LEVEL 1: ACCOUNTING - I PRELIMINARY EXAMS PAPER 2020-21

Transaction is best described as:

• Purchase & Sale

• Receipts & Payments

• Economic affairs of business

• Recording of data

The following account has normally credit balance:

• Sales discount

• Purchases returns & allowance

• Sales Supplies

• Sales Equipment

Invoice means:

• Detail of sale for a transaction

• Detail of sale in a day

• Cash receipt against sale

• Credit Sale

The discount at the time of payment against purchase of merchandise on credit is called:

• Trade discount

• Cash discount

• Sales discount

• Payment discount

Schedule of Accounts Receivable contains:

• Cash sales

• Cash sales

• Customers’ balances

• Suppliers’ balances

The following account in a ledger is a result of misconception:

• Motor Vehicle

• Allowance for depreciation-Land

• Income Summary A/c

• Merchandise Inventory

Posting from special journal to subsidiary ledger is necessary:

• for each record

• at month’s end

• at the end of calendar year

• at the end of financial year

The adjustment affects expense and liability accounts is:

• Prepaid Expenses

• Accrued Expense

• Accrued Income

• Depreciation

The accounts “Notes receivable” and “Notes Payable” represents:

• Customers & Suppliers

• Promissory Notes

• Credit Notes

• Currency Notes

The most suitable book for recording payments of items like stationary, postage and food for lunch is:

• Cash book

• Petty cash book

• General Journal

• Subsidiary ledger