Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 49)
1
What is the primary purpose of the 'statement of cash flows'?
Answer(B)
To track the movement of cash into and out of the business.
2
What is the function of a credit note?
Answer(B)
To authorize a return of goods.
4
What is the impact on the accounting equation of declaring a dividend?
Answer(C)
Assets decrease, equity decreases.
5
Which of the following is a main purpose of a trial balance?
Answer(D)
To verify the mathematical equality of debits and credits.
6
When a business withdraws cash from the bank for office use, what is the effect on the cash book?
Answer(B)
The cash balance increases, the bank balance decreases.
7
Which of the following entries correctly reflects adjusting for prepaid insurance?
Answer(C)
Debit Insurance Expense, Credit Prepaid Insurance.
8
In the context of business transactions, what does the term "carriage" usually refer to?
Answer(A)
The delivery cost of goods
9
Which of the following is correct regarding a trial balance?
Answer(A)
It provides proof that the accounting equation is balanced.
10
What type of account is 'Depreciation expense'?
11
Which events will decrease a company's total assets?
12
Which financial statement summarizes the financial performance of a company over a period?
13
In a sales returns journal, what is the effect on the customer's balance in their account?
14
Which of the following accounts has a credit balance?
15
Which of the following accounts are most directly involved in recording sales returns?
16
What is the purpose of a trial balance?
Answer(B)
To check the accuracy of the ledger entries.
