PRINCIPLES OF ACCOUNTS

Accounting is

• recording anything that happens in the business

• recording the business transactions

• recording, analyzing and interpreting the business transactions

• recording, summarizing, analyzing and interpreting the business transactions

The recording of transactions in the accounting books of a business is called :

• accounting

• book-keeping

• liabilities

• resources

The purposes of preparing accounting documents and financial statements are to:

I. show information of the resources of the business

II. show who has claims on the business resources

III. help users of financial information make decisions about the business

• I and II

• I and III

• II and III

• I, II and III

All businesses are started with the aim of making ...

• Capital

• sound investments on the stock market

• A profit

• their owners popular

Which list represents both internal and external users of accounting information?

• Banks, government and investors

• Creditors, government and managers

• Creditors, banks and investors

• Suppliers, investors and banks

Which accounting user is correctly matched with its needs?

• Banker - to determine taxes to charge the business

• Government - to find out if the business can repay a loan

• Supplier - to find out if he should invest capital in the business

• Owner - to determine the profit of the business over the financial period

Why is accounting necessary in an organization?

• It is required by law

• To help the government

• To report on financial data

• To have enough employees

Which of the following stages of the accounting cycle is correct?

• Journalising, posting to the ledger, trial balance, financial statement

• Posting to the ledger, journalising, trial balance, financial statement

• Posting to the ledger, trial balance, financial statement, journalising

• Trial balance, financial statement, posting to the ledger, journalising

Which of these are books of original entry?

• sales day book

• purchases day book

• petty cash book

• all of the above

When goods are returned by the purchaser to the supplier, the supplier will issue a/an

• invoice

• credit note

• receipt

• cheque