Classification of Accounts

Question 1

Examples of Non-current assets (9)

Answer 1

Land, Factory, Buildings, Fixtures and Fittings, Machinery, Motor Vehicles, Plant, Land and Office Equipment

Question 2

Examples of current assets (4)

Answer 2

Inventory (of goods), cash, bank and trade receivables

Question 3

Examples of current liabilities (3)

Answer 3

Trade payables, Bank (overdrawn) and Bank loans (that need to be paid within the year)

Question 4

Example of Non-current liabilities (1)

Answer 4

Bank loan (that lasts longer than a year)

Question 5

Examples of revenues (5)

Answer 5

Rent received, Bank interest received, Commission received, Discounts received and profit on the sale of a Non-current asset

Question 6

What are the four accounts used for inventory (stock of goods)?

Answer 6

Sales - if the business sells inventory
Purchases - if the business buys inventory
Sales returns - if the customer gives inventory back
Purchases returns - if the business returns inventory to the suppliers

Question 7

When are credit notes and invoices used in these four accounts?

Answer 7

Sales - invoice sent to customer
Purchases - invoice received from the supplier
Sales returns - credit note sent to customer
Purchases returns - credit note received from the supplier