Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Introduction to Accounting > Weekly Quizzes > Flashcards

Weekly Quizzes Flashcards

1
Q

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

A

Current

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

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

A

An expense

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

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

A

A Statement of Financial Position

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

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

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

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

A

Prudence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

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

A

Reliability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

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

A

Financial Accounting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

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

A

Capital and Liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

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?

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

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

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

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

A

dual

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

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

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

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

A

Debit the gas account

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

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?

A

Bank, Capital

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

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

A

Bank, Sales

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

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

A

Debited by £12,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

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

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

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

A

True

19
Q

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

A

Credit Capital Account

20
Q

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

A

False

21
Q

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

A

False
Should be balance b/d

22
Q

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

A

Asset

23
Q

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?

A

Debit the liability account

24
Q

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

A

False
Bottom of the biggest side

25
Q

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

A

Trade Payables

26
Q

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

A

Assets

27
Q

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?

A

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

28
Q

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

A

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

29
Q

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.

A

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)

30
Q

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.

A

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

Sales:
TR £1,000 Credit
TR £350 Debit

Bank:
TR £650 Debit

31
Q

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

A

false

32
Q

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

A

straight line

33
Q

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

A

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.

34
Q

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?

A

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

35
Q

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?

A

2024 Income Statement

36
Q

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

A

Sales revenue

37
Q

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

A

true

38
Q

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

A

Current assets

39
Q

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

A

Reducing balance

40
Q

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?

A

true

41
Q

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

A

True

42
Q

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%?

A

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

43
Q
A

Introduction to Accounting (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions