Computerised Accounting Quiz: Test!

1. Which one of the following categories does the Rent account belong to?

Assets

Liabilities

Expenses

Purchases

Rent is an overhead for the business, hence in the expenses category.

Explanation

Rent is an overhead for the business, hence in the expenses category.

2. You are preparing a sales invoice and the goods totals come to £500.00, If the VAT rate is 17.5%, what is the VAT amount to be added to the invoice?

£87.50

£90.60

£82.60

£117.50

Working: 500 X 17.5 /100 = 87.50

Explanation

Working: 500 X 17.5 /100 = 87.50

3. You make a cash sale for £200 (No VAT). Which of the following pairs of nominal accounts are affected?

Rent Account and Bank Account

Cash Account and Sales Account

Sales Account and Trade Debtors Account

Purchases Account and Bank Account

You debit the cash account and credit the sales account.

Explanation

You debit the cash account and credit the sales account.

4. If your business is VAT registered, which one of the following is correct?

You do not have to account for VAT to the HMRC

You have to send a VAT return for your Sales and Purchases to HMRC

You do not pay VAT on your purchases

You do not receive VAT from your customers

VAT registered businesses are required by the law to account for all their sales and purchase transactions using VAT.

Explanation

VAT registered businesses are required by the law to account for all their sales and purchase transactions using VAT.

5. Which one of the following is the standard system used to record transactions?

The Accounting Equation

Single Entry

Double Entry

Chart of Accounts

Double entry is the standard system used to record transactions in accounting. This system follows the principle that every transaction has two aspects - a debit and a credit. Each transaction is recorded in at least two accounts, with one account debited and another account credited. This ensures that the accounting equation (Assets = Liabilities + Equity) remains in balance. Double entry provides a more accurate and complete record of financial transactions, allowing for better analysis and reporting of a company's financial position and performance.

Explanation

Double entry is the standard system used to record transactions in accounting. This system follows the principle that every transaction has two aspects - a debit and a credit. Each transaction is recorded in at least two accounts, with one account debited and another account credited. This ensures that the accounting equation (Assets = Liabilities + Equity) remains in balance. Double entry provides a more accurate and complete record of financial transactions, allowing for better analysis and reporting of a company's financial position and performance.

6. Which one of the following documents must be issued for credit sales?

Delivery note

Invoice

Sales order

Cash receipt

An invoice must be issued by the seller.

Explanation

An invoice must be issued by the seller.

7. Select the correct Accounting Equation from the following options.

Capital = Liabilities - Assets

Assets - Liabilities = Capital

Liabilities - Capital = Assets

Assets + Liabilities - Capital

The accounting equation informs about the status of the business. The balance sheet report is prepared using this accounting principle.

Explanation

The accounting equation informs about the status of the business. The balance sheet report is prepared using this accounting principle.

8. The accounts used to record double entries are called?

Profit and Loss accounts

Nominal accounts

Sales ledgers

Purchase ledgers

Nominal accounts are part of the main ledger where all the business transactions are recorded using a double-entry system.

Explanation

Nominal accounts are part of the main ledger where all the business transactions are recorded using a double-entry system.

9. Which tax code is used for entering wage transactions in the Sage?

T8

T4

T9

T5

Payment for wages is out of the scope of VAT. Sage uses the T9 code for these transactions.

Explanation

Payment for wages is out of the scope of VAT. Sage uses the T9 code for these transactions.

10. What type of tax is VAT?

It is also known as Value And Taxation for business.

VAT is a tax on the business income

VAT is a tax on consumer expenditure

VAT is a tax on wages paid by the businesses

VAT is paid by the end-user of the products and services.

Explanation

VAT is paid by the end-user of the products and services.