Accounts Form 3

Question 1

What is carriage inward

Answer 1

Transport costs of purchases (costs of goods sold)

Question 2

Carriage outwards

Answer 2

Transport costs of sales (expense)

Question 3

Cashbook

Answer 3

Cash account and bank account combined into one account having a column for cash and bank on debit and credit side

Question 4

Cash discount

Answer 4

Decrease in amount owed given to encourage quick payment

Question 5

Contra entry

Answer 5

Used in cashbook when both the debut and credit sides are used. When money is transferred from cash to bank or visa versa

Question 6

Control account

Answer 6

Accounts used to check if any errors were made in the sales or purchases ledger

Question 7

Credit note

Answer 7

Document sent when when goods are returned inwards. It is the source document for the returns inwards day book

Question 8

Creditor/accounts payable/ trade payable

Answer 8

A person or business that are owed for goods bought from them on credit

Question 9

Current assets and liabilities

Answer 9

Assets that can quickly be turned into cash (CA)

Amounts owing that must be paid back within a year

Question 10

Day books

Answer 10

Books of original entry for sales and ourchases of good on credit and the corresponding returns inwards and outwards

Question 11

Debit note

Answer 11

Document sent when good are returned outwards. Source document for returns outwards day book

Question 12

Debtor/account receivable/trade receivable

Answer 12

A person/business that owes to the business for goods sold to them on credit

Question 13

Discounts allowed

Answer 13

Reduction of price given to customers when they pay quickly. Cash discount

Question 14

Discounts received

Answer 14

Cash discount received when paying a trade payable

Question 15

Double entry

Answer 15

Process of entering every action taken by the business in two places. One debit and one credit

Question 16

Final accounts/financial statements

Answer 16

End of year statement of profit or loss and state,net of financial position

Question 17

Folio columns

Answer 17

Reference to the corresponding page, used in daybooks

Question 18

General ledger

Answer 18

Book containing all accounts that don’t go to sales or purchases ledger

Question 19

Gross profit

Answer 19

Profit made from buying and selling goods before expenses and revenue are accounted for

Question 20

Impersonal accounts

Answer 20

Not personal accounts. Real/Nominal accounts

Question 21

Impress system

Answer 21

System used in petty cash books where the amount spent is replaced each time so each period starts with the same,e amount in petty cash

Question 22

Stat of pl

Answer 22

Statement prepared for an accounting period that calculates the gross and net profit made

Question 23

Invoice

Answer 23

Document issued when goods are sold . sales invoice is the source document from which we draw up the sales day book . Purchases invoice is the source document from which we draw up the purchases day book

Question 24

Journal

Answer 24

Books of original entry used to record non current assets bought and sold on credit. Writing off bad debts, correction of errors, to transfer amounts to the statement of profit or loss and any other extraordinary transactions

Question 25

Net profit

Answer 25

Final order from stat of pl

Gross profit - expenses

Question 26

Nominal ledger/general ledger

Answer 26

Book containing all accounts that don’t go into sales or purchases ledger

Question 27

Non current assets

Answer 27

Assets bought for long term use in the business like cars

Question 28

Overdraft

Answer 28

When more money is taken out of the bank account than is available

Question 29

Personal account

Answer 29

Trade receivable or trade payable

Question 30

Purchases day boook

Answer 30

Book of original entry for good bought on credit

Question 31

Purchases invoice

Answer 31

Invoice received when purchases are made it is the source document from which we draw up the purchases day book

Question 32

Real account

Answer 32

Account of items of property

Question 33

Revenue expenditure

Answer 33

Money spent on the day to day running of the business

Question 34

Sales invoice

Answer 34

Invoice when goods are sold . Source document used to draw up sales day book

Question 35

Trade discount

Answer 35

Reduction in price to be paid when goods are bought in bulk

Question 36

Trade payables

Answer 36

Amounts owing for goods bought on credit

Question 37

Trade receiveable

Answer 37

Amounts owing by others for goods sold on credit

Question 38

Trial balance

Answer 38

List of all account balances having debit and credit column, total of each should be equal

Question 39

Which are the books of original entry

Answer 39

Sales, purchases, sales returns, purchases return ledgers