bookkeeping

Question 1

purchase order

Answer 1

when a purchase is going to be made

Question 2

purchase invoice

Answer 2

receipt for when a purchase has been made and payment is needed

Question 3

sales invoice

Answer 3

when a sales order has happened

Question 4

credit note

Answer 4

when a sales or purchase return has been madr

Question 5

statement of account

Answer 5

contains details of all customer transactions

Question 6

remittance advice

Answer 6

similar to a statement, sent by buyer to supplier when making payment

Question 7

petty cash voucher

Answer 7

when a low value purchase has been made

Question 8

sales day book

Answer 8

used for credit revenue and credit sales

Question 9

purchase day book

Answer 9

used for credit purchases

Question 10

sales return day book

Answer 10

used for sales returns from customers

Question 11

purchase return day book

Answer 11

used for purchases returned to supplier

Question 12

cash book

Answer 12

used for receipts and payments in cash

Question 13

petty cash book

Answer 13

used for recording small items of expenditure

Question 14

contra entry

Answer 14

when a transaction affects both receipt and payment side, it also affects cash and bank

Question 15

dishonoured cheque

Answer 15

when an amount has not been received in bank account

Question 16

non current asset

Answer 16

long term asset (>1 year)
building and machinery

Question 17

current asset

Answer 17

short term asset (<1 year)
inventory and trade receivables

Question 18

capital expenditure

Answer 18

when buying a new non-current asset
improving an existing non-current asset

Question 19

revenue expenditure

Answer 19

day to day business operations
short term benefit to business

Question 20

depreciation

Answer 20

used to calculate useful life and the cost over the full life of the asset
wear and tear
technological improvements
depletion of asset

Question 21

straight line method

Answer 21

equally distributed over useful life of asset
value of asset will go to 0 by the end of useful life
cost-residual value/useful life

Question 22

reducing balance method

Answer 22

high depreciation in initial years
depreciation reduces each year
value of asset will never reach 0
cost-total depreciation*depreciation%

Question 23

trial balance advantages

Answer 23

shows a summary of the business
checks the numerical errors
helps prepare financial statements

Question 24

debit

Answer 24

asset
expense
drawings (AED)

Question 25

credit

Answer 25

liability
income
capital (LIC)

Question 26

control account

Answer 26

helps detect any errors in double entry system
sales ledger control account
purchase ledger control account

Question 27

bank reconciliation

Answer 27

balance in cash book = balance in bank statement
possible timing difference
errors in cash book/bank statement
transactions unrecorded in cash book

Question 28

where are irrecoverable debts recorded

Answer 28

journal

Question 29

where would a credit note sent by a trader be recorded

Answer 29

purchase returns day book

Question 30

what would the source document be is u received a cheque from a credit customer

Answer 30

payslip/cheque