Chapter 2 (Source Doc)

Question 1

Receipt

Answer 1

Acknowledges payment received from customers immediately after the business has sold goods or provided services

Question 2

Remittance advice

Answer 2

Informs credit supplier that payment by cheque has been made for a specific invoice

Question 3

Payment voucher

Answer 3

Processes payment to credit suppliers:
- must be approved by authorised personnel and
- must be supported by original supplier’s invoice

Question 4

Invoice

Answer 4

Informs credit customers of the amount owed after the business sold goods or provided services on credit

Question 5

Credit note

Answer 5

Reduces the amount owed by credit customers:
- who were previously overcharged or
- after goods were returned

Question 6

Debit note

Answer 6

Increases the amount owed by credit customers who were previously undercharged

Question 7

Bank statement

Answer 7

Checks and tallies against the business records of its cash at bank account

Question 8

Objectivity theory

Answer 8

Accounting information recorded must be supported by reliable and verifiable evidence so that financial statements will be free from opinions and biases

Question 9

Historical cost theory

Answer 9

Transactions should be recorded at their original cost