Chap 2 Quiz

Question 1

When a customer pays the supplier in cash, the supplier will issue the customer a document called a _____

Answer 1

receipt

Question 2

An activity carried out by a business to provide goods and services in exchange for money is known as _____

Answer 2

business transaction

Question 3

Only business activities that can be measured in dollars and cents are recorded. This is in accordance with the ___________ concept

Answer 3

monetary

Question 4

Personal financial activities of the owner of a business are not recorded in the books of the business. This complies with the _______ concept

Answer 4

accounting entity

Question 5

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

Answer 5

credit

Question 6

Magic Paws Pet Shop paid Fat Cat Food Supplies immediately for the cat food purchase. This is known as a _______ transcation

Answer 6

cash

Question 7

When a supplier sells goods on credit, the supplier will issue the customer a document called an ______

Answer 7

invoice

Question 8

A supplier who has undercharged a customer will issue a document known as a

Answer 8

debit note

Question 9

The business will receive from the bank a ______ which states the deposits and withdrawals made to and from the business bank account

Answer 9

bank statement

Question 10

Transactions are recorded based on reliable and verifiable information. This is in accordance with the _____ concept

Answer 10

objectivity

Question 11

Transactions should be recorded in the accounts at their original cost shown in the source documents. This practice complies with the _______ concept

Answer 11

historical cost

Question 12

Explain the purpose of source documents?

Answer 12

Used to capture information on a business transaction

Question 13

What is the purpose of a Bank statement

Answer 13

State the deposits into and withdrawals from the business bank account

Question 14

What is the purpose of a credit note?

Answer 14

States the amount to be reduced from the invoice that was issued earlier

Question 15

What is the purpose of a debit note?

Answer 15

States the amount to be added on to the invoice that was issued earlier

Question 16

What is the purpose of an invoice?

Answer 16

States the amount the buyer owes the seller

Question 17

What is the purpose of a payment voucher?

Answer 17

An internal document for the business to track payments made

Question 18

What is the purpose of a receipt?

Answer 18

Acts as evidence that the business has made

Question 19

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

Answer 19

General Journal

Question 20

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

Answer 20

Sales Journal

Question 21

Which of the following source document is used to record transactions in the Cash Book?
Payment voucher
Debit note
Credit note
Sales invoice

Answer 21

Payment voucher

Question 22

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

Answer 22

Credit note; Purchase Returns Journal

Question 23

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

Answer 23

Credit note; Sales Returns Journal

Question 24

Explain the purpose of a General Journal?

Answer 24

To record transactions that are not recorded in the Special Journals and Cash Book

Question 25

Explain why narration should be provided in the General Journal

Answer 25

Helps in recalling the background of each transaction

Question 26

A business which prepares the financial statements every half is following the _______ concept

Answer 26

accounting period

Question 27

Name the Subsidiary Ledgers, Explain the purpose if using Subsidiary ledgers

Answer 27

Sales ledgers
Purchase Ledgers
prevents the cluttering of the general ledger and reduces the size of the general ledger

Question 28

The _______ concept assumes that the business has an indefinite economic life.

Answer 28

going concern

Question 29

Accounting transactions are processed regularly in a systematic order known as the ________

Answer 29

accounting cycle