year. The same has been taken over by a partner Nitin for Rs. 3,000. Journalise the transaction, supposing. That the firm has been dissolved.

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The correct option is B No, he has missed recording the transaction the transaction must be recorded

The correct option is B
No, he has missed recording the transaction

the transaction must be recorded