Chap 2 Quiz Flashcards
When a customer pays the supplier in cash, the supplier will issue the customer a document called a _____
receipt
An activity carried out by a business to provide goods and services in exchange for money is known as _____
business transaction
Only business activities that can be measured in dollars and cents are recorded. This is in accordance with the ___________ concept
monetary
Personal financial activities of the owner of a business are not recorded in the books of the business. This complies with the _______ concept
accounting entity
Fat Cat Food Supplies delivered cat food to Happy Pet Shop but did not receive payment from Happy Pet Shop till the following month. This is known as a ______ transaction
credit
Magic Paws Pet Shop paid Fat Cat Food Supplies immediately for the cat food purchase. This is known as a _______ transcation
cash
When a supplier sells goods on credit, the supplier will issue the customer a document called an ______
invoice
A supplier who has undercharged a customer will issue a document known as a
debit note
The business will receive from the bank a ______ which states the deposits and withdrawals made to and from the business bank account
bank statement
Transactions are recorded based on reliable and verifiable information. This is in accordance with the _____ concept
objectivity
Transactions should be recorded in the accounts at their original cost shown in the source documents. This practice complies with the _______ concept
historical cost
Explain the purpose of source documents?
Used to capture information on a business transaction
What is the purpose of a Bank statement
State the deposits into and withdrawals from the business bank account
What is the purpose of a credit note?
States the amount to be reduced from the invoice that was issued earlier
What is the purpose of a debit note?
States the amount to be added on to the invoice that was issued earlier
What is the purpose of an invoice?
States the amount the buyer owes the seller
What is the purpose of a payment voucher?
An internal document for the business to track payments made
What is the purpose of a receipt?
Acts as evidence that the business has made
Raja Money Changer purchased a multi currency counting machine on credit. Identfy the journal in which the transaction should be recorded? Cash book Purchase journal General journal Purchase returns journal
General Journal
Loo's Sanitary sold $750 worth of taps to SAC Inc on credit. Identify the Special Journal in which Loo's Sanitary would record the transaction in Purchase journal Sales journal Purchase returns journal Sales returns journal
Sales Journal
Which of the following source document is used to record transactions in the Cash Book? Payment voucher Debit note Credit note Sales invoice
Payment voucher
Hamidah Cashmeres returned scarves worth S1000 that were purchased on credit from Yuki Silk Manufacturing. Identify the source document Hamidah Cashmeres would receive from Yuki Silk Manufacturing and the journal Hamidah Cashmeres should record the transcations in Credit note; Purchase Returns Journal Credit note; Sales Returns Journal Debit note; Purchase Returns Journal Debit note; Sales Returns Journal
Credit note; Purchase Returns Journal
Hamidah Cashmeres returned scarves worth S1000 that were purchased on credit from Yuki Silk Manufacturing. Identify the source document Yuki Silk Manufacturing issued and the journal it should record the transactions in Credit note; Purchase Returns Journal Credit note; Sales Returns Journal Debit note; Purchase Returns Journal Debit note; Sales Returns Journal
Credit note; Sales Returns Journal
Explain the purpose of a General Journal?
To record transactions that are not recorded in the Special Journals and Cash Book
Explain why narration should be provided in the General Journal
Helps in recalling the background of each transaction
A business which prepares the financial statements every half is following the _______ concept
accounting period
Name the Subsidiary Ledgers, Explain the purpose if using Subsidiary ledgers
Sales ledgers
Purchase Ledgers
prevents the cluttering of the general ledger and reduces the size of the general ledger
The _______ concept assumes that the business has an indefinite economic life.
going concern
Accounting transactions are processed regularly in a systematic order known as the ________
accounting cycle
