Revision for Access - Level 1

Question 1

What is an Asset

Answer 1

It is something that an organisation owns - it has value

Question 2

What is the term given to money that is owed by an organisation?

Answer 2

Liability

Question 3

Give an example of an Asset

Answer 3

Building; Motor Vehicles; Trade Receivables; Bank

Question 4

Give an example of a Liability

Answer 4

Loan; Trade Payables; Monies owed to HM Revenue and Customs; a bank overdraft

Question 5

What is a customer?

Answer 5

A person or organisation that buys goods or services

Question 6

What is the term given to a person or organisation that sells goods or services?

Answer 6

A supplier

Question 7

What is a debtor?

Answer 7

A person or business that owes an organisation money.

Question 8

What is a trade receivable?

Answer 8

Another term for a debtor?

Question 9

What is a creditor?

Answer 9

A person or business that is owed money by an organisation

Question 10

What is another term for a creditor?

Answer 10

A trade payable

Question 11

What is a cash sale?

Answer 11

Where a customer pays for goods or services at the time of the sale

Question 12

What is the term when an organisation pays for goods/services immediately at the time of the purchase transaction

Answer 12

A cash purchase

Question 13

What is a credit sale?

Answer 13

Where a customer is allowed to pay for goods/ services some time after the sale - they will be a debtor (trade receivable) until they have paid.

Question 14

What is a credit purchase?

Answer 14

Where an organisation pays for goods/ services some time after the initial purchase transaction. The purchaser will be a creditor (trade payable) of the organisation until payment is made.

Question 15

What is income?

Answer 15

Money an organisation receives for selling it’s goods or services

Question 16

What is expenditure?

Answer 16

Money paid by an organisation to purchase goods or services

Question 17

What is profit?

Answer 17

Where an organisation earns more money than it spends

Question 18

What is the term where an organisation spends more money than it earns?

Answer 18

A loss

Question 19

How do you calculate Gross Profit?

Answer 19

Sales - Cost of Sales = Gross Profit

Question 20

What is Cost of Sales

Answer 20

The cost of items necessary to make sales - in a retail organisation this would be goods bought to resell and in a manufacturing business it would be the raw materials and labour costs to make a product

Question 21

How do you calculate the Net Profit?

Answer 21

Gross profit - Expenditure = Net Profit

Question 22

What is a Purchase Order?

Answer 22

A document sent from the customer to a supplier detailing the goods that the customer wants to purchase

Question 23

What is an Invoice?

Answer 23

A business document sent from the supplier to the customer detailing the goods or services supplied and requesting payment

Question 24

What is a Credit note?

Answer 24

A document sent from the supplier to the customer detailing any goods refunded due to returned goods or correcting errors on the invoice

Question 25

What is a Remittance advice?

Answer 25

A document sent to inform from the customer to the supplier informing them of monies that have been paid in respect of an invoice

Question 26

What is a Statement of Account?

Answer 26

A document that summarises the transactions between a supplier and customer - invoice, credit note, payments received and any outstanding balance

Question 27

What document is given as proof of a cash sale?

Answer 27

A receipt

Question 28

Which book of prime entry would you record an invoice sent to a customer?

Answer 28

Sales Day Book

Question 29

What is recorded in the sales returns daybook?

Answer 29

Credit notes sent out to customers

Question 30

What is recorded in the Cash Receipts book?

Answer 30

All income and receipts received by an organisation

Question 31

Which book of prime entry would you record invoices received from suppliers?

Answer 31

Purchase Daybook

Question 32

Where would you record a credit note received from a supplier?

Answer 32

Purchase Returns Daybook

Question 33

What is recorded in the Cash Payments book?

Answer 33

All payments made by an organisation

Question 34

What is an alphabetical code?

Answer 34

Codes that only use letters

Question 35

What type of code uses letter and numbers?

Answer 35

Alphanumerical codes

Question 36

What is a numerical code?

Answer 36

Codes that only use numbers

Question 37

What is batch processing?

Answer 37

Similar transactions are dealt with at the same time and so are processed together rather than individually thus saving time

Question 38

What is the main purpose of a private organisation?

Answer 38

To make a profit

Question 39

What are the three main types of private organisations?

Answer 39

Sole trader; Partnership & Limited Company

Question 40

What is the main difference between a sole trader and a partnership?

Answer 40

A sole trader organisation is owned and run by an individual whereas a partnership is owned and run by two or more partners

Question 41

Who owns a Limited Company?

Answer 41

The shareholders - the people who own shares in the company

Question 42

Who runs the Limited Company?

Answer 42

Managers are appointed to run a company

Question 43

What is the main aim of organisations in the public sector?

Answer 43

To provide value for money to the public

Question 44

What are charities?

Answer 44

A type of business organisation which is set up to raise awareness of a particular cause and aims to raise funds to promote their cause

Question 45

Who are the internal customers of an accounts department?

Answer 45

Those internal to the organisation: managers; Human Resources department; marketing department; sales department etc

Question 46

Give examples of external customers of an accounts department

Answer 46

Customers; Suppliers; HM Revenue and Customs; Bank

Question 47

How would you keep a document stored on your laptop secure?

Answer 47

Password protect the document

Question 48

Where should you keep sensitive paper documents relating to employees?

Answer 48

In a locked filing cabinet

Question 49

Being a professional accountant means that you should have up to date technical knowledge, how could you do this?

Answer 49

Attend training courses; read technical magazines

Question 50

What is the term used to describe the correct and acceptable way of doing something?

Answer 50

Ethical

Question 51

What ways could an organisation act in an environmentally and socially responsible way?

Answer 51

Recycling facilities; reducing printing; installing energy-saving light bulbs; car sharing

Question 52

Why might it be useful to use a template in creating documents?

Answer 52

It means documents can be created quickly, easily and in a consistent style with a reduction of errors

Question 53

If you start a letter with Dear Sir/Madam, how will you close the letter

Answer 53

Yours faithfully

Question 54

If you start a letter with Dear Mr/Mrs, how will you close the letter

Answer 54

Yours sincerely

Question 55

What is a house style for documents?

Answer 55

It is a set of guidelines for presenting documents - it may contain information about the use of logos, font, font size, date format etc

Question 56

How would you communicate with colleagues advising them of a meeting the following day?

Answer 56

Email

Question 57

How would you communicate with a customer?

Answer 57

Letter

Question 58

What type of communication is formal?

Answer 58

A Letter

Question 59

How is informal communication different to formal

Answer 59

Less structured and informal language