Chapter Exam

Chapter 4: Recording of Transactions – II — Online MCQ Test

Q: Which of the following is a subsidiary book used for recording credit purchases?

Answer: B. Purchases Book — The Purchases Book is specifically designed to record all credit purchases of goods on account from suppliers.

Q: The Sales Book is used to record:

Answer: B. Only credit sales of goods — The Sales Book records only credit sales of goods; cash sales are recorded in the Cash Book.

Q: Which book is used to record returns of goods purchased on credit?

Answer: A. Purchases Return Book — The Purchases Return Book (or Debit Note Book) is used specifically for recording returns of goods that were originally purchased on credit.

Q: Trade discount is a reduction given on:

Answer: A. The list price of goods at the time of sale — Trade discount is an allowance given on the list price of goods and is not recorded in the accounting books.

Q: Cash discount is allowed to encourage:

Answer: B. Quick payment of dues — Cash discount is a reduction in the amount due that is offered to encourage prompt or early payment of outstanding amounts.

Q: A business purchased goods worth ₹10,000 after a trade discount of 20%. The amount to be recorded in the Purchases Book is:

Answer: B. ₹8,000 — Trade discount of 20% on ₹10,000 = ₹2,000. Therefore, the amount to be recorded = ₹10,000 - ₹2,000 = ₹8,000.

Q: If goods costing ₹5,000 were purchased on credit and a cash discount of 5% was allowed on early payment, the entry in the Purchases Book would show:

Answer: A. ₹5,000 — The Purchases Book records the full invoice amount (₹5,000). Cash discount is not recorded in the Purchases Book but is accounted for when payment is made.

Q: A business gives a trade discount of 30% on all goods. If the list price is ₹5,000 and the business also offers a 10% cash discount on early payment, the journal entry for credit purchase would show the purchase value as:

Answer: B. ₹3,500 — Only trade discount (30%) affects the recorded value: ₹5,000 - ₹1,500 = ₹3,500. Cash discount is applied later during payment, not at purchase recording.

ACCOUNTANCY · Grade 11 · CBSE(NCERT)

Practice Chapter 4: Recording of Transactions – II with a free chapter-wise online MCQ test for CBSE(NCERT) Grade 11 ACCOUNTANCY. This chapter covers: Subsidiary books, Purchases Book, Sales Book, Purchases Return Book, Sales Return Book, Journal Proper, Trade discount, Cash discount. AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 4: Recording of Transactions – II — Important Questions & Answers (FAQ)

Frequently asked questions from CBSE(NCERT) Grade 11 ACCOUNTANCY — Chapter 4: Recording of Transactions – II, with answers and explanations. These are sample questions; the exam has its own separate question set.

Which of the following is a subsidiary book used for recording credit purchases?

A. Sales Book
B. Purchases Book ✓
C. Cash Book
D. Journal Proper

Answer: B. Purchases Book
The Purchases Book is specifically designed to record all credit purchases of goods on account from suppliers.

The Sales Book is used to record:

A. All sales transactions including cash and credit
B. Only credit sales of goods ✓
C. Only cash sales of goods
D. Sales of fixed assets

Answer: B. Only credit sales of goods
The Sales Book records only credit sales of goods; cash sales are recorded in the Cash Book.

Which book is used to record returns of goods purchased on credit?

A. Purchases Return Book ✓
B. Sales Return Book
C. Journal Proper
D. Purchases Book

Answer: A. Purchases Return Book
The Purchases Return Book (or Debit Note Book) is used specifically for recording returns of goods that were originally purchased on credit.

Trade discount is a reduction given on:

A. The list price of goods at the time of sale ✓
B. The payment of outstanding dues
C. The total amount after cash discount
D. The selling price to retailers

Answer: A. The list price of goods at the time of sale
Trade discount is an allowance given on the list price of goods and is not recorded in the accounting books.

Cash discount is allowed to encourage:

A. Bulk purchases
B. Quick payment of dues ✓
C. Long-term credit
D. Return of goods

Answer: B. Quick payment of dues
Cash discount is a reduction in the amount due that is offered to encourage prompt or early payment of outstanding amounts.

Which transactions are recorded in the Journal Proper?

A. All transactions of the business
B. Only transactions that cannot be recorded in other subsidiary books ✓
C. Only credit purchases and sales
D. Only cash transactions

Answer: B. Only transactions that cannot be recorded in other subsidiary books
The Journal Proper is used for recording transactions that do not fit into the standard subsidiary books like purchases, sales, or cash books.

A business purchased goods worth ₹10,000 after a trade discount of 20%. The amount to be recorded in the Purchases Book is:

A. ₹10,000
B. ₹8,000 ✓
C. ₹2,000
D. ₹12,000

Answer: B. ₹8,000
Trade discount of 20% on ₹10,000 = ₹2,000. Therefore, the amount to be recorded = ₹10,000 - ₹2,000 = ₹8,000.

If goods costing ₹5,000 were purchased on credit and a cash discount of 5% was allowed on early payment, the entry in the Purchases Book would show:

A. ₹5,000 ✓
B. ₹4,750
C. ₹5,250
D. ₹250

Answer: A. ₹5,000
The Purchases Book records the full invoice amount (₹5,000). Cash discount is not recorded in the Purchases Book but is accounted for when payment is made.

In the context of subsidiary books, which of the following statements is INCORRECT?

A. The Sales Book records credit sales only
B. The Purchases Return Book records goods returned to suppliers
C. The Journal Proper records all routine trading transactions ✓
D. The Sales Return Book records goods returned by customers

Answer: C. The Journal Proper records all routine trading transactions
The Journal Proper records non-routine and transactions that cannot be recorded in other subsidiary books, not routine trading transactions.

A business gives a trade discount of 30% on all goods. If the list price is ₹5,000 and the business also offers a 10% cash discount on early payment, the journal entry for credit purchase would show the purchase value as:

A. ₹5,000
B. ₹3,500 ✓
C. ₹3,150
D. ₹4,500

Answer: B. ₹3,500
Only trade discount (30%) affects the recorded value: ₹5,000 - ₹1,500 = ₹3,500. Cash discount is applied later during payment, not at purchase recording.

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