Essential Book Keeping - Qp1

10 Questions | Total Attempts: 183

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Essential Book Keeping - Qp1

Questions and Answers
  • 1. 
    The basic aim of bookkeeping is to maintain a set of accurate records of a business’ financial transactions.
    • A. 

      True

    • B. 

      False

  • 2. 
    The benefit of a set of elaborate procedures is that it allows accountants and book-keepers to understand accounts from a range of sources.
    • A. 

      True

    • B. 

      False

  • 3. 
    There are four good reasons for keeping books. These are:
    • A. 

      Financial gain

    • B. 

      Financial control

    • C. 

      Taxation

    • D. 

      Accounting costs

    • E. 

      Accounting books

    • F. 

      Bank borrowing

    • G. 

      Bank lending

  • 4. 
    The key to learning successfully is to spend some time mastering the basics before moving on to the more complicated subject areas.
    • A. 

      True

    • B. 

      False

  • 5. 
    There is a single ‘perfect’ way of keeping books that suits everyone.
    • A. 

      True

    • B. 

      False

  • 6. 
    If you trade as a company, you will be controlled by ______ of the 1985 Companies Act.
    • A. 

      Section 12

    • B. 

      Section 22

    • C. 

      Section 32

    • D. 

      Section 42

  • 7. 
    The simplest business structure is the joint trader.
    • A. 

      True

    • B. 

      False

  • 8. 
    The sole trader is: (Select four)
    • A. 

      Is self-employed and is not recognised in law as a separate entity for business purposes.

    • B. 

      Carries some of the responsibility for running the business.

    • C. 

      Takes all the profit of the business. Funds can be withdrawn from the business at will.

    • D. 

      Is not liable for all debts of the business.

    • E. 

      Can lose personal possessions and be made bankrupt for any debts of the business.

    • F. 

      Can be sued and can sue other persons (or organisations) for debts owed.

    • G. 

      Will have to register for VAT depending on the level of turnover.

  • 9. 
    Advantages of trading as a Sole Trader includes: (Select four)
    • A. 

      Generally lower accounting charges

    • B. 

      Full personal liability for debts of the business

    • C. 

      No need to publish profits

    • D. 

      National Insurance cheaper for sole traders than directors

    • E. 

      Raising new capital is probably more difficult.

    • F. 

      Proprietors taxed under Schedule D – slightly more flexible

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