Quiz: How Well Do You Know About Accounting?

12 Questions | Total Attempts: 36

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Quiz: How Well Do You Know About Accounting?

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Questions and Answers
  • 1. 
    Which one of the following would you expect to find in the general ledger?
    • A. 

      Sales ledger control account

    • B. 

      Sales day book

    • C. 

      Individual customer account

    • D. 

      Sales order book

  • 2. 
    Of the following, which ONE provides the best example of an application of the accruals concept?
    • A. 

      Valuing inventory at the lower of cost or net realisable value

    • B. 

      Classifying an item of low cost as revenue rather than capital expenditure, even though it has a life of more than one year

    • C. 

      Writing off an irrecoverable debt after a customer has gone out of business

    • D. 

      Writing off the cost of a non-current asset by using depreciation

  • 3. 
    When non-current assets are depreciated using the diminishing balance method, an equal amount is charged for each year of the asset's life.
    • A. 

      True

    • B. 

      False

  • 4. 
    A non-current asset is disposed of and a part exchange allowance is given in respect of a new non-current asset. The amount of the allowance is:
    • A. 

      Debited to the disposal account and credited to the non-current asset cost account

    • B. 

      Debited to the non-current asset cost account and credited to the disposal account

  • 5. 
    To reduce the allowance for doubtful debts we must:
    • A. 

      Credit the allowance for doubtful debts account

    • B. 

      Debit the irrecoverable debts account

    • C. 

      Credit the allowance for doubtful debts adjustment account

    • D. 

      Credit the sales ledger control account

    • E. 

      None of the above

  • 6. 
    When a non-current asset is acquired by paying a regular monthly amount over a set period and then having ownership transferred at the end of that period, the funding method is described as:
    • A. 

      Cash purchase

    • B. 

      Hire purchase

    • C. 

      Borrowing

    • D. 

      Part exchange

  • 7. 
    When the cashbook operates only as a book of prime entry there is a ledger account for Bank in the general ledger to which total receipts and payments are posted.
    • A. 

      True

    • B. 

      False

  • 8. 
    A debit balance on the cash book means that the business has funds available
    • A. 

      True

    • B. 

      False

  • 9. 
    Which ONE of the following is NOT one of the Conceptual Framework's enhancing qualitative characteristics?
    • A. 

      Comparability

    • B. 

      Verifiability

    • C. 

      Relevance

    • D. 

      Understandability

  • 10. 
    Which of these can be capitalised as part of the cost of a new piece of machinery?
    • A. 

      Delivery charges to get the machinery to the business' factory

    • B. 

      Insurance for the machinery

    • C. 

      Maintenance costs after machinery has been used by the business

  • 11. 
    Which of the following would appear on the debit side of the VAT account?
    • A. 

      VAT on sales

    • B. 

      VAT on purchase returns

    • C. 

      VAT on Van's part exchange value

    • D. 

      VAT on an irrecoverable debt

  • 12. 
    Which ONE of these three would not require an adjustment in the cash book?
    • A. 

      Bank interest appears in the bank statement but has not been accounted for by the business

    • B. 

      The statement does not show a cheque that was paid into the bank yesterday

    • C. 

      A cheque received from a receivable has been placed on the debit side of the SLCA and the credit side of the cash book