Cash in business

1 What is the accounting element for cash in hand?

• current asset

• non-current asset

• current liability

• non-current liability

2 What is the nature of cash at bank?

• Dr - Cr -

• Dr - Cr +

• Dr + Cr +

• Dr + Cr -

3 Which of the following transaction will increase cash in hand?

• Sold goods to Jon Ltd for $450 on credit

• Purchases goods $450 from Peter Trading on credit

• Received cash $450 from customer for goods sold

• Paid cheque $450 to supplier

4 Which of the following transaction will decrease cash at bank account?

• received cheque $900 from trade receivable Kong

• issued cheque $900 for purchase of goods

• sold goods $900 on credit to Lai Trading

• purchased goods $900 on credit from Giant Mart

5 What is the journal entry for :

June 29 Sold goods on credit to Tan Ltd for $700.

• Journal

  
  

  Dr Sales revenue 700

  Cr Trade receivable Tan Ltd 700

• Journal

  
  

  Dr Trade payable Tan Ltd 700

  Cr Sales revenue 700

• Journal

  
  

  Dr Trade receivable Tan Ltd 700

  Cr Sales revenue 700

• Journal

  
  

  Dr Trade receivable Tan Ltd 700

  Cr Inventory 700

6 What is a dishonoured cheque?

• cheque that is lost in the mail

• cheque that is rejected by the bank due to missing information on the cheque

• cheque that is written to the wrong person

• cheque that is stolen from the bank

7 What is the purpose of a trade discount?

• to encourage customers to pay on time

• to encourage customers to buy in bulk

• to encourage customers to buy during sale periods

• to encourage customers to make payment quickly

8 What is the purpose of cash discount?

• to encourage customers to buy more goods

• to encourage customers to use cash to pay for goods

• to encourage customers to make payment on time

• to encourage brand loyalty from customers

9 What is the difference between trade discount and cash discount? (tick 2 boxes)

• Cash discount:discount deducted from the amount owing

  Trade discount: discount deducted from the list price of goods

• Cash discount:discount deducted from the list price of goods

  Trade discount: discount deducted from the amount owing

• Cash discount:given at the point of goods bought/sold

  Trade discount: given when payment is made

• Cash discount: given when payment is made

  Trade discount: given at the point of goods bought/sold

10 What is the difference between discount allowed and discount received? (tick 2 boxes)

• discount allowed: income

  discount received:expense

• discount allowed:expense

  discount received:income

• discount allowed: given to trade receivables

  discount received:received from trade payables

• discount allowed: given to trade payables

  discount received:received from trade receivables