FA1 Flashcards
What is the primary function of a credit sales invoice which a customer has received from a supplier?
It is a demand for payment within an agreed time from the supplier
Which of the following correctly describes the function of a credit note issued by a supplier to one of its customers?
A document used by the supplier to cancel part or all of a previously issued invoice
Which of the following correctly describes the term ‘debit note’
It is issued by a customer to a supplier to request a credit note
What is the purpose of a remittance advice?
It provides details of amounts being paid
What is the name given to a code in which the level of detail increases in a logical way as you work through the code?
Hierarchical or significant digit
What is a ‘trade discount’?
A reduction in the invoice price by a supplier because of the terms of trade agreed with an individual customer
Which of the following correctly explains sales tax?
A tax levied on the sale of goods and services which is administered by the government
Sales tax rate = 15%. Gross sales are $690. What are the net sales and the sales tax?
Net = $600; Sales tax = $90
Sales tax rate = 16%. Full net price before any bulk discount = $3,000. Bulk discount = 20%. What are the gross sales and the sales tax?
Gross = $2,784; Sales tax = $384
Gross Sales
After tax
Net Sales
Before tax
In a period a company charges $4,600 sales tax on its sales. Its purchases from its suppliers cost $6,000 including sales tax at 20%. What payment/receipt will be made to/received from the government at the end of the period?
3,400 to be paid to the government
Which of the following statements in relation to computerized data entry is/are true? 1. Automatic data entry such as scanning avoids transcription errors. 2. Computerization avoids data entry errors caused by malicious intent on the part of staff
Statement 1: Correct; Statement 2: Incorrect
What is the term for a computer program that deals with one particular part of a business accounting system?
Module
(A computerized accounting package will typically consist of several modules)
What type of information is regulated by Data Protection legislation?
Information about individuals
(In the UK, the Data Protection Act 1998 is concerned with how information about individuals is managed. Similar legislation exists in other jurisdictions)
Which of the following are appropriate ways of dealing with sensitive or confidential business documents that are no longer needed?
(i) Microfilm or microfiche for long-term storage
(ii) Archiving documents for storage
(iii) Secure destruction
(iv) It can be thrown away
(i), (ii) and (iii) only
(Simply throwing such documentation away is not acceptable, because it could result in third parties gaining access to sensitive or confidential information)
Whenever property changes hands there has been a …
Business transaction
A cash transaction is one where the …
buyer pays cash to the seller at the time the goods or services are transferred.
A credit transaction is …
a sale or purchase which occurs some time earlier than cash is received or paid
The purpose of the accounting system is to …
RECORD, SUMMARIZE and PRESENT the information contained in the documentation generated by transactions.
A discount is a reduction in the price of goods below the amount at which those goods would normally be sold to other customers of the supplier …
- A TRADE DISCOUNT is a reduction in the amount of money demanded from a customer.
- A CASH DISCOUNT is an optional reduction in the amount of money payable by a customer.
Many business transactions involve sales tax …
- Output tax is sales tax charged on goods and services sold by a business.
- Input tax is sales tax paid on goods and services bought in by a business.
A business must always be treated as a … from its owners when preparing accounts
separate entity
… is the excess of income over expenditure.
Profit
