Bookkeeping Test Answers
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As at the balance date, prepaid expenses will
be represented in the financial statements as ....?
a debit balance current asset
a credit balance current asset
a credit balance expense
a debit balance non-current asset
a credit balance non-current asset
A petty cash expenditure would be recorded and
debited to which account?
the petty cash float account
accounts payable
a fixed asset account
an expense account
accounts receivable
End-of-period adjustments do NOT include which
transactions?
Depreciation
Deferred Revenue
Cash sales
Deferred Expense
Accrued expenses
The accounting equation is ....?
Liabilities = Assets + Owners Equity
Assets = Liabilities - Owners equity
Assets + Liabilities = Owners equity
Assets = Liabilities + Owners equity
Owners Equity = Liabilities - Assets
Taking the information from the journals and
recording it in the ledgers, is known in bookkeeping as ....?
posting
crediting
journalizing
reconciling
transferring
When an owner invests more money into the
business, which of the following bookkeeping entries is correct ?
Debit Cash account, Credit Owners equity
Credit Cash account, Debit Owners equity
Debit Cash account, Debit Owners equity
Credit Owners equity, Credit Cash account
Recording revenues as they are earned and
expenses as they are incurred, regardless of when the money is exchanged, is
known as ....?
Cash accounting
Single entry accounting
Accrual accounting
Cost accounting
Which of the following is NOT a correct
description of the 'Debit and Credit' concept in bookkeeping?
it is a classification and recording process that
keeps the accounting equation in balance
'Debit' is always good for the business and
'Credit' is always bad for the business.
it is a method for recording the changing values in
the financial accounts of a business caused by monetary transactions
it is a method for classifying financial
transactions
it records the flow of economic resources from a
source to a destination
What accounting concept is being applied when
personal transaction must be separated from business transaction?
Objectivity Principle
Cost Principle
Going concern concept
Business entity concept
Accrual method
What is the typical balance of a liability
account reported in the Balance Sheet?
credit balance
debit balance
Which of the following account groups does NOT
appear on the Balance sheet of the business?
Owners equity
Current Assets
Current Liabilities
Expenses
Fixed Assets
Which amounts appear on left side of
T-account?
debit
credit
Which principle/guideline requires the
company's financial statements to have footnotes containing information that is
important to users of the financial statements?
Matching Principle
Conservatism
Going Concern
Full disclosure
Materiality
What is a listing of account numbers with
account titles but without amounts called?
Balance Sheet
Chart of Accounts
Ledgers
Income Statement
Trial Balance
Which of the following items would be
accounted for as an expense?
Payment of the current period's rent
The purchase of land
Dividends to stockholders
Repayment of a bank loan
Invoices from vendors (suppliers) which are
due in 30 days should be credited to Accounts _______.
Payable
Balance Sheet
Cash Flow
Credit
Receivable
Under which classification would 'Merchandise
Inventory' be recorded?
Inventments
Non-current asset
Fixed asset
Intangible asset
Current asset
There are two accounting methods for recording
financial transactions, the cash method and the:
accrual method
payable method
adjustment method
receivable method
prepaid method
True or False? An accrual occurs before a
payment or receipt. A deferral occurs after a payment or receipt.
False
True
"Amounts owed by the business and
expected to be paid out within one year" is the description of which
account group?
Non-current liabilities
Debtors
Current liabilities
Expenses
Current assets
Which of the following general ledger accounts
would NOT generally have a subsidiary ledger?
Inventory
Accounts payable
Fixed assets
Goodwill
Accounts receivable
Assets that will be converted to cash within
one year will be reported under what category in the Balance Sheet?
Current Liabilities
Long term Liabilities
Capital
Current Assets
Fixed Assets
Under what section is the Accounts Receivable
account reported in the Balance Sheet?
Liabilities
Equity
Current assets
Non current liabilities
Non current assets
A _______ entry is entered on the left side of
an account.
debit
increased
decreased
credit
list
Income that has been earned within a financial
period but has not yet been received in cash, is known as ...?
accrued expenses
accrued revenue
revenue in advance
accounts payable
extraordinary income
Which of the following does NOT form part of
the bank reconciliation process?
Outstanding deposits
Direct deposits from customers
Outstanding checks
Bank charges
Aged debtors
Loan funds owed to a bank would belong to
which account group?
Revenue
Liabilities
Equity
Assets
Expenses
Which of the following transactions is
primarily identified in the bank reconciliation process?
cash sales
sales commission fees
accounting fees
advertising expenses
bank charges
Net profit is always greater than Gross
Profit.
False
True
Which of the following is a capital
expenditure?
Payment for services rendered
Purchase of equipment
Salaries paid
Purchase of stationery
Purchase of merchandise
If Assets totaled $55,000 and Liabilities
totaled $25,000, Equity would be ....?
impossible to calculate
$30,000
$25,000
$55,000
$80,000
That part of the equity that the owner invests
in the business is known as ...?
Capital
Loans
Current earnings
Retained earnings
Drawings
True or False: Recording a business
transaction always requires at least a debit to one account and a credit to a
different account.
False
True
For every financial transaction entered in the
bookkeeping system, the total of the debits must equal the total of the
credits?
True
False
The golden rule of accounting says that, for
every debit entry, there must be...
a corresponding credit entry
a cash sale entry
a credit sale entry
an asset purchase
What three sections make up the Balance Sheet?
revenue, liabilities and equity
assets, liabilities and equity
assets, liabilities and revenue
revenue, expenses and equity
income, liabilities and equity
An adjustment being made for an error relating
to transactions posted to the wrong expense account would be recorded in which
journal?
cash payments
cash receipts
general
sales
purchases
When an owner contributes additional money to
a business, the equity ....?
Decreases
Increases
Is unaffected
Which term in accounting means that every
transaction affects two or more accounts?
double entry
multiple entry
single entry
triple entry
What is money owed by a business to its
suppliers shown as a liability on a company's balance sheet?
Unearned Revenue
Accounts payable
Retained Earnings
Inventory
Accounts Receivable
Interest paid by a business on a bank loan is
...?
an expense
revenue
owner's drawings
an asset
a liability
Inventories encompass all of the following,
except:
Merchandise purchased by a retailer
Finished goods produced
Land and other property not held for sale
Materials and supplies awaiting use in the
production process
Which of the following would be reported in
the financial statements as a current asset?
Accounts receivable
Office furniture
Shares held in other companies
Plant and equipment
Patents
An invoice being paid that relates to
insurance cover for the next accounting period should be reported in the
financial statements for this accounting period as .....?
Revenue in advance
accrued expense
accrued revenue
Insurance expense in the current accounting period
a prepaid expense
An accounts payable ledger records which
transactions?
Cash payments
Cash sales
Cash purchases
Sales made on credit
Purchases made on credit
If a company has $50,000 in Total Assets
(including $10,000 in Current Assets + $40,000 in Fixed Assets) and $20,000 in
Equity, what is their Total Liability?
$10,000
$0
$30,000
$40,000
$20,000
Which account group does 'Accounts Receivable'
belong to?
Assets
Liabilities
Equity
Expenses
Revenue
'Prepaid expenses' are classified and reported
in the financial statements under which account group?
Expenses
Assets
Owners equity
Revenue
Liabilities
The calculation for gross profit is, Sales
less ...?
Opening stock
Expenses
Cost of goods sold
Closing stock
Purchases
Which of the following transactions would have
NO impact on stockholders' equity?
Dividends paid to stockholders
Net loss in the current period
Purchase of land from the proceeds of a bank loan
Investment of cash by stockholders
"A statement of assets and liabilities
that is reconciled with the equity of the owner at the close of an accounting
period" is a definition of which financial report?
Balance sheet
Bank reconciliation
Cashflow statement
Equity statement
Income statement
An accounting principle that record asset such
as land at original cost and ignoring increases in value is the:
Historical Cost Rule
Consistency Rule
Conservative Rule
Materiality Rule
Which of the following is more an accountant's
role than a bookkeeper's role?
classifing transactions into the correct ledger
accounts
ensuring a balanced 'trial balance'
ensuring that financial transactions are recorded
correctly
reporting to governments and meeting statutory
requirements
recording the organisation’s day-to-day financial
transaction
Which account group does 'Drawings' belong to?
Owners equity
Expenses
Assets
Liabilities
Revenue
On which part of a Balance Sheet do Prepaid
Expenses appear?
Prepaid Expenses do not appear on the Balance Sheet
Assets
Shareholders' Equity
Liabilities
On December 15, XYZ Co. hired Jane Houston as
a contractor to begin working on January 3 at a monthly salary of $5,000. ABC's
balance sheet of December 31 will show a liability of...
4000
1000
3000
5000
No liability
Which type of balances do Expense and Asset
accounts typically have?
debit
credit
nil
negative
When a business uses cash to purchase
inventory, which of the following bookkeeping entries is the correct one?
Credit - Inventory account, Debit - Cash account
Debit - Inventory account, Credit - Cash account
Debit - Inventory account, Debit - Cash account
Credit - Cash account, Credit - Inventory account
The accounting practice where general
treatment of items does not differ from period to period, is known as ...?
Reliability
Relevance
Accruals
Consistency
Substance over form
Which of the following would NOT be considered
a “The Bottom Line” result in financial reporting?
Net profit
Earnings
Net Income
Sales
Cost of Good Sold is calculated by adding
purchases to the beginning inventory and then subtracting ...?
Accounts Payable balance owed to inventory vendors
Ending Inventory
Gross profit
Any Accounts Payable discounts taken
Selling expenses
All of the debt a company owes, such as bonds,
loans and unpaid bills is called
Assets
Equity
Balance Sheet
Liabilities
Which of the following is NOT a method of
inventory valuation?
ISO
Weighted average
LCM - Lower of cost or market
LIFO
FIFO
A company disposes of equipment that it no
longer uses in its business. The amount received by the company is more than
the amount the asset is carried at in the accounting records. The company will
report a...
Loss
None of these
Revenue
Gain
Profit
Which specific expense group is deducted from
revenue to calculate gross profit?
Overhead expenses
Finance & Funding expenses
Cost of sales
Selling & Administration expenses
Depreciation & Amortization expenses
In which journal do bookkeepers generally add
memos or notes for individual transactions?
Cash receipts
Purchases
General
Cash payments
Sales
When a check received for a sale is returned
by the bank, the two accounts to be adjusted are cash and ...?
Bank Charges
Discount on Sales
Accounts payable
Accounts receivable
Purchases
Which is not a current asset?
Petty Cash
Accounts Receivable
Prepaid Insurance
Furniture
Which of the following documents would you NOT
rely on to originate accounting entries?
Cash register receipts
Delivery dockets
Sales invoices
Adjustment/credit notes
Electronic transfers
Net Sales minus the Cost of Goods Sold equals
...?
Net profit
Operating profit
Earnings After Tax
EBIT
Gross profit
To credit an expense account means to decrease
it.
False
True
Which of the following is NOT a liability of
the business?
Interest Payable
Accounts Payable
Accounts Receivable
Unearned revenue
Customer Advances
Transactions that include revenue that has
been earned but not yet collected OR expenses that have been incurred but not
yet evidenced or paid, are known as...
Prepaid expenses
Credit Purchases
Accruals
Cash payments and receipts
Unearned revenues
Which of the following is NOT generally used
as an alternative name for 'Owners Equity'?
Net Worth
Shareholder's equity
Investments and loans
Capital
The current period's profit will be reported
in which section of the Balance Sheet?
Equity
Current liabilities
Non-current assets
Non-current liabilities
Current assets
Which statement correctly completes the
sentence? If Cost of Goods Sold increases, ........
net profit increases
closing stock decreases
sales revenue decreases
gross profit decreases
gross profit increases
The owner of a small business writes himself a
check for 5,000 for personal use. How is this check recorded in the journal?
debit Bank Loan, credit Drawings
credit Drawings, debit Cash at bank account
credit Accounts Receivable, debit Drawings
credit Cash at bank account, debit Drawings
The owner of a small business writes himself a
check for 5,000 for personal use. How is this check recorded in the journal?
debit Bank Loan, credit Drawings
credit Drawings, debit Cash at bank account
credit Accounts Receivable, debit Drawings
credit Cash at bank account, debit Drawings
Working capital is calculated by the formula
...?
Current asset - Current liabilities
Current assets - Inventory
Current assets + Current earnings
Equity - Total liabilities
Total assets - Current liabilities
In what type of journal would adjustments be
generally recorded?
General Ledger
Sales Journal
Cash Receipts Journal
Purchase Journal
General Journal
The books of original entry are known as the
......?
Journals
Source documents
Bank deposit books
Financial statements
Ledgers
What is the next step in the bookkeeping
process after you have recorded the financial transaction details in the
appropriate journal?
Calculate and record the end of period adjusting
entries
Prepare a trial balance
Prepare financial statements
Analyse and classify the financial transactions
Post the details to the general ledger
In the double-entry bookkeeping system,
financial transactions are first recorded in the:
trial balance
spiral notebook
journals
general ledger
subsidiary ledger
When an asset is sold for cash, into which
journal is the transaction recorded?
Purchases journal
Cash receipts journal
Sales returns journal
Sales journal
Cash payments journal
Which of the following transactions increases
the balance of the Creditors control account in the general ledger?
Discount revenue
Cash received
Discount allowed
Purchases on credit
When an invoice for a service covers more than
one accounting period, the journal entry will show an Expense and a:
Non-current asset entry
Liability
Cash Entry
Prepaid Expense
Under which account group is 'Accumulated
depreciation' reported in the financial statements?
Assets
Revenue
Liabilities
Expenses
Owners Equity
A business with available cash to use will
have a ......?
Debit closing balance on the Bank Statement
Credit balance in its Cash at Bank account
Debit balance in its Cash At Bank account
When applying the accrual basis of accounting,
how would you report expenses that covered a future period?
As an expense in the current period
As a liability in the current period
As an asset - prepaid expenses
As drawings against equity in a future period
If a supplier's invoice is recorded on the
last day of the year for future services, one side of the entry should be
accounts payable, and the other entry should be to which account?
Owners equity
Prepaid Expense
Cash at bank
Equity
Services expense
The accounting convention that requires the
assets of a business to be reported in the financial statement at the actual
price that was paid to acquire them, is known as .....?
Materiality
Historical cost
Monetary measurement
Going Concern
Realization of income
Which one of the following is a Contra-Asset
account?
Marketable Securities
Bank Charges
Accumulated Depreciation
Accrued Revenue
Which of the following statements describes
the accounting equation?
Assets = Liabilities + Equity/Capital
Assets = Equity/Capital - Liabilities
Assets = Liabilities = Equity/Capital
Assets + Liabilities = Equity/Capital
Assets = Liabilities - Equity/Capital
The deposit book issued by the bank is used to
evidence the banking of .....?
Bank fees charged to the account
Checks issued for payment to suppliers
Electronic banking - payments out
Monies received
The account set up as an advance or float for
petty cash is treated as ... ?
an equity account
a liability account
an expense account
an asset account
a revenue account
Which of the following is NOT a contra
account?
Sales returns
Sales allowances
Sales discounts
Bank charges
Accumulated depreciation
Which of the following is NOT found on an
income statement?
Depreciation expense
Bad debts
Purchases
Postage and shipping
Cash at bank
Cash sales are recorded in which subsidiary
journal?
Purchases journal
Cash payments journal
Cash receipts journal
Sales journal
Sales returns and allowances journal
Which principle/guideline requires a company's
balance sheet to report its land at the amount the company paid to acquire the
land, even if the land could be sold today at a significantly higher amount?
Monetary Unit
All of the above
Cost Principle
Business
Economic entity
The original book of entry for financial
transactions in the bookkeeping system is the .....?
Journal
General Ledger
Subsidiary Ledger
Cash at Bank account
If a financial transaction increased an asset
you would credit the asset account in the bookkeeping system?
False
True
The ability of a firm to pay its current
maturing obligations on time is known as ...?
Sustainability
Profitability
Solvency
Saleability
Maturity
What are the two main accounting methods used
for record-keeping?
debit & accrual basis
credit and debit basis
cash and accrual basis
prepaid and accrual basis
debit and cash basis
Which of the following statement about the
perpetual inventory system is TRUE?
it provides a partial record of stock turnover
it provides a continuous record of stock turnover
it does not record stock movements
it eliminates the need to carry out stocktakes
it is cheaper to operate than the physical
inventory system
The process of writing off the value of
intangible assets to acknowledge their loss of value is known as:
Accruals
Amortization
Asset appreciation
Posting
Depreciation
Which account is NOT part of the profit and
loss account?
Advertising
Doubtful debts
Repairs and Maintenance
Insurance
Accumulated depreciation
What does the term "2% 10, Net 30"
mean?
The buyer must pay 2% in 10 days of the bill date
with the balance of the bill being due in 30 days.
The total bill is due in 30 days, but a discount of
2% may be taken if the bill is paid in 10 days of the bill date.
If the bill is not paid in 10 days an extra 2% is
payable in 30 days.
The total bill is due in 30 days but the buyer must
pay 2% within the first 10 days of the bill date.
A 2% discount on the bill can be taken if payment
is made after 10 days but before 30 days.
A credit balance in the bank statement would
be normally reconciled with:
a debit balance in the Bank Fees and Charges
account
a debit balance in the Accounts Receivable account
a credit balance in the Cash at Bank account
a debit balance in the Cash at Bank account
a nil balance in the Cash at Bank account
The broad accounting principle that requires
expenses to be reported in the same period as the revenues that were earned as
a result of the expenses is known as ...?
Full disclouser
Revenue recognition principle
Going concern
Conservatism
Matching principle
A Debit balance is usually not normal for
which account?
Retained Earnings
Wages Payable
Accumulated Depreciation
All of these
When recording financial transactions using
the "T" account method, the 'Debit' value is recorded on the right
and the 'Credit' value is recorded on the left.
True
False
If Assets totaled $40,000 and Owners Equity is
40% of the total Assets, what is the value of the Liabilities?
$16,000
$14,400
$24,000
$14,000
$23,400
Which principle/guideline minimizes the detail
of reporting based on the insignificant size of the amount?
Conservatism
Full discloser
Materiality
Historical cost
In a company's accounts, the shareholder's
fund is equal to ...?
Current assets - Current liabilities
Total assets + Current earnings
Working capital + Fixed assets
Working capital - Fixed liabilities
Total assets - Total liabilities
Treasury stock is classified under which
account group?
expense
liabilities
assets
equity
revenue
Which of the following accounts is NOT a
current liability?
Accounts payable
Revenue in advance
Bank overdraft
Accrued expenses
Term Loans secured by a mortgage
If you are valuing inventory by the FIFO
method, the inventory on hand, according to the books of the business, will be
the ...?
Depend on whether costs are rising or falling
Average of beginning and ending inventory
Oldest
Newest received
In regards to time, which of the following
headings would you NOT find on an income statement?
As at the 30 June
For the period 1 January to 30 June
For the month ended 30 June
For the month of June
For the 6 months ended 30 June
A cash receipts journal is a special journal
used to record all cash disbursement.
False
True
XYZ Co. has current assets of $50,000 and
total assets of $150,000. XYZ has current liabilities of $30,000 and total
liabilities of $80,000. What is the amount of XYZ's owner's equity?
$70,000
$120,000
$60,000
$90,000
$80,000
Which of the following balance-day entries do
not need reversing entries at the start of the new period?
revenue in advance
bad and doubtful debts
prepaid expenses
accrued revenue
accrued expenses
A chart of accounts is an index of the
accounts contained in the ... ?
General Ledger
General Journal
Customer list
Trial Balance
Vendors listing
Which of the following is a current liability?
Prepaid expenses
Accrued revenue
Accrued expenses
Drawings
Mortgage loan
TUV Co. performed services for Client Asim and
billed them in December. TUV follows the accrual basis of accounting. In
January TUV received the $5,000 from Asim and debited the Cash account: What
account should it credit?
Service Revenue
Unearned Revenue
Accrued expenses
Account receivable
Account Payable
A bank service charge on the bank statement
will require a _____________ to the general ledger account 'Cash at Bank' of
the business.
debit entry
No entry
credit entry
Is it acceptable in accounting that some of
the expenses reported on the income statement are estimates?
Yes
No
Which of the following statements in relation
to materiality is true? I. Materiality of item depends on their individual or
collective influence on the economic decisions of users. II.Materiality of an
item depends on its absolute size and nature
I only
II only
Neither I or II
Both I and II
Accounting for inventory by applying the lower
of cost or net realizable value is an example of the application of:
Materiality
Consistency
Comparability
Conservatism
The accounting principle that is the primary
support for the accrual method of bookkeeping is the .....?
'Substance Over Form' principle
Historical cost principle
'Full Disclosure' principle
Matching principle
'Going concern' principle
Only legal entities can be accounting entities
under accounting conventions. True or False?
False
True
In the Accounts Receivable ledger, a Debit
entry is most likely for:
Recording an uncollected sale
Recording a cash receipt from a sale
Recording a future obligation towards a vendor
Canceling an open Receivable
If the asset side of the accounting equation
represents the 'things of value in the business', what does the other side
represent?
items of economic value
the revenue the business has achieved
the source of finance to the business
the profit the business has made
the costs of running the business
The trial balance lists which type of
accounts?
Debtor and Creditor accounts only
Only the 'real' accounts
General ledger accounts plus the individual Debtor
and Creditor accounts
Only the General ledger accounts
Only the 'nominal' accounts
Which of the following accounting principles
supports the need to ensure that recorded information is based on fact and not
just on personal opinion?
Monetary measurement
Materiality
Objectivity
Going Concern
Consistency
The chronological record of a transaction’s
process through the accounting system, from the source document to the financial
statements, is known as ....?
Posting
a trial balance
Variance reporting
An audit trail
Journalizing
Which of the following is NOT generally used
as an alternative name for a 'Balance sheet'?
Statement of Net Assets
Equity Statement
Statement of Financial condition
Statement of Financial Position
Which source document would be used when
inventories are returned to a supplier?
Check
Memoranda
Purchase invoice
Sales invoice
Adjustment note
In a reconciliation process, if the
discrepancy amount when divided by 9 results in a whole integer, then it is
...?
an error of reversal
an error of commission
an error of omission
a transposition error
a compensating error
In times of rising costs for inventory, the
Cost of Goods Sold will be highest under which inventory valuation method?
Average Cost
Standard Pricing
FIFO
Weighted Average Cost
LIFO
What does a debit balance on a bank statement
indicate?
the bank account has available funds
the bank account is overdrawn
it must be a mistake
the bank owes you money
When trading stock is received from a
supplier, the source document for bookkeeping purposes will be the ...?
Consignment note
Supplier's invoice
Delivery docket
Purchase order
Purchase requisition
A check that was received from a debtor was
dishonored. How does this transaction affect the debtors control account in the
general ledger?
it is debited
it is credited
it remains unchanged
it is ignored
Which account would NOT form part of the
Trading Account?
Purchases
Closing inventory
Freight inwards
Sales
Sales commissions
Under what account group heading would
'Provision for Doubtful Debts' be reported in the financial statements?
Current assets
Non-current liabilities
Expenses
Current liabilities
Equity
Which of the following is NOT generally listed
as one of the key expense group classifications of an income statement?
Depreciation and amortization
Other operating expenses
Finance expenses
Accrued expenses
Selling and administration expenses
Which of the following is NOT a feature of a
perpetual inventory system?
gross profit calculations cannot be done without a
physical stocktake
typically includes maximum and minimum stock levels
stock losses can be determined
typically includes a re-order point
separate inventory records are kept for each stock
item
The directive to recognize revenue only when
it is reasonably certain of happening and to recognize expenses as soon as they
are incurred is known by which principle?
Separate accounting entity
Dual Aspect of financial transactions
Matching principle
Prudence/Conservatism
Historical cost
The purchase of motor vehicles on credit
should be entered into which journal?
Cash receipts
Cash payments
General
Sales
Purchases
'Nominal accounts' in bookkeeping are also
known as 'Temporary accounts'.
False
True
Interest Expense on a term loan for a large
retailer is a ....?
a Non operating expense
an Extraordinary expense
a Depreciation and Amortization
an Operating expense
a Direct expense
Which of the following inventory costing
methods is appropriate for a business with a relatively small number of unique
inventory items with a high unit cost?
FIFO
Weighted average
LIFO
Moving average
Specific identification
Unexpired costs are represented in the
accounts of an accounting entity as...
equity
expenses
revenue
assets
liabilities
If a 4 year old asset (equipment) was sold on
credit for the book value of $5,000, the total value of assets in the firm's
accounting equation is ....?
Decreased by $1,000
Decreased by $5,000
Increased by $5,000
Increased by $4,000
Unchanged
On December 1 a company borrowed $100,000 at
12% per year. The interest will be paid quarterly, with the first payment due
on March 1. What interest expense amount should the company report on its
income statement for the month of December?
$4,000
$0
$12,000
$1,200
$1,000
Under the IFRS, the value of land is recorded
at ________ on the balance sheet.
Fair Value
Market value
Depreciated value
Liquidation value
Cost price
Which of the following transactions are
recorded in the purchases journal?
Assets bought on credit
Expenses recorded but not yet paid for
Trading stock bought on credit
Loan repayments payable
Trading stock purchased for cash
When using the moving average method of
inventory valuation, a new unit cost must be computed after each:
Issuance from inventory
Month-end
Purchase and issuance from inventory
Purchase
Assuming a "T account" setup in the
general ledger, on which side of the subsidiary account must an entry in the
control account be posted?
on the opposite side
always on the credit side
on the same side
always on the debit side
Which of the following is NOT considered a
function of accounting?
a means for calculating the current market value of
a business
a means of communication to stakeholders
a management control device
a means of establishing accountability
an aid to decision making
The 'Discount allowed' account records the
....?
Discount given by suppliers
Discount given to creditors
Discount on purchases
Discount on sales
Discount given to debtors
Which account is NOT part of the trading
account?
Freight outward
Import clearance charges
Purchases
Duty and excise
Freight inward
Investments securities held for the purpose of
retiring bonds payable shall be classified as:
Intangible assets
Current assets
Investments
Deferred bond liability
When using the FIFO inventory costing method,
the most recent costs are assigned to the cost of goods sold. True or False?
False
True
Which of the following is NOT generally used
as an alternative name for an 'Income Statement'?
Statement of operations
Profit and Loss Statement
Net Profit Statement
Statement of Financial Performance
Earnings statement
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