Essential Book Keeping - Qp1
- 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 Funds can be withdrawn from the business at will.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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