Podcast
Questions and Answers
What is the purpose of source documents in accounting?
What is the purpose of source documents in accounting?
- Record customer feedback
- Monitor marketing expenses
- Keep information and records for sales and accounting (correct)
- Track employee attendance
In double-entry accounting, if a business sells an item for £10, what is the correct action for recording this transaction?
In double-entry accounting, if a business sells an item for £10, what is the correct action for recording this transaction?
- Credit the business cashbook by £10 and debit the business sales book by £10
- Debit the business cashbook by £10 and credit the business sales book by £10 (correct)
- Credit the business cashbook by £10 and credit the business sales book by £10
- Debit the business cashbook by £10 and debit the business sales book by £10
What is the formula to calculate Gross Profit in accounting?
What is the formula to calculate Gross Profit in accounting?
- Cost of Sales - Income
- Gross Profit x Overheads
- Net Profit + Overheads
- Income - Cost of Sales (correct)
Which of the following is considered an asset on a balance sheet?
Which of the following is considered an asset on a balance sheet?
What is the purpose of a Trial Balance in the accounting cycle?
What is the purpose of a Trial Balance in the accounting cycle?
What represents liabilities on a balance sheet?
What represents liabilities on a balance sheet?
What does the Asset turnover ratio measure?
What does the Asset turnover ratio measure?
How is Stock turnover calculated when only one stock is available?
How is Stock turnover calculated when only one stock is available?
What does the Debtors' collection period measure?
What does the Debtors' collection period measure?
What is the main purpose of the Income statements?
What is the main purpose of the Income statements?
What does the Auditors' report primarily focus on?
What does the Auditors' report primarily focus on?
What does the Price/Earning (P/E) ratio compare?
What does the Price/Earning (P/E) ratio compare?
What is the formula for calculating Gross Profit Margin percentage (GPM)?
What is the formula for calculating Gross Profit Margin percentage (GPM)?
In the context of liquidity, what does Working Capital (WC) represent?
In the context of liquidity, what does Working Capital (WC) represent?
What does the Acid test (AT) ratio measure?
What does the Acid test (AT) ratio measure?
How is Return on Capital Employed calculated?
How is Return on Capital Employed calculated?
What does a Current Ratio (CR) of 2:1 indicate?
What does a Current Ratio (CR) of 2:1 indicate?
What is Equity in terms of the accounting equation?
What is Equity in terms of the accounting equation?
What is the formula for calculating contribution?
What is the formula for calculating contribution?
At the break-even point, a business:
At the break-even point, a business:
What is the purpose of budgeting mentioned in the text?
What is the purpose of budgeting mentioned in the text?
What is a favorable variance in budgeting?
What is a favorable variance in budgeting?
In capital investment methods, what does the payback method calculate?
In capital investment methods, what does the payback method calculate?
Which of the following best describes Net Present Value (NPV) in capital investment methods?
Which of the following best describes Net Present Value (NPV) in capital investment methods?
What is the purpose of the auditors’ report?
What is the purpose of the auditors’ report?
Which term is used for allocating overheads that can be wholly identified with a particular department?
Which term is used for allocating overheads that can be wholly identified with a particular department?
How are overheads shared out between different cost centers in apportionment?
How are overheads shared out between different cost centers in apportionment?
What does the absorption rate help determine in cost centers?
What does the absorption rate help determine in cost centers?
What does break-even analysis calculate?
What does break-even analysis calculate?
In what way does management accounting help businesses?
In what way does management accounting help businesses?
