Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 29)
1
What document is used to summarise all the transactions with a supplier during a period?
Answer
(C)
Statement of Account
2
Which accounts are found on the balance sheet?
Answer
A
B
C
3
What type of account is “Inventory”?
Answer
(A)
Asset
4
Which of the following are parts of a journal entry?
Answer
A
B
C
5
What type of account is 'Bad Debt Expense'?
Answer
(D)
An expense account.
6
Which of the following methods is most consistent with the matching principle?
Answer
(B)
Allowance Method
7
Which of these actions would result in a credit entry in the cash column?
Answer
(C)
Paying wages in cash.
8
What kind of errors can a trial balance typically detect?
Answer
B
C
9
Which accounting equation represents a sale of goods for cash?
Answer
(C)
Assets increase; owner's equity increases.
10
What document is typically used as the source for recording a purchase of goods on credit in the purchases journal?
Answer
(C)
A supplier's invoice
11
What are the two main components shown in the income statement?
Answer
A
D
12
Which of the following is the purpose of a bank reconciliation?
Answer
(C)
To find the discrepancies between the bank statement and cash book.
13
In a cash book, what does a debit entry in the bank column indicate?
Answer
(B)
An increase in the bank balance.
14
Why is it important to prepare a trial balance before creating the financial statements?
Answer
(B)
To see if the financial records are accurate.
15
In a petty cash system, what is the purpose of analysis columns?
Answer
(B)
To summarize and categorize petty cash expenses.
16
What does the term 'creditor' mean in accounting?
Answer
(B)
Someone who has a claim on the assets of a business.
17
What is the main purpose of a general ledger?
Answer
(C)
To summarize and categorize all financial transactions.
18
What is a credit entry used for?
Answer
(D)
To increase equity.
19
Which of the following journals are part of the books of prime entry?
Answer
A
B
C
20
Which of the following is a common use for a standing order?
Answer
(C)
To pay a monthly rent or insurance premium.
21
What is the effect on the inventory when goods are purchased on credit?
Answer
(A)
Increases
22
Which of the following will have to be recorded in the income statement?
Answer
A
B
23
Which accounts are involved when a business pays for utilities?
Answer
A
B
24
Which account is credited in the general journal when a credit sale is initially recorded?
Answer
(B)
Sales Revenue
25
What is the impact on the income statement when a provision for doubtful debts is increased?
Answer
(A)
An increase in expenses and a decrease in profit.
26
Which of the following transaction types would typically be recorded in the bank column of the cash book?
Answer
A
D
27
Which of the following is used to prepare the Income Statement?
Answer
(C)
The Trial Balance.
28
What are the key financial statement implications when accounting for accrued income?
Answer
A
C
D
29
When a business purchases supplies on account, what accounts are affected?
Answer
(B)
Supplies and accounts payable.
30
What impact do sales returns have on a business's net income?
Answer
B
C
31
In accounting, what is the definition of 'assets'?
Answer
(C)
Resources controlled by a company as a result of past events.
32
Which of the following is a characteristic of a direct debit?
Answer
(B)
It's authorized by the payer.
33
A business offers a 10% trade discount on all sales. A customer purchases goods with a list price of $1,000. What will be the amount of the sale recorded in the sales journal?
Answer
(B)
$900
34
What is the purpose of the statement of retained earnings?
Answer
(D)
To show the changes in retained earnings over a period.
35
If a company records unearned revenue, what is the corresponding journal entry?
Answer
(A)
Debit Cash, Credit Unearned Revenue
36
What would be the entry for the purchase of an asset on credit?
Answer
(B)
Debit Asset, Credit Accounts Payable
37
Which of the following is the primary purpose of a sales returns journal?
Answer
(C)
To record credit sales returns
38
If a company expects that a portion of their accounts receivable will not be collected, how should this be reflected in the financial statements?
Answer
(B)
Decrease the value of assets.
39
Which accounts normally have a credit balance?
Answer
(C)
Liabilities
40
What is the effect on the accounting equation when a business pays off a portion of its accounts payable?
Answer
(C)
Assets decrease, liabilities decrease.
41
Which of the following describes the effect of the adjusting entry to record accrued salaries expense?
Answer
(C)
Increases expenses and liabilities.
42
Which of the following correctly describes the effect of a cash purchase on the basic accounting equation (Assets = Liabilities + Equity)?
Answer
B
D
43
Which type of activity is an asset that is purchased with the intention of being sold?
Answer
(B)
Current Asset
44
Which items are found on the debit side?
Answer
A
B
45
What is the normal balance for the 'Accounts Payable' account?
Answer
(B)
Credit
46
What does the term 'liquidity' refer to in accounting?
Answer
(B)
The ability of a company to convert assets into cash quickly.
47
What is the main purpose of using a cash book?
Answer
(C)
To track all cash transactions.
48
Which of the following is an example of an accrued expense?
Answer
(B)
Utilities bill received but not yet paid.
49
How does a Sales Returns Journal help manage a business's financial data?
