Basic Accounting Quiz

The owner of a business takes inventory for her own use. What are the ledger account entries to record this?

• debit drawings, credit purchases

• debit drawings, credit inventory

• debit capital, credit sales

• debit inventory, credit drawings

A supplier's account in a customer's books, has a credit balance of 8000. What does this mean?

• the customer owes the supplier $8000

• the customer has paid the supplier $8000

• the supplier has paid $8000

• the supplier owes $8000

A sole trader takes cash and also goods for his own use from his business. Which of these will affect his capital?

• the cash only

• the goods only

• both the cash and the goods

• neither the cash nor the goods

a trader takes goods that have selling price $200 from his shop for his own use. The cost price of these goods is $150. How is this transaction recorded?

• Dr. drawings $200; Cr purchases $200

• Dr. purchases $200; Cr drawings $200

• Dr. drawings $150; Cr purchases $150

• Dr. purchases $150; Cr drawings $150

Brown charged Jones for carriage on goods delivered to Jones' premises. What entries will Brown makes his ledger?

• Dr. carriage inwards; Cr. Jones

• Dr. carriage outwards; Cr. Jones

• Dr. Jones; Cr. carriage inwards

• Dr. Jones; Cr. carriage outwards

Which entry records a cheque paid to a supplier for goods bought on credit?

• Dr. Bank;

  Cr. Trade payable

• Dr. Bank;

  Cr. purchases

• Dr. trade payable;

  Cr. bank

• Dr. purchases ;

  Cr. bank

Which statement is correct?

• An asset is always a credit entry

• An expense is always a credit entry

• An expense is always a debit entry

• A liability is always a debit entry

Carl is a customer of Jason. The balance on Carl's account in Jason books is $200 debit. Carl sends Jason a cheque for $50. What is the balance on Carl's account after this transaction?

• $150 credit

• $150 debit

• $250 credit

• $250 debit

Which will be most suitable for a computer application?

• maintaining highly confidential records

• maintaining the payroll for a large company

• recording credit sales for a small retailer

• recording inventory withdrawn by partners

What is the accounting equation?

• assets less liabilities equal capital

• assets plus liabilities equal capital

• capital less liabilities equal assets

• capital plus liabilities equal assets