Accounting Basics Quiz Level I & II
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Questions and Answers

The total of the purchase Day book is posted periodically to the:

  • Debit of supplier a/c
  • Debit of purchases a/c (correct)
  • Cash book
  • Credit of purchases a/c

Total of the sales book for March indicates:

  • Total sales less sales return
  • Total sales for the month
  • Total cash sales for the month
  • Total credit sales for the month (correct)

Purchases book is used to record:

  • All credit purchases
  • All credit purchases of assets
  • All purchases of goods
  • All credit purchases of goods (correct)

The source document or voucher used for recording entries in sales book is:

<p>Invoice sent out (C)</p> Signup and view all the answers

The debit note issued are used to prepare

<p>Purchase return book (D)</p> Signup and view all the answers

Purchased goods from E worth Rs. 5,000 on credit basis

<p>Purchases book (B)</p> Signup and view all the answers

Unpaid salary is to be provided for in the accounts

<p>Journal proper (B)</p> Signup and view all the answers

The Sales returns book records

<p>The return of goods purchased (B)</p> Signup and view all the answers

The sales book is

<p>Part of the journal (B)</p> Signup and view all the answers

The balance of Petty cash is:

<p>An asset (A)</p> Signup and view all the answers

Cash book is a form of:

<p>All of the above (D)</p> Signup and view all the answers

Double entry in cash book is completed when:

<p>Deposited cash into bank (B)</p> Signup and view all the answers

Salaries due for the month of march will appear

<p>As a contra entry (D)</p> Signup and view all the answers

Flashcards

Purchase Day Book total posting

The total from the purchase day book is periodically posted to the debit of the purchases account.

Sales Book total (March)

The total of the sales book for March represents the total sales for the month.

Purchases Book

Records all credit purchases of goods.

Sales Book source document

Invoices sent out are used for recording entries in the sales book.

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Debit Note use

Debit notes are used to prepare purchase return book.

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Record purchase from E (Rs. 5,000)

The purchase of goods from E on credit is recorded in the purchases book.

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Unpaid Salary

Unpaid salary is an accrued expense that should be accounted for in the accounts.

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Sales Returns Book

Records the return of goods sold.

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Sales book nature

The sales book is a subsidiary book, a part of the overall accounting system.

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Petty Cash balance

The balance in the Petty cash book is considered an asset.

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Cash Book nature

A cashbook is a subsidiary book that acts also as a journal and ledger for cash transactions.

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Double-entry cash book completion

Double-entry in the cash book is complete when all aspects of a cash transaction are recorded.

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March salaries in cash book

Salaries due for March will be recorded in the payment side of the cash book, as an accrued expense.

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Cash Book scope

The cash book records all cash receipts and payments.

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Cash column balance

The balance of the cash column in the cash book can be either debit or credit depending on the transactions.

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Cash discount application

Cash discount is provided on prompt payment of goods.

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Petty Cash Book type

A petty cash book is a subsidiary book.

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Cash Book Accounting Rule

The rule of personal accounts is followed when making entries in a cash book.

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Trial Balance preparation methods

Trial balances can be prepared using the balance method, total method, or a combination of both.

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Customer goods return document

A credit note is sent to a customer when they return goods.

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Study Notes

Level - I (K1)

  • The total of the purchase day book is periodically posted to the debit of the purchases account.
  • The total of the sales book for March indicates the total sales for the month.
  • A purchase book records all credit purchases of goods.
  • The invoice sent out is the source document used in the sales book.
  • Debit notes are used to prepare purchase return books.
  • Purchased goods worth Rs. 5,000 on credit are recorded in the Purchases book.
  • Unpaid salaries are provided for in the accounts.
  • Sales return books record the return of goods sold.

Level - II (K2)

  • A debit note is sent to a customer when he/she returns goods.
  • Purchase of fixed assets on credit is recorded in the Journal Proper.
  • Trade discounts are not recorded in the books.
  • The total of sales book is posted in the credit side of the Sales Account.
  • A note sent by a buyer on return of goods is a credit note.
  • Purchase of furniture on credit is recorded in the Purchase book.
  • An allowance of Rs.50 for early payment of Rs. 1,050 is recorded in the Cash book.
  • A second-hand motor car purchased on credit is recorded in the Journal Proper.

Level - III (K3)

  • Goods sold for cash (Rs. 10,000) plus 10% sales tax are credited by Rs. 11,000 in the sales account.
  • The balance of the sales day book is Rs. 25,000, and Rs. 5,000 was recovered from debtors; the remaining balance of Rs. 20,000 is transferred.
  • If debit and credit aspects of a transaction are recorded in the cash book, it's a double entry.
  • Cheques received but deposited the next day are recorded in the Bank column of the cash book.
  • Re-imbursement for petty cash expenses (telephone Rs. 150, tiffin Rs. 50, repairs Rs. 30, general expenses Rs. 100) is Rs. 300.
  • Interest received of Rs. 100 recorded as interest paid reduces the cash balance by Rs. 100.
  • The difference of the total debit and credit sides of the trial balance is transferred to the Miscellaneous account.
  • A machine purchased on 1 April 2007 for Rs. 5,00,000 and another on 1 October 2007 for Rs. 2,00,000, with depreciation @20% p.a. on written down value, has depreciation of Rs. 1,20,000 for the year ending 31 March 2008.
  • The original cost of a machine rs.1,50,000, estimated life 5 years and expected salvage value Rs. 3,000, has a depreciation rate of 19.6% per annum.
  • Salman and Usman Bros. acquired a machine on 1 July 2014 at a cost of Rs. 70,000 and installation cost Rs.5,000; @ 10% on straight-line method depreciation, the net value at the end of the second year is Rs 63,750.

Unit 4 - Depreciation

  • Depreciation starts on a machine from the date it's put to use.
  • Depletion method of depreciation is applied to wasting assets.
  • Depreciation is charged on the written down value in reducing balance method.
  • The main objective of depreciation is to reduce tax.
  • Depreciation is due to wear and tear.
  • Salvage value is the definite sale price of the asset.
  • Depreciation is calculated under the diminishing balance method based on the book value.
  • Becoming out of date is known as obsolescence.
  • Depreciation is the decrease in the value of an asset over time due to wear and tear or obsolescence.
  • Depreciation is normally calculated using the straight-line method.
  • Depreciation, in accounting, is the allocation of an asset's cost over its useful life.

Unit 5 - Final Accounts

  • The primary purpose of Final Accounts is to communicate financial information.
  • The profit and loss account is also known as the income statement.
  • Concerning adjustments for accrued expenses, the adjustments increase liabilities.
  • The trading account shows the gross profit or loss on trading activities.
  • The profit and loss account reflects the financial performance for a given period.
  • The balance sheet contains assets and liabilities.
  • Adjustments in Final Accounts ensure accurate financial reporting.
  • Goodwill, an intangible asset, is represented on the Balance Sheet.
  • Wages and salaries are shown on the debit side of the profit and loss account.
  • Returns outwards are shown on the credit side of trading account.
  • Closing stock appearing in the trial balance is a credit/debit entry in trading account.
  • Manufacturing account includes all direct and indirect expenses.
  • Manufacturing accounts are prepared by manufacturing organisations, The manufacturing accounts are prepared by manufacturing organizations.
  • A long-term liability on the balance sheet is Bank Loan.
  • Adjustments in final accounts are used to correct any errors and reflect financial position/ enhance tax liabilities.
  • The Trading Account calculates the cost of goods sold.
  • Cost of goods sold is a key component of the Trading Account, which includes related direct selling expenses.
  • Recording a sale on credit is an example of an adjusting entry.
  • Accruals refer to revenues earned but not yet received, or expenses paid in advance.

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Description

Test your knowledge on the fundamentals of accounting with this quiz, covering topics such as purchase and sales books, debit and credit notes, and the treatment of trade discounts. Designed for Level I (K1) and Level II (K2) learners, it assesses your understanding of key accounting principles and practices.

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