Accounting Exam Theory

What is a Standing Order?

• A period payment made for an amount not known.

• A statement made to correct the Trial Balance.

• An order to the bank to pay a fixed amount periodically.

• An order to the back to leave out standing amounts.

What is a Credit Transfer?

• A C.T. scan made on our accounts to be sure that we haven't made any errors.

• When we are paid directly into our account.

• When previously credited amounts are transferred to the bank.

• A transfer made to the credit side of our account.

A Direct Debit is when when we are debited directly in our account.

• TRUE

• FALSE

What is a Bank Overdraft?

• When we go bankrupt.

• When the owner takes out more money than they have in their bank account.

• When we are DRAFTED FOR THE MILITARY AS MILITARY ACCOUNTANTS

• When the bank goes bankrupt and we don't get our money back.

A Bank Statement is prepared:

• By the owner to show the bank their transactions

• By the bank so that they know who will be going bankrupt.

• By the accountant to check all bank transactions.

• By the bank and shown to their client their balance.

A Bank Reconciliation Statement is prepared:

• By the bank to fix mistakes in their statement.

• By the business to enter transactions omitted from the bank statement and show the reasons why.

• By the accountant to fix the entire bank statement.

What is a Bank Deposit Account?

• When we deposit money into the bank

• An account holding a certain amount of money for a period of time with interest.

• An account holding a certain amount of money for an unknown period of time without interest.

• An account allowing you to deposit and withdraw money freely.

A Bank Current Account is:

• An account containing all current assets

• A bank account allowing you to withdraw and deposit money freely.

• Where Standing Orders, Credit Transfers and Direct Debits are made.

A Suspense Account is created when:

• When the business is using the Going Concern Concept

• Our Trial Balance doesn't match.

• We don't know what will happen to the business.

• An Account created for holding Debitors and Creditors.

All errors appear in the Trial Balance.

• TRUE

• FALSE