SADDLE: LO3 BE ABLE TO CARRY OUT FINANCIAL RECORD KEEPING D1

What are the generally accepted accounting principles in the UK?

• A. A collection of commonly followed accounting rules and standards for financial reporting

• B. A set of legal regulations and accounting standards that dictate best practices in constructing business accounts

• C. A regulatory body that provides guidance for UK businesses when preparing financial reports and accounts

• D. A mandatory requirement for businesses to prepare a balance sheet and profit and loss statement

Why is it essential to record income and expenditure as soon as possible?

• A. To keep track of all money coming into and leaving the business

• B. To avoid forgetting or losing track of vital documents

• C. To ensure accuracy in financial records

• D. All of the above

What should business records do in relation to income and expenditure?

• A. Keep income and expenditure separate

• B. Organize transactions under headings that make sense to the business

• C. Cross-refer to original documents

• D. All of the above

What information should be recorded for each transaction?

• A. Date, name of supplier/customer, and transaction details

• B. Date, invoice number, and transaction details

• C. Date, amount paid or charged, and VAT details

• D. Date, income or expenditure category, and total amount

What is the purpose of a cashbook in the single entry system?

• A. To record all credits and debits

• B. To complete a check and bank reconciliation

• C. To analyze income and expenditure

• D. All of the above

What are credits in the cashbook?

• A. Income or receipts

• B. Expenditures or expenses

• C. VAT charged on goods

• D. Total income including VAT

What are debits in the cashbook?

• A. Income or receipts

• B. Expenditures or expenses

• C. VAT paid on goods

• D. Total income including VAT

What is the purpose of reconciliation in financial record keeping?

• A. To ensure the accuracy of the cashbook

• B. To check for errors or omissions

• C. To compare records with the bank statement

• D. All of the above

What should be done if the bank column totals do not match in the cashbook?

• A. Check the entries individually for possible mistakes

• B. Carry down the current month's income and add it to the opening balance

• C. Carry down the current month's total expenses and deduct it from the receipts + opening balance

• D. Carry forward the balance to the next month as the opening balance

What is the purpose of bank reconciliation?

• A. To double-check records and spot errors or omissions

• B. To check for uncleared cheques/transfers/payments

• C. To ensure the bank has recorded transactions correctly

• D. All of the above