When a person purchasing goods on credit he becomes a_________in the books of the seller?

Related Mcqs:

1. Credit memo or credit note No. is entered in which of the following journal?

   A. General journal
   B. Cash journal
   C. Purchase journal
   D. Sales return day book

2. The person to whom goods are sold on credit is called___________?

   A. Buyer
   B. Seller
   C. Debtor
   D. Creditor

3. Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of____________?

   A. Error of principle
   B. Error of commission
   C. Error of omission
   D. Error of duplication

4. Which of the following will be debited if a business purchases goods on credit?

   A. Cash
   B. Debtor
   C. Creditor
   D. Purchases

5. Find the cost of goods sold if goods are sold for 2,000 at 25% profit on cost?

   A. 1,600
   B. 1,500
   C. 1,000
   D. 1,800

   Updated by: Mohammad Ejaz

6. Budgeted sales for the next year is 5,00,000 units. Desired ending finished goods inventory is 1,50,000 units and equivalent units in ending W-I-P inventory is 60,000 units. The opening finished goods inventory for the next year is 80,000 units, with 50,000 equivalent units in beginning W-I-P inventory How many equivalent units should be produced?

   A. 5,80,000
   B. 5,50,000
   C. 5,00,000
   D. 5,75,000

7. If debit balances = credit balances, trial balance only shows or check the ____________ and it does not indicate that no errors were made during recording and posting.

   A. Arithmetic accuracy
   B. Errors of commission
   C. Omissions of economic events
   D. Understatements of balances

8. Credit purchase of plant and machinery is recorded in which of the following journals?

   A. General journal
   B. Cash journal
   C. Purchase journal
   D. Purchase return journal

9. If credit side of a bank account is greater than the debit side, it indicates which of the following?

   A. Bank overdraft
   B. Cash at bank
   C. Bank balance
   D. Current Asset

10. Credit balance as per Cash Book mean____________?

    A. Surplus cash
    B. Bank overdraft
    C. Terms deposits with bank
    D. None of these