QUIZ 3-AA015 (CHAP 3,5,6&7)

Which of the following source documents should be issued by the seller upon the return of defected goods by the customer?

• Debit note.

• Receipt.

• Credit note.

• Invoice.

The first step in the recording process is to: -

• prepare Financial Statements.

• analyse each transaction for its effect on the accounts.

• post to a journal.

• prepare a Trial Balance.

Which of the following statements is incorrect regarding Purchases Journal?

• It shows the subsidiary of Accounts Payable.

• It provides the account balance.

• Each entry should begin with transaction date.

• It shows the total of purchases at the end period.

Which of the following statements is incorrect?

• Purchase discounts is a cash discount claimed by buyer for prompt payment.

• Purchase returns is a document that supports each credit purchase.

• Sales invoice is a document that supports each credit sales.

• FOB shipping point is freight terms indicating that the seller places goods free on board the carrier, and the buyer pays the freight costs.

The steps in preparing a Trial Balance include all of the following; except

• listing the account titles and their balances.

• totalling the debit and credit columns.

• proving the equality of two columns.

• transferring journal amounts to ledger accounts.

Under the accrual basis of accounting; revenues are reported in the accounting period when the

• cash received from the customer.

• end of the month or year.

• expenses are greater than revenues.

• service or goods have been delivered.

Purchases of machinery are classified as

• revenue expenditures.

• recurring expenditures.

• capital expenditures.

• short-term expenditures.

Which is the correct adjustment entry to record depreciation expense at the end of the accounting period?

• DEBIT to depreciation expense, CREDIT to cash

• DEBIT to accumulated depreciation, CREDIT to expense depreciation

• DEBIT to depreciation expense, CREDIT to accumulated depreciation

• DEBIT to accumulated depreciation, CREDIT to cash

Accrued expenses are a

• non-current liability.

• current liability.

• non-current asset.

• current asset.

What type of accounts are Accumulated Depreciation?

• Expenses.

• Revenues.

• Contra Assets.

• Contra Liabilities.