Diagnostic Test - Grade 10 - 2nd Term

The __________concept states that businesses should be treated as if they will continue to stay in business.

• going concern
• business entity

The accounting principles that states companies and owners should be account for separately..

• Business entity concept
• Going concern concept

Switching accounting principles every year would violate the

• money measurement principle

• consistency principle

According to the accrual concept of accounting, financial or business transaction is recorded

• when cash is received or paid

• when transaction occurs

• when profit is computed

• when balance sheet is prepared

Duran Ltd estimates the balance of its Provision for Doubtful Debts should be $4000 on 30 June. The current balance of the provision account is $3000. The correct General journal entry is:

• Dr. Income statement $4000

  CR. Provision for Doubtful Debts $4000

• Dr. Income statement $1000

  CR. Provision for Doubtful Debts $1000

• Dr. Provision for Doubtful Debts $1000

  CR. Income statement $1000

The accounting entry for writing off a bad debt is

• Dr Cash

  Cr Irrecoverable debt

• Dr Provision for doubtful debts

  Cr Irrecoverable debt

• Dr Irrecoverable debt

  Cr Trade payables

• Dr Irrecoverable debt

  Cr Trade receivables

Alternative term for trade receivables

• creditor

• debtor

An increase in irrecoverable debts will ....

• increase expenses

• reduce expenses

An increase in irrecoverable debts will ....

• increase trade receivables

• reduce trade receivables

At the time of charging depreciation, ____ account is debited and ____ account is credited.