Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 7)
1
A provision should be included in the accounts to cover the possibility that some debts may become irrecoverable and may not be collected in the ____.
Answer
(C)
Next accounting year
2
What is the main purpose of the general ledger?
Answer
(B)
b) Summarizing the effects of transactions on each account
3
What does the general journal record?
Answer
(B)
b) Irregular transactions
4
Which financial statement shows a company's assets, liabilities, and equity at a specific point in time?
Answer
(C)
c) Balance Sheet
5
What is the term for the process of recording business transactions?
Answer
(B)
Book-keeping
6
Which of the following is NOT a typical use of a general journal?
Answer
(B)
b) Recording the sale of goods for cash.
7
What are the key roles of the business' accounting functions?
Answer
A
B
D
8
Which of the following best describes the impact of a recovered irrecoverable debt on the financial statements?
Answer
A
C
D
9
Which is a permanent ledger account?
Answer
(D)
Capital
10
In the context of cash discounts, a discount allowed to a customer is a(n)...
Answer
(C)
expense
11
What types of accounts are transferred to the income statement at the end of the accounting year?
Answer
A
B
C
12
What increases with a debit entry?
Answer
A
C
13
Which of the following is an advantage of using a 3-column cash book?
Answer
(D)
It can record cash discounts.
14
A business purchases supplies for $500 on account. Which of the following is the correct journal entry?
Answer
(C)
Debit Supplies $500; Credit Accounts Payable $500
15
What is the impact of accrued expenses on the financial statements?
Answer
(C)
Increase liabilities and decrease equity.
16
How does increasing the provision for doubtful debts affect the income statement?
Answer
(B)
Decreases income and profit for the year.
17
Which of the following is an example of a non-current asset?
Answer
(D)
Equipment
18
What are the advantages of using prime entry journals?
Answer
(A)
They make record keeping easier and help organize transactions.
19
Which of the following statements are true regarding balancing off accounts?
Answer
A
B
D
20
What accounts are involved when cash is received for cash sales?
Answer
(A)
Cash and Sales
21
If a business makes a cash payment, where should the related transaction be recorded?
Answer
(B)
The credit side of the cash book.
22
How do trade discounts affect the amount of revenue recognized?
Answer
(C)
They decrease the amount of revenue recognized.
23
What type of account is 'Sales Revenue'?
Answer
(D)
Revenue
24
What are the main purposes of a bank current account?
Answer
(D)
d) A bank current account is used to record the transactions of the organization and is useful to pay and be paid.
25
The loan interest charges on the bank are recorded in:
Answer
(D)
Interest Expense
26
Which of these transactions should always be debited?
Answer
(D)
Purchases
27
If a company pays for supplies, which accounts are affected?
Answer
(A)
Cash and Supplies
28
Which of the following accounts will appear on a post-closing trial balance?
Answer
(C)
Retained Earnings
29
If a business pays for an expense in cash, what is the impact?
Answer
(A)
Debit: Expense account; Credit: Cash account
30
In a trial balance, total debits must equal total credits.
Answer
(A)
True
31
13. Which of the following entries are correct?
Answer
B
C
32
What is the purpose of double-entry bookkeeping?
Answer
(B)
To record every transaction twice, once as a debit and once as a credit.
33
If a business owner takes cash out of the business for personal use, which accounts are affected?
Answer
(B)
Drawings and Cash
34
Which of these would most likely result in the use of a sales returns journal?
Answer
(C)
A customer returns faulty goods.
35
What is the purpose of recognizing accrued revenue?
Answer
A
B
D
36
In the context of the accounting equation, what happens when a company acquires an asset on credit?
Answer
A
B
37
Which of the following accounts is increased by a debit entry?
Answer
(A)
Cash
38
Which of the following is a characteristic of a source document?
Answer
(C)
It provides the initial information for recording a transaction.
39
In the sales return journal, the amount of goods held by the business is increased when they are returned in their original supplies, because they were unsold in the first place. Which ledger is used to record this?
Answer
(D)
All of the above
40
Which of the following is an example of an accrued expense?
Answer
(C)
Salaries
41
What is the purpose of posting from the general journal to the general ledger?
Answer
(B)
b) To summarize transactions by account.
42
Which of the following entries would increase both assets and equity?
Answer
(A)
To recognize the income earned but not yet received by the end of the accounting year.
43
What information is included in a sales journal?
Answer
A
B
C
44
Which of these are types of ledgers?
Answer
A
B
D
45
What is the impact on the financial statements when a business makes a reduction to the provision for doubtful debts?
Answer
(C)
Increases profit.
46
What are the accounting consequences of writing off an irrecoverable debt?
Answer
A
B
47
What is the purpose of a statement of account?
Answer
(B)
To summarize transactions.
48
How does the imprest system work? (select the best answer)
Answer
(A)
a) The petty cash is set at a fixed amount and only the money spent is replaced at the end of the period.
49
What are the basic sub-divisions of the ledger and what type of accounts do each of the sub-divisions contain?
Answer
(D)
Real accounts, nominal accounts, capital accounts
50
Which of the following are considered as books of prime entry?
