The Accounting System

Question 1

Accounting involves keeping F…….. R…..’s up-to-date and the preparation of F…….. S……..’s

Answer 1

1. Financial records
2. Financial statements

Question 2

Keeping accounts is important for:

• I……. C…….
• M…….. B……. P………
• S…….. R………..

Answer 2

1- Internal Control
2 - Measuring Business Performance
3 - Statutory Requirements

Question 3

What are Statutory Requirements ?

Answer 3

Rules or laws that have formally been written down.

Question 4

The function of the (Financial Accountant/Management Accountant) is concerned with financial transactions and with taking further the information produced by the person who keeps the books ?

Answer 4

Financial Accountant

Question 5

Maintaining accounts in a straightforward honest way, is it an example of the quality (Accuracy/Objectivity/Integrity/Confidentiality) ?

Answer 5

Integrity

Question 6

Not revealing any data to people outside of the business / revealing information to only the people entitled to it, is an example of the quality (Accuracy/Objectivity/Integrity/Confidentiality) ?

Answer 6

Confidentiality

Question 7

A (Invoice/Credit Note/Delivery Note) is the financial document produced when a business sells goods on credit ?

Answer 7

Invoice

Question 8

(Cash/Credit) sales and purchases is where payment is immediate ?

Answer 8

Cash Payments / Purchases

Question 9

Person who owes you money when you sell on credit is also known as a (Trade payable/ Trade receivable) ?

Answer 9

Trade receivable

Question 10

A person who you owe money to when you buy on credit is also known as a (Trade payable/ Trade receivable)

Answer 10

Trade Payable

Question 11

The first place you record financial documents is (General Ledger/Payables Ledger/Receivables Ledger/Book Of Prime Entry) ?

Answer 11

Book Of Prime Entry

Question 12

Books Of Prime Entry

The (Sales Day Book/Purchases Day Book) is where you record all credit sales made, complied from invoices issued ?

Answer 12

Sales Day Book

Question 13

Books Of Prime Entry

The (Sales Day Book/Purchases Day Book) is where you record all credit purchases made, complied from invoices received ?

Question 14

Books Of Prime Entry

If a credit customer returns goods it will be recorded in the S…. R…… D.. B… ?

Answer 14

Sales Returns Day Book

Question 15

Books Of Prime Entry

If you have to return goods to a credit supplier, it will need to be recorded in the P…….. R…… D.. B… ?

Answer 15

Purchase Returns Day Book

Question 16

The C… B… is where a business would record cash and bank transactions ?

Answer 16

Cash Book

Question 17

Division Of The Ledger

A business would keep all the personal accounts of the trade receivables in the (General/Receivable/Payable) ledger ?

Answer 17

Receivable Ledger

Question 18

Division Of The Ledger

A business would keep all the personal accounts of the trade payables in the (General/Receivable/Payable) ledger ?

Answer 18

Payable Ledger

Question 19

When supplies of a businesses inventory received, they are entered in the I…….. R….. ?

Answer 19

Inventory Record

Question 20

The equation for the statement of profit or loss is income (Minus/Add/Divided by) expenses ?

Answer 20

Minus

Question 21

The equation for the statement of financial position is assets (Add/Minus/Divided by) liabilities ?

Answer 21

Minus

Question 22

Items with a lifespan of more than one year which are bought for use within the business are (Current/Non-current) assets ?

Answer 22

Non-current Assets

Question 23

Items needed for the everyday running of the business are (Current/Non-current) assets ?

Answer 23

Current Assets

Question 24

Most assets are (Tangible/Intangible) ?

Answer 24

Tangible

Question 25

*True or False** **Goodwill** is classed as an **asset** ?

Answer 25

**True** - this is an example of an **intangible Non-current asset**

Question 26

**(Assets/Liabilities)** are items that a business owns ?

Answer 26

**Assets**

Question 27

**(Assets/Liabilities)** are items that a business owes ?

Answer 27

**Liabilities**

Question 28

Trade payables and any other amounts owed to people that can be payed back within 12 months are **(Non-current/Current)** Liabilities ?

Answer 28

**Current liabilities**

Question 29

Long term liabilities that are repayable in more than 12 months are **(Current/Non-Current)** Liabilities ?

Answer 29

**Non-current Liabilities**

Question 30

Examples of **(Current/Non-Current)** assets would be; Computers, Vehicles & Premises ?

Answer 30

**Non-Current**

Question 31

Examples of **(Current/Non-Current)** Assets would be; Trade receivables, inventory & money in the bank ?

Answer 31

**Current**

Question 32

Examples of **(Current/Non-Current)** liabilities would be; Bank loans & Mortgages ?

Answer 32

**Non-Current**

Question 33

Examples of **(Current/Non-Current)** liabilities would be; Trade payables & Bank overdrafts ?

Answer 33

**Current**

Question 34

Money invested into the business by the owner / the owners steak in the business is known as **C…… or E…..** ?

Answer 34

Capital or Equity

Question 35

The accounting equation uses **Assets** and **Liabilities** to work out **Capital**, what is the equation ?

Answer 35

Assets **minus** Liabilities **equals** Capital