Weekly Quizzes

Question 1

An Asset whose benefit will be used up within a year is a description of a … asset

Answer 1

Current

Question 2

The amount it costs a business to earn income is a description of…?

Answer 2

An expense

Question 3

The value of a non-current asset should be recorded in which financial statement?

Answer 3

A Statement of Financial Position

Question 4

A sole trader’s personal transactions should be shown in the business accounts

Answer 4

False

Question 5

Exercise caution, don’t be overly optimistic. This is the definition of which accounting convention?

Answer 5

Prudence

Question 6

Freedom from errors and bias is a description of which important qualitative characteristic of accounting?

Answer 6

Reliability

Question 7

The Income Statement and Statement of Financial position are examples of which type of Accounting?

Answer 7

Financial Accounting

Question 8

When completing DEBK, which other classes of account behave the same as Revenue?

Answer 8

Capital and Liability

Question 9

You should never have a transaction (an amount) recorded in a T-account that is labelled the same as the T-account itself is called?

Answer 9

True

Question 10

The account which is debited is the account which ‘receives’ the value of the transaction?

Answer 10

True

Question 11

The accounting convention that governs double entry bookkeeping is the … aspect convention

Answer 11

dual

Question 12

When a business takes out a loan, the loan account will be debited?

Answer 12

False

Question 13

£650 is spent on paying off a gas bill. Should the gas account be debited or credited by £650?

Answer 13

Debit the gas account

Question 14

An owner decides to invest £60,000 of their own money into their business. Which two accounts will be needed to record this transaction in?

Answer 14

Bank, Capital

Question 15

A company makes a sale worth £1000. The customer immediately pays via online bank transfer. In which TWO accounts will this transaction be recorded?

Answer 15

Bank, Sales

Question 16

A business dec ides to spend £12,000 on a new machine. Should the machine account be debited or credited by £12,000

Answer 16

Debited by £12,000

Question 17

When the owner invests their own money in to their business the capital account will be credited with the value of the investment?

Answer 17

True

Question 18

A sale is made. The sales account should be credited with the value of the sale?

Answer 18

True

Question 19

An owner invests £10,000 of their own money into the business. Should the Capital account be debited or credited?

Answer 19

Credit Capital Account

Question 20

An organisation purchases new IT equipment which will enable faster data processing. This purchase should be recorded in a ‘purchases’ T-account.

Answer 20

False

Question 21

The balance c/d from each T-account should be recorded in the Trial Balance?

Answer 21

False
Should be balance b/d

Question 22

What ‘Class’ of account is a ‘Vehicles’ account?

Answer 22

Asset

Question 23

If the transaction you are recording into T-accounts will have the effect of reducing a liability, would you record that amount on the debt or the credit side of the liability account?

Answer 23

Debit the liability account

Question 24

When balancing off T-accounts the balance b/d is recorded at the bottom of the smaller side?

Answer 24

False
Bottom of the biggest side

Question 25

If a purchase of materials is made on credit should a trade receivables or a trade payables T-account be created?

Answer 25

Trade Payables

Question 26

Referring to the accounting equation - what 'class' of account would a trade receivables account be?

Answer 26

Assets

Question 27

A customer has returned goods worth £600 for a cash refund. How should this be accounted for? Which account should be debited and which should be credited?

Answer 27

Sale - £600 cash credited Cash - £600 sales debited RETURN: Cash - £600 sales credited Sale - £600 cash debited

Question 28

A supplier has given a prompt payment discount. Should the discount account be debited or credited?

Answer 28

Credited (TP) (debited in trade payables account to discount)

Question 29

Show the following transactions in T-accounts The company buys £650 worth of inventory on credit. The supplier says that a 3% prompt payment discount will be granted for payment within 30 days. The company pays the supplier the amount due, by cheque, within 20 days.

Answer 29

TP: £650 Purchases (credit) £630.50 Bank (debit) 19.50 Discount (debit) Purchases: £650 TP (debit) Bank: £630.50 TP (credit) Discount: 650 x 0.03 = 19.50 £19.50 TP (credit)

Question 30

Show the following transactions in T-accounts: A company makes sales of £1,000 on credit. The credit customer returns £350 worth of the goods bought. The customer pays their remaining balance via cheque.

Answer 30

TR: Sales £1,000 Debit Sales £350 Credit Bank £650 Credit Sales: TR £1,000 Credit TR £350 Debit Bank: TR £650 Debit

Question 31

An accrual is recorded as a current asset in the Statement of Financial Position?

Answer 31

false

Question 32

Which depreciation method will produce an equal annual depreciation expense each year for a non-current asset?

Answer 32

straight line

Question 33

What would the total assets value be for the Statement of Financial Position of an organisation owing the following? Vehicles £250,000 Prepayments £5,000 Trade Payables £16,000 Premises £500,000 Opening Inventory £60,000 Closing Inventory £75,000 Cash £46,000 Overdraft £2,000 Capital £70,000

Answer 33

Only assets should be included in this calculation: Vehicles, prepayments, premises, closing inventory (opening is not included, this is what you started the year with but not what you owned at year end) and cash.

Question 34

An asset costs £50,000 has an estimated scrap value of £6,000 and projected lifetime of 5 years. What is the annual depreciation expense using straight line depreciation?

Answer 34

Cost minus scrap divided by number of years SO (50,000 - 6,000) 5 = 8,800.

Question 35

An organisation does not get around to paying their staff for Christmas overtime work by the time the organisation closes for the bank holiday on 31st December 2024. should the £10,000 overtime bill owed be recorded as an expense in the 2024 Income Statement or the 2025 Income Statement when the bill is finally paid?

Answer 35

2024 Income Statement

Question 36

Which of the following is NOT included in the Statement os Financial Position? Current Assets Owner's Equity Sales Revenue Non-Current Liabilities

Answer 36

Sales revenue

Question 37

True or false? Prepayments should be excluded from the current years Income Statement?

Answer 37

true

Question 38

In which section of the Statement of Financial Position would inventory appear?

Answer 38

Current assets

Question 39

Which deprecation method calculated depreciation based on the 'net book value' of an asset rather than its cost?

Answer 39

Reducing balance

Question 40

A customer has received and signed for the goods they ordered from an organisation. The organisation can now record the value of this sale as sales revenue in the Income Statement - true or false?

Answer 40

true

Question 41

True or false? Cost of Sales is calculated as follows: Opening inventory plus purchases less closing inventory

Answer 41

True

Question 42

What would the 2024 depreciation expense be for a £120,000 asset that was purchased 1st Jan 2023 and its depreciation using a reducing balance rate of 20%?

Answer 42

2023 depreciation: £120,000 x 0.20 = £24,000 2024 depreciation: £120,000 - £24,000 = £96,000 (NBV) x 0.20 = £19,200