10 Bmp Accounting Processes Test Revision 2012

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| By Karen Swift

Karen Swift

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Quizzes Created: 10 | Total Attempts: 1,442

Questions: 36 | Attempts: 69 | Updated: Aug 1, 2023

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10 Bmp Accounting Processes Test Revision 2012 - Quiz

Questions and Answers

1.

What account type is plant?

Explanation
The account type for plant is an asset. Assets are resources owned by a company that have economic value and are expected to provide future benefits. Plants, such as machinery, equipment, or buildings, are considered assets because they are tangible items that can be used to generate revenue for the company.

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2.

What account type are motor vehicles?

Explanation
Motor vehicles are considered assets because they have a monetary value and can be owned or controlled by an individual or organization. As assets, motor vehicles are recorded on the balance sheet and are expected to provide future economic benefits. They can be used for business operations, transportation, or even sold to generate cash. Therefore, categorizing motor vehicles as assets is appropriate in accounting terms.

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3.

What account type is a loan from the Commonwealth Bank?

Explanation
A loan from the Commonwealth Bank is classified as a liability because it represents a financial obligation or debt that the bank owes to the borrower. As the bank is obligated to repay the borrowed amount, it is considered a liability on their balance sheet. Liabilities are typically obligations or debts that an entity owes to another party, and in this case, the loan represents the bank's liability to the borrower.

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4.

What account type are sales?

Explanation
Sales are considered as revenue because revenue refers to the total amount of money generated from the sales of goods or services. Sales represent the income earned by a company through its primary business activities, which involves selling products or services to customers. Therefore, revenue is the correct account type for sales as it accurately reflects the financial value generated by the sales transactions.

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5.

What account type is accounts receivable?

Explanation
Accounts receivable is classified as an asset because it represents the amount of money owed to a business by its customers or clients for goods or services that have been provided on credit. As an asset, it holds economic value and is expected to generate future cash inflows for the business. The accounts receivable balance is typically reported on the balance sheet as a current asset, as it is expected to be collected within one year.

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6.

What account type is accounts payable?

Explanation
Accounts payable is a liability account type because it represents the amount of money that a company owes to its creditors or suppliers for goods or services that have been received but not yet paid for. It is a short-term liability that is typically recorded on the balance sheet and is an important component of a company's working capital management.

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7.

What account type is wages?

Explanation
The correct answer is expenses because wages are considered an expense for a company. Wages are the payments made to employees in exchange for their work or services. They are recorded as an expense in the company's financial statements because they represent a cost incurred by the company to generate revenue. By categorizing wages as an expense, it allows the company to track and report the costs associated with employee compensation accurately.

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8.

What account type is the loan to J Nash?

Explanation
The loan to J Nash is classified as an asset. This is because a loan represents an amount of money that is owed to the lender, and it has future economic benefits for the lender. As an asset, the loan is recorded on the balance sheet and represents a valuable resource that the company possesses.

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9.

What account type is electricity?

Explanation
Electricity is considered an expense because it is a cost incurred by a business or individual in order to operate and use electricity. Expenses are typically categorized as costs that are necessary for the day-to-day operations of a business and are not directly related to generating revenue. In the case of electricity, it is an ongoing expense that needs to be paid regularly in order to maintain the necessary power supply.

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10.

What account type is inventory?

Explanation
Inventory is classified as an asset because it represents goods or products that a company holds for sale or use in its operations. It is considered an asset because it has economic value and can generate future benefits for the company. Inventory is typically recorded on the balance sheet as a current asset and is an important component of a company's overall financial position.

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11.

What account type is capital?

Explanation
Owner's equity is the correct answer because capital refers to the owner's investment in the business. It represents the net assets of the business after deducting liabilities. Owner's equity shows the ownership interest in the company and represents the residual interest in the assets of the business after deducting liabilities. It includes the initial investment by the owner, additional investments made, and any retained earnings or profits. Therefore, capital is classified as owner's equity in accounting.

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12.

What account type is commission revenue?

Explanation
Commission revenue is a type of revenue account. Revenue accounts are used to record the income earned by a company from its primary activities, such as the sale of goods or services. Commission revenue specifically refers to the income generated from commissions earned by a company for facilitating a sale or transaction on behalf of another party. This type of revenue is typically earned by businesses that operate on a commission-based model, such as real estate agencies or insurance brokers.

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13.

What account type is cash at bank?

Explanation
Cash at bank is classified as an asset because it represents the funds held by a company in its bank accounts. Assets are economic resources that are owned or controlled by an entity and have future economic value. Cash at bank is a valuable asset for a company as it can be used to meet its financial obligations, make investments, or fund its operations. Therefore, the correct answer is asset.

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14.

What account type is the bank overdraft?

Explanation
The bank overdraft is classified as a liability because it represents the amount of money that a customer owes to the bank when their account balance goes below zero. It is essentially a short-term loan provided by the bank to cover temporary cash flow shortages. As a liability, it is recorded on the balance sheet as an obligation or debt owed by the customer to the bank.

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15.

Is decreasing assets a debit or credit?

Explanation
Decreasing assets is recorded as a credit because assets have a normal debit balance. When an asset decreases, it means there is a decrease in the value or amount of the asset. To maintain the accounting equation (Assets = Liabilities + Equity), a credit entry is made to decrease the asset account. This credit entry reduces the overall value of the asset and reflects the decrease in the company's resources.

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16.

By nature are liabilities debit or credit?

Explanation
Liabilities are recorded on the credit side of the accounting equation. This is because liabilities represent the obligations or debts that a company owes to external parties. When a liability is incurred, it increases the company's overall obligations, which is reflected as a credit entry in the accounting records. Therefore, by nature, liabilities are considered as credit items in the accounting system.

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17.

Is an increase of owner's equity a debit or credit?

Explanation
An increase in owner's equity is recorded as a credit because owner's equity represents the owner's claim on the assets of the business. When the owner invests more money into the business or when the business generates profits, it increases the owner's equity. In accounting, credits are used to record increases in owner's equity, while debits are used to record decreases. Therefore, an increase in owner's equity is recorded as a credit.

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18.

Is an increasing expense a debit or credit?

Explanation
An increasing expense is recorded as a debit because expenses are recorded on the debit side of the accounting equation. Debits are used to increase expenses and decrease assets or liabilities. When an expense increases, it means that more money is being spent, resulting in a decrease in the company's assets or an increase in its liabilities. Therefore, to accurately reflect this transaction, the expense account is debited.

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19.

By nature is revenue a debit or credit?

Explanation
Revenue is recorded as a credit because it represents an increase in a company's equity or net worth. When revenue is generated, it increases the company's assets and equity, which are recorded as credits. This is in accordance with the fundamental accounting equation, which states that assets = liabilities + equity. Therefore, revenue is recorded as a credit to reflect the increase in equity.

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20.

Is a decreasing liability a debit or credit?

Explanation
A decreasing liability is recorded as a debit. In accounting, liabilities are typically recorded as credits because they represent amounts owed by a company. However, when a liability decreases, it is essentially a reduction in the amount owed, thus decreasing the credit balance. To reflect this decrease, a debit entry is made to offset the credit balance and accurately reflect the decrease in the liability.

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21.

Define accounts payable.
22.

Define assets.
23.

Define double entry.
24.

Define liability.
25.

Define owner's equity.
26.

Define revenue.
27.

Define transactions.
28.

Define ledger.
29.

Which of the following is the accounting equation?
- A.
  
  A= OE + L
- B.
  
  A = OE- L
- C.
  
  A = L - OE
Correct Answer
A. A= OE + L

Explanation
The accounting equation states that Assets (A) are equal to Owner's Equity (OE) plus Liabilities (L). This equation represents the fundamental relationship between a company's resources (assets), the claims on those resources by the owner (owner's equity), and the claims on those resources by outsiders (liabilities). Therefore, the correct answer is A= OE + L.

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30.

Does a value for furniture recorded in the debit column indicate an increase of decrease?

Correct Answer
increase

Explanation
A value for furniture recorded in the debit column indicates an increase because the debit column is used to record assets and expenses. Furniture is considered an asset, so when its value is recorded in the debit column, it means that the company has acquired more furniture, resulting in an increase in its overall value.

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31.

Does a value for accounts receivable in the credit column indicate an increase of decrease?

Correct Answer
decrease

Explanation
A value for accounts receivable in the credit column indicates a decrease because accounts receivable represents the amount of money owed to a company by its customers. When a customer pays their outstanding balance, it reduces the accounts receivable balance, resulting in a decrease. The credit column is typically used to record decreases in accounts receivable, so a value in this column indicates a decrease in the overall balance.

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32.

Does a value for sales recorded in the debit column indicate an increase of decrease?

Correct Answer
decrease

Explanation
A value recorded in the debit column indicates a decrease in sales. In accounting, the debit column is used to record decreases in assets or increases in liabilities. Since sales are considered as revenue or an asset, recording a value in the debit column suggests a decrease in sales. This means that the company's sales have decreased during the given period.

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33.

Does a value for electricity recorded in the credit column indicate an increase of decrease?

Correct Answer
decrease

Explanation
When a value for electricity is recorded in the credit column, it indicates a decrease. In accounting, the credit column is used to record decreases in assets, liabilities, and owner's equity. Since electricity is an expense, recording it in the credit column implies a decrease in the amount of electricity expense.

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34.

Does a value for mortgage recorded in the credit column indicate an increase of decrease?

Correct Answer
increase

Explanation
A value for mortgage recorded in the credit column indicates an increase because in accounting, a credit entry is used to record an increase in liabilities. Since a mortgage is a liability, recording it in the credit column signifies that the mortgage amount has increased.

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35.

Does a value for telephone recorded in the debit column indicate an increase of decrease?

Correct Answer
increase

Explanation
A value recorded in the debit column for telephone indicates an increase because debit entries are used to record expenses or assets that increase. Since telephone expenses are typically considered an expense, a value recorded in the debit column suggests that the expense has increased.

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10 Bmp Accounting Processes Test Revision 2012

What account type is plant?

What account type are motor vehicles?

What account type is a loan from the Commonwealth Bank?

What account type are sales?

What account type is accounts receivable?

What account type is accounts payable?

What account type is wages?

What account type is the loan to J Nash?

What account type is electricity?

What account type is inventory?

What account type is capital?

What account type is commission revenue?

What account type is cash at bank?

What account type is the bank overdraft?

Is decreasing assets a debit or credit?

By nature are liabilities debit or credit?

Is an increase of owner's equity a debit or credit?

Is an increasing expense a debit or credit?

By nature is revenue a debit or credit?

Is a decreasing liability a debit or credit?

Define accounts payable.

Define assets.

Define double entry.

Define liability.

Define owner's equity.

Define revenue.

Define transactions.

Define ledger.

Which of the following is the accounting equation?

Does a value for furniture recorded in the debit column indicate an increase of decrease?

Does a value for accounts receivable in the credit column indicate an increase of decrease?

Does a value for sales recorded in the debit column indicate an increase of decrease?

Does a value for electricity recorded in the credit column indicate an increase of decrease?

Does a value for mortgage recorded in the credit column indicate an increase of decrease?

Does a value for telephone recorded in the debit column indicate an increase of decrease?