Unit 32 Quiz practice questions

A customer can earn a cash discount if

• He places a bulk order

• He becomes a regular customer

• He pays the account before the due date

• He refers new customers to the seller

Provision for doubtful debt is in the

• Income statement

• Balance sheet

• Cashflow statement

• Capital account

Bad debt is in the

• Income statement

• Balance sheet

• Cashflow statement

• Capital account

Where would accounts payable appear in the balance sheet?

• Current assets

• Current liabilities

• Non-current assets

• Non-current liabilities

Which account will appear in current assets?

• Accounts payable

• Capital

• Loan

• Accounts receivable

What is the main reason for monitoring accounts receivable?

• To produce financial statements

• To remind customers to pay their invoices

• To comply with legal requirements

• To increase the liquidity of the organization

Which ledger entries record the purchase of computers bought on credit?

• debit creditors, credit equipment

• debit creditors, credit purchases

• debit equipment, credit creditors

• debit purchases, credit creditors

5/15 N30 in an invoice means that

• The invoice should be paid in 30 days

• The goods should be delivered in 30 days

• A discount will be given in 30 days

• There is an early payment discount of 30% on the account

5/15 N30 in an invoice means that

• The invoice should be paid in 15 days

• The goods should be delivered in 30 days

• A discount of 5% will be given in 15 days

• There is an early payment discount of 15% on the account

What is included in a procedure for the use of a debtor's records system?

• Recording of cash sales

• Recording of cash purchases

• Recording of sales invoices

• Recording of purchase invoices