State whether the following statements are True or False with reasons.

1) Narration is not required for each and every entry.
Ans. This statement is False.
Reason : Narration is nothing but brief explanation of entry/transaction, based on that one Can pass journal entry. Therefore, narration is required for each and every entry.

2) A journal voucher is must for all transactions recorded in the journal.
Ans. This statement is True.
Reason : Journal voucher is basic/original voucher on the basis of which the transactions should be journalised in journal book, so we can say that journal voucher is must for all transactions recorded in the journal.

3) Cash discount allowed should be debited to Discount A/c.
Ans. This statement is True.
Reason : Cash discount allowed is an expense for the business and every expense should be debited. Therefore cash discount allowed should be debited to Discount A/c.

4) Journal is a book of prime entry.
Ans. This statement is True.
Reason : For every financial transaction, initially entity is recorded in the book known as ‘Journal’. Therefore, we can say that journal is a book of prime entry.

5) Trade discount is recorded in the books of accounts.
Ans. This statement is False.
Reason :  Trade discount is a general discount, allowed on catalogue price or on price list price. For increasing the sale or to give sufficient margin to retailers, generally trade discount is allowed. Therefore, trade discount is not to be recorded in the books of accounts.

6) Goods lost by theft is debited to Goods A/c.
Ans. This statement is False.
Reason : As per Real A/c rule, debit what comes in and credit what goes out. Here, goods lost by theft means goods goes out. Therefore, goods lost by theft is to be credited to Goods A/c.

7) If rent is paid to landlord, Landlord’s He should be debited.
Ans. This statement is False.
Reason :  Rent paid is an expense and Rent paid A/c should be debited, not Landlord A/c be debited.

8) Book-keeping records monetary and non-monetary transactions.
Ans. This statement is False.
Reason :  In the books of accounts, only financial transactions are to be recorded. Means non-monetary transactions are not be recorded.

9) Drawings made by the proprietor increases his capital.
Ans. This statement is False.
Reason : Drawings means, anything withdrawn by proprietor in the form of cash, goods, assets or services from the business for personal use. And it decreases the capital of proprietor.

10) When GST is paid on purchase of goods, Input Tax No should be debited.
Ans. This statement is True.
Reason : When goods are purchased, any tax payable on it is an expense for the business. Therefore, we can say that when GST is paid. Input Tax No should be debited.