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

Related Mcqs:

1. Sundry debtors as per Trial Balance is 43,000 which includes 2,200 due from ‗H in respect of goods sent to him on approval basis, the cost price of which is 1,800. Rectification would involve:

   A. Adding 2,200 to closing stock
   B. Deducting 1,800 from closing stock and deducting 2,200 each from debtors and sales
   C. Adding 1,800 to closing stock and deducting 2,200 each from debtors and sales
   D. Deducting 1,800 from debtors

2. Sales on credit is recorded in which of the following journal?

   A. Purchase journal
   B. Sales journal
   C. Purchases return journal
   D. Sales return journal

3. 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

4. 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

5. Goods sold on the basis of ‘sales or return ‘ should:

   A. Be included in the stock
   B. Not be included in the stock
   C. Not be checked by auditor
   D. None of the above

6. The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as 1,340.56. The bank recorded the cheque at its correct amount of 3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is

   A. The Trial Balance will not agree
   B. The balance of creditors is understated
   C. The purchases are understated
   D. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book

7. 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

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

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

9. Credit note is the basis for recording a transaction in which of the following SPECIALIZED journals?

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

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

    A. Debtor
    B. Creditor
    C. Defaulter
    D. Offender