Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 1)
1
Who provides the credit note?
Answer
(B)
The supplier.
2
Which item is recorded on an income statement?
Answer
(C)
Revenue
3
What can be included in the accounts receivable?
Answer
A
C
4
How does cash paid by the business impact the cash in hand?
Answer
(B)
Decreases
5
A credit for $3,352 ____.
Answer
(A)
To reduce three months of accrual rental income than the total of profit entries of the account. It reduces the credit balance to be transferred to the income statement from $1,600 of rent income earned. It is described as 'prepayment cut'.
6
What does it mean when the totals of the debit and credit columns in the trial balance are not equal?
Answer
(B)
b) There must be an error in the accounting records.
7
What type of expenses are accrued?
Answer
A
B
D
8
What type of account has a normal debit balance?
Answer
(C)
Expense
9
In a bank reconciliation statement, what is the purpose of adding outstanding deposits?
Answer
(A)
a) To increase the bank balance.
10
If a company increases its provision for doubtful debts, what would be the effect on its net income (assuming no other transactions)?
Answer
(B)
Net income would decrease.
11
What type of account is "unearned revenue"?
Answer
(B)
b) A liability account.
12
What type of bank account is typically used for regular business transactions?
Answer
(B)
Current account
13
What is the purpose of a provision for doubtful debts?
Answer
(A)
To estimate and record potential losses from uncollectible customer debts.
14
Which accounting principle supports the use of the general journal to correct errors?
Answer
(D)
d) Conservatism.
15
What would be the effect of a sales return on the company's assets?
Answer
(B)
Decrease
16
What type of document is issued when goods are returned to the supplier?
Answer
(C)
Credit note
17
How is a cash discount treated in the accounting records?
Answer
(B)
As an expense
18
Which information is usually recorded in the purchase returns journal?
Answer
A
B
C
19
Which party issues the credit note?
Answer
(B)
The supplier.
20
What is the normal balance of an asset account?
Answer
(B)
Debit
21
In which side of a cash book will an increase in the amount of cash received by the business be recorded?
Answer
(B)
Debit side
22
Which of the following increases the provision for doubtful debts?
Answer
(B)
A customer declares bankruptcy and cannot pay.
23
Which of the following describes the effect of a dividend paid to owners?
Answer
(B)
Decreases assets and decreases equity
24
What are the items shown in the bank column of the cash book?
Answer
B
C
D
25
Which of these would be included as a part of a company's accruals?
Answer
A
C
26
What should be included on a statement of account?
Answer
(D)
All of the above.
27
2. What does it mean when an invoice shows goods supplied on credit?
Answer
(B)
The seller is expecting to be paid later by the buyer.
28
When a business receives cash, the cash account is always ___________.
Answer
(A)
Debited
29
When is the general journal most often used?
Answer
(D)
d) For transactions that cannot be recorded in other journals
30
An insurer income has been earned ____.
Answer
(A)
by the end of the accounting year.
31
What is the meaning of a "sale commission accrued"?
Answer
(D)
Sales commission has been earned but not yet paid.
32
Which of the following represents a debit entry?
Answer
(B)
Value of goods coming in
33
A trial balance is a list of accounts and their balances in the ledger on a specific date.
Answer
(A)
True
34
What is a sales receipt?
Answer
(B)
A document given to the customer after a purchase.
35
What is a petty cash voucher used for?
Answer
(B)
b) To record all the details of a small amount of expenditure
36
Which of the following statements is TRUE regarding the recording of a business transaction using the double-entry system?
Answer
(C)
There will be at least two accounts affected.
37
Which account is debited when the owner takes goods for personal use?
Answer
(C)
Drawings
38
What should a business do after a customer pays the debt that was written off as an irrecoverable debt?
Answer
(C)
Re-instate trade receivables
39
What causes differences due to processing and other factors affecting payments and receipts?
Answer
(C)
Items that were recorded in the cash book but did not appear in the bank statement.
40
How are accounts listed in the general ledger?
Answer
(A)
a) Alphabetical Order.
41
What is 'accounts receivable'?
Answer
(A)
Money owed to the business by customers
42
Which of the following is an example of an asset?
Answer
(C)
Cash
43
Which type of accounts have normal credit balances?
Answer
(B)
Liabilities
44
What does 'credit' mean in accounting?
Answer
(D)
The right side of an account
45
If a business buys supplies on credit, what is the impact on the accounting equation?
Answer
(C)
Assets increase, liabilities increase.
46
What is the main purpose of trade discounts?
Answer
(A)
To reduce final sale prices and encourage customer loyalty and repeat sales.
47
Which of the following accounts are affected when a business receives a bank loan?
Answer
(B)
Bank and Loan Payable
48
What is the effect on the accounting equation when a business provides services and bills the customer?
Answer
(B)
Assets increase, owner's equity increases
49
Which is included in the sales commission account?
Answer
A
C
50
The purchases are goods bought from suppliers for the sole purpose of selling them on to customers
