Podcast
Questions and Answers
What is the purpose of a ledger account?
What is the purpose of a ledger account?
- To prepare tax returns
- To produce a trial balance (correct)
- To record transactions using single-entry bookkeeping
- To create a balance sheet
What does a ledger account identify during an accounting period?
What does a ledger account identify during an accounting period?
- Increases only
- Both increases and decreases (correct)
- Decreases only
- No changes
What is the purpose of double-entry bookkeeping in recording transactions?
What is the purpose of double-entry bookkeeping in recording transactions?
- To reflect the duality concept that each transaction affects at least two ledger accounts (correct)
- To avoid recording transactions in the ledger accounts
- To ensure that every transaction affects only one ledger account
- To eliminate the need for trial balances
What do the left-hand side and right-hand side represent in a T-account?
What do the left-hand side and right-hand side represent in a T-account?
Where are an entity's financial statements generated from?
Where are an entity's financial statements generated from?
What does a trial balance help in producing?
What does a trial balance help in producing?
When does an entry in the debit side of a ledger account typically occur?
When does an entry in the debit side of a ledger account typically occur?
What type of transaction is considered a cash transaction based on the text?
What type of transaction is considered a cash transaction based on the text?
Which ledger account is used to account for cash that an entity is owed by customers?
Which ledger account is used to account for cash that an entity is owed by customers?
What is the entry in the cash at bank ledger account when cash is paid out?
What is the entry in the cash at bank ledger account when cash is paid out?
Why do transactions that pass through the bank account need to be included in the general ledger?
Why do transactions that pass through the bank account need to be included in the general ledger?
What type of transactions are petty cash funds typically used for?
What type of transactions are petty cash funds typically used for?
How are cash receipts and payments recorded in the petty cash ledger account?
How are cash receipts and payments recorded in the petty cash ledger account?
'Cash transactions' traditionally involve which type of processing method?
'Cash transactions' traditionally involve which type of processing method?
'Credit sales and purchases' differ from 'cash transactions' primarily in terms of:
'Credit sales and purchases' differ from 'cash transactions' primarily in terms of:
'Direct debit payments,' 'direct receipts from customers,' and 'bank interest received or charged' require adjustments to which account?
'Direct debit payments,' 'direct receipts from customers,' and 'bank interest received or charged' require adjustments to which account?
What happens if a customer does not pay early and is no longer entitled to the discount?
What happens if a customer does not pay early and is no longer entitled to the discount?
What is the primary impact of a settlement discount taken by an entity paying a supplier?
What is the primary impact of a settlement discount taken by an entity paying a supplier?
When must an entity typically register for sales tax?
When must an entity typically register for sales tax?
What does output tax refer to in the context of sales tax?
What does output tax refer to in the context of sales tax?
In which financial statement are trade receivables typically presented?
In which financial statement are trade receivables typically presented?
What is the primary impact of being a tax-registered entity for sales tax purposes?
What is the primary impact of being a tax-registered entity for sales tax purposes?
What does it mean when an entity engages in 'zero-rated' transactions?
What does it mean when an entity engages in 'zero-rated' transactions?
What is the purpose of offsetting sales tax collected against sales tax suffered on purchases?
What is the purpose of offsetting sales tax collected against sales tax suffered on purchases?
When do entities need to charge tax on their sales?
When do entities need to charge tax on their sales?
What is the significance of 'gross amount receivable' and 'gross amount payable' in an entity's financial position statement?
What is the significance of 'gross amount receivable' and 'gross amount payable' in an entity's financial position statement?
What is the purpose of a petty cash float?
What is the purpose of a petty cash float?
What does the 'imprest method' refer to in accounting?
What does the 'imprest method' refer to in accounting?
What is the purpose of a trade discount?
What is the purpose of a trade discount?
How is a settlement discount different from a trade discount?
How is a settlement discount different from a trade discount?
What does a settlement discount of '4/14, net 30' mean?
What does a settlement discount of '4/14, net 30' mean?
How does the 'imprest method' ensure control over petty cash?
How does the 'imprest method' ensure control over petty cash?
Why do sellers offer trade discounts to customers according to the text?
Why do sellers offer trade discounts to customers according to the text?
When should a customer pay the full invoice amount according to settlement discount terms?
When should a customer pay the full invoice amount according to settlement discount terms?
'Variable consideration' in accounting refers to what uncertainty?
'Variable consideration' in accounting refers to what uncertainty?
