Chapter#1A: Review Of Bookkeeping

Question 1

What is Bookkeeping?

Answer 1

It’s the process of recording transactions and financial activities of a business

Question 2

What are Invoices?

Answer 2

are documents issued by companies as evidence of transactions made

Question 3

What is GST?

Answer 3

Canadian Goods and Services Tax

Question 4

What is HST?

Answer 4

Harmonized Sales Tax

Question 5

What is a Purchase Invoice?

Answer 5

is a record of purchase made by a company

Question 6

What is a Sale’s Invoice?

Answer 6

it’s a record of the sales made by a company for goods and/or services.

Question 7

What does the Sales Invoice include?

Answer 7

the date of sale
the customer 
invoice number customer number
Quantity Shipped
Taxes
Total Amount Due
Terms of Sale

Question 8

What does the Purchase Invoice include?

Answer 8

name of supplier
business number
company name and address
Account number
Invoice Date
Quantities ordered
Taxes
Final amount due
and Payment terms

Question 9

What does N/30 mean?

Answer 9

the company may allow the customer 30 days to pay the invoice before interest is charged

Question 10

What was 2/20 Mean?

Answer 10

it means the vendor may allow a 2% discount if the invoice is paid within 20 days of the invoice date

Question 11

What does the Sale Journal allow you to do?

Answer 11

Record the entire transaction on one line

Question 12

in what Journal is a Purchase invoiced entered into?

Answer 12

The Purchase Journal as a one line entry

Question 13

in what Journal is a Sales invoiced entered into?

Answer 13

Sales Journal with enough info to identify the source of the entry, financial info and the customer

Question 14

What is the Cash Receipts Journal?

Answer 14

to record all cash from customers payments on account

Question 15

What is the Cash Disbursements Journal

Answer 15

to record all cash paid by the company to suppliers

Question 16

What are the 3 ways you’ll likely enter cash disbursements

Answer 16

from checks, check stubs or copies of checks

Question 17

What must you enter from a check?

Answer 17

an account number in lower left corner

Question 18

What must you enter from a Check Stub?

Answer 18

the info should be on the stub

Question 19

What must you enter from a copy of a check?

Answer 19

complete details should be recorded on the copy

Question 20

What is one thing you must do when entering cash disbursements?

Answer 20

You must determine the reason

Question 21

What are Accounts Payable Ledgers?

Answer 21

it lists all vendors to whom your company has charged purchases

Question 22

What is the Accounts Receivable Ledger?

Answer 22

lists all customers and their outstanding balances for non-cash or on account sales made

Question 23

When is the General Ledger Trial Balance Prepared?

Answer 23

once each month

Question 24

Why is the general ledger Trial Balance Prepared?

Answer 24

to ensure the general ledger accounts are balanced

Question 25

Why would the Accounts Receivable Ledger be updated daily?

Answer 25

is updated daily to enable the company to determine credit limits, give discounts on payments, and to keep up-to-date records of all customers.

Question 26

Why do you age an Accounts Receivable Ledger Trial Balance?

Answer 26

To analyze how old the outstanding accounts are, for statement purposes and for collection purposes.

Question 27

Why do sales and purchase invoices generally request the same information?

Answer 27

The sales invoice of the seller or vendor represents the purchase invoice of the purchaser. Since they are in effect the same, the same information is generally requested on both invoices.