Journal Entries (No compound entries) MCQs Quiz | Class 9
This quiz is for Class IX students studying Elements of Book-Keeping & Accountancy (Code 254). It covers Unit 4: Journal, focusing on the topic of Journal Entries (No compound entries). You will be tested on recording transactions with one debit and one credit only. Answer all questions, submit the quiz to see your score, and download the PDF answer sheet for review.
Understanding Simple Journal Entries
In accounting, the Journal is the first book where financial transactions are recorded in chronological order. This process is called journalising. A simple journal entry is the most basic form of entry, involving only two accounts: one is debited, and the other is credited with an equal amount. This adheres to the fundamental principle of double-entry bookkeeping.
The Three Golden Rules of Accounting
To correctly record any transaction, you must first identify the accounts involved and then apply the “Golden Rules of Accounting” based on the type of account. All accounts are classified into three categories:
- Personal Accounts: Accounts related to individuals, firms, companies, or institutions. Examples: Ram’s A/c, Bank A/c, Capital A/c.
- Real Accounts: Accounts related to all assets or properties of the business that can be touched or measured in terms of money. Examples: Cash A/c, Furniture A/c, Building A/c.
- Nominal Accounts: Accounts related to all expenses, losses, incomes, and gains. Examples: Salary A/c, Rent A/c, Commission Received A/c, Sales A/c.
| Account Type | Debit Rule | Credit Rule |
|---|---|---|
| Personal | Debit the Receiver | Credit the Giver |
| Real | Debit what comes in | Credit what goes out |
| Nominal | Debit all Expenses & Losses | Credit all Incomes & Gains |
How to Record a Simple Journal Entry
Follow these steps to create a journal entry:
- Identify Accounts: Determine the two accounts affected by the transaction.
- Classify Accounts: Classify each account as Personal, Real, or Nominal.
- Apply Rules: Apply the relevant Golden Rule to determine which account to debit and which to credit.
Example Transaction: Paid Rent Rs. 5,000 in cash.
- Step 1 (Identify): The two accounts involved are ‘Rent Account’ and ‘Cash Account’.
- Step 2 (Classify): Rent is an expense, so it’s a Nominal Account. Cash is an asset, so it’s a Real Account.
- Step 3 (Apply Rules):
- For Rent (Nominal Account): The rule is “Debit all expenses and losses”. So, Rent Account is debited.
- For Cash (Real Account): The rule is “Credit what goes out”. So, Cash Account is credited.
- Resulting Entry: Rent Account is Debited and Cash Account is Credited.
Quick Revision Points
- The Journal is the book of prime or original entry.
- Every transaction affects at least two accounts. – For every debit, there must be a corresponding credit of an equal amount.
- A short description of the transaction, called a narration, is written below each journal entry.
- Mastering the three Golden Rules is essential for accurate journalising.
Extra Practice Questions
- What would be the journal entry for “Sold goods for cash Rs. 10,000”?
- Identify the two accounts involved in the transaction “Paid electricity bill Rs. 1,500”.
- What is the rule for a Nominal account when a business receives a commission?
- What is the journal entry for “Deposited cash into bank Rs. 20,000”?
- If a business buys a machine on credit from ABC Ltd., which account should be credited?
