Book keeping 2

What is the purpose of debits and credits in bookkeeping?

• To increase complexity and confusion.

• To ensure accuracy and balance in financial records

• To classify accounts into different categories

• To minimise the number of entries required for each transaction

What is the purpose of a T account?

• To track the balance of a specific account.

• To record transactions in chronological order.

• To summarise the financial statements.

• To calculate the net income of a business

What does it mean when the debit side of a T account exceeds the credit side?

• The account has a debit balance.

• The account has a credit balance.

• The account is balanced

• The account is closed.

What is a control account in bookkeeping?

• An account used to control expenses.

• An account used to monitor employee salaries.

• An account used to summarise subsidiary accounts.

• An account used to record capital investments

How are control accounts typically used in bookkeeping?

• To track the balance of a specific asset

• To record revenue and expense transactions.

• To reconcile cash flow statements.

• To detect errors and discrepancies.

What are bad debts in bookkeeping?

• Debts that are unlikely to be collected and are written off as losses.

• Debts that are paid in full and do not require any further action

• Debts that are currently outstanding and will be collected in the future

• Debts that are recorded as income in the financial statements

What is a trial balance in bookkeeping?

• A statement that lists all the accounts and their balances at a specific point in time

• A report that summarises the revenue and expenses for a specific period

• A document that records the daily transactions of a business

• A statement that calculates the net profit or loss of a business

What is the purpose of the cash book in bookkeeping?

• To record all cash inflows and outflows of a business

• To track the balances of all bank accounts of a business

• To record sales and purchases made on credit

• To calculate the net profit or loss of a business

Which financial statement summarises a company's revenues, expenses, and net income or loss for a specific period?

• Balance sheet

• Income statement

• Cash flow statement

• Statement of retained earnings

Which accounting concept states that expenses should be matched with the revenues they generate in the same accounting period?

• Monetary unit concept

• Entity concept

• Going concern concept

• Matching concept