Basic Accounting Concepts

The Sale of goods on credit would be recorded as

• Dr. Creditor A/c

  Cr. Sales A/c

• Dr. Debtor A/c

  Cr. Sales A/c

• Dr. Goods A/c

  Cr. Creditor A/c

• Dr. Goods A/c

  Cr. Debtor A/c

Which of the following groups represents Current Assets?

• Stock,

  Debtors

  Creditors

• Debtors

  Prepaid Expenses

  Cash

• Bank Overdraft

  Cash

  Stock

• Bank

  Cash

  Creditors

The withdrawal of goods for personal use affects which account(s)?

i. Drawings

ii. Cash

iii. Purchases

iv. Stock

• i and ii

• i, ii, iv

• i, iii

• All of the above

Answer explanation

Any withdrawal made by the owner for personal use is known as Drawings

Any Decrease in Stock affects the Purchases Account

The withdrawal of goods for personal use affects which account(s)?

i. Drawings

ii. Cash

iii. Purchases

iv. Stock

• i and ii

• i, ii, iv

• i, iii

• All of the above

Answer explanation

Any withdrawal made by the owner for personal use is known as Drawings

Any Decrease in Stock affects the Purchases Account

Mr. Jones purchased goods on credit from our business, A.J. Limited.

Mr. Jones is a:

• Supplier

• Owner

• Debtor

• Creditor

The withdrawal of cash for personal use should be recorded as:

• Dr. Drawings

  Cr. Cash

• Dr. Cash

  Cr. Drawings

• Dr. Withdrawals

  Cr. Cash

• Dr. Cash

  Cr. withdrawals

Furniture- $10,000

Cash- $4,000

Bank Overdraft- $1,300

Debtors- $2,000

Bank- $500

What is the value of Current Assets?

• $16,500

• $6,500

• $17,500

• $16,000

Answer explanation

Current Assets refers to those assets that can be converted to cash quickly and easily..

Discount Received is classified as:

• Asset

• Liability

• Revenue

• Expense

All of the following are liabilities EXCEPT:

• Creditors

• Bank Overdraft

• Accrued Expenses

• Prepaid Expenses

Answer explanation

Which of the following Assets are the most liquid?

• Land

• Bank

• Debtors

• Building

Answer explanation