REVISION SET 3

Which answer choice shows the correct basic sequence in the accounting process?

• Transactions, journal entries, ledger accounts, Trial Balance.

• Transactions, ledger accounts, journal entries, Trial Balance.

• Transactions, journal entries, Trial Balance, ledger accounts.

• Transactions, ledger accounts, Trial Balance, journal entries.

What is the accounting concept related to ‘source documents’?

• Historical Cost.

• Objectivity.

• Consistency.

• Revenue Recognition.

Which answer choice is related to Credit Notes issuance?

• Sales ledger.

• Sales Journal.

• General Journal.

• Purchase Journal.

Which transaction will be recorded in the special journal?

• Drawings of goods.

• Sales of assets on credit.

• Purchase of assets on credit.

• Sales of goods on credit.

Which of the following errors will not affects the Trial Balance?

• Error of balancing

• Error of principle

• Error of casting

• Error of carrying forward

Which is NOT TRUE about Cash Basis Accounting?

• Records only transactions involving cash.

• Revenues are recognized when cash is received.

• Expenses are recognized when cash is paid.

• Revenue recognition and expense recognition concepts are complied.

Which of these would likely require adjusting entries?

• Expiration of prepaid insurance.

• Usage of office supplies.

• The accrual of unpaid expenses.

• All of these would require adjusting entries.

Prepaid Insurance will be shown in which statement?

• Statement of Comprehensive Income.

• Statement of Financial Position.

• Statement of Changes in Equity.

• Statement of Cash Flows.

What is the normal balance of Cashbook?

• Credit balance.

• Debit balance.

• Bank overdraft.

• Adjusted balance.

What is the Bank Statement?

• A list of assets, liabilities and equities.

• A system which recording financial transactions.

• A document that contains all the incoming and outgoing transactions; prepared by the company/depositor.

• A document that contains all the incoming and outgoing transactions; prepared by the bank.