Accounting 7707-Practice Mcqs-1 29th June 2020

The prime function of accounting is to:

• Record economic data

• Provide the information basis for action

• classifying and recording business transactions

• summarizing the data

which one of the following statement is correct?

• To record an increase in any given asset account, that account must be debited

• To record a decrease in capital, the capital account must be credited

• To record an increase in any given liability account, that account must be credited

• To record a decrease in any given liability account, that account must be credited.

which book of prime entry is part of the double entry system?

• Cashbook

• General Journal

• Purchases Journal

• Sales Journal

Customer's personal accounts are found in:

• Private ledger

• General Ledger

• Purchases Ledger

• Sales Ledger

Bank overdraft means:

• a firm wasting its money

• having more receipts than payments

• a firm having paid more out of its bank account than it has put in it

• a firm having brought too many goods

Cash discount is allowed to customer by the business to encourage:

• Cash payments

• Bulk buying

• Prompt payments

• payments on due dates

Which document is used to record the goods sold on credit?

• Debit note

• Purchase invoice

• Sales invoice

• Customer's Statement

Which of the following is Return Inwards?

• Office fixtures returned

• Goods returned by customers

• Goods taken by customers

• Sale of goods to customers

Why does a business prepare a Trial Balance?

• To Calculate the profit and loss

• To show the financial position

• To check arithmetical accuracy of the ledger

• To check the cash and bank balances

Definition of Trial Balance is as follows:

• A ledger account

• A list of account with balances

• A statement of specific accounts

• a self balancing account