Accounts QUIZ -1

The amount mentioned in the discount column on the debit side of a cashbook represents:

• Trade discount allowed or discount expense

• Cash discount allowed or discount expense

• Trade discount received or discount income

• Cash discount received or discount income

A cheque is received from a creditor and paid into the bank on the same day. How will this transaction be recorded in the cashbook?

• It will be recorded in the cash column of the cashbook

• It will be recorded both in the cash and bank column of the cashbook

• It will be recorded in the bank column of the cashbook

• None of the above

Which of the following statements about a cashbook is not true?

• It is a journalised ledger

• It is a double purpose book

• It is a dual book

• It records liabilities

Which one of the following transactions will be recorded in the cashbook as a contra entry?

• Cash is withdrawn from the bank for office use

• Cash is deposited in a company's bank account

• A cheque that was received earlier is deposited into the company's bank account

• All of the above

Another name for the debit side of a cashbook is ________:

• Receipts side

• Income side

• Expense side

• Payment side

In a cashbook, a contra entry is recorded on the __________:

• Debit and credit side of a cashbook

• Debit side of a cashbook

• Credit side of a cashbook

• Not recorded in the cashbook

Which action does not reduce the owner's capital?

• A business expenses paid using a personal cheque

• B cash withdrawn from the business bank account for personal use

• C goods taken from inventory for personal use

• D personal expenses paid using business cash

Which statements correctly describes the accounting equation?

• A capital = assets - liabilities

• B capital = assets + liabilities

• C capital = current assets - current liabilities

• D capital = current assets + current liabilities

The capital of a business is higher at the end of year 2 than it was at the end of year 1. No additional capital has been introduced during year 2. What does this mean?

• A The business has made a loss.

• B The business has made a profit.

• C The business has sold some non-current assets.

• D The business has taken a long-term loan.

Toby's purchases for the year were $13 000. His closing inventory was $1000 more than his opening inventory. Toby's gross margin is 20%. What was Toby's revenue for the year?

• A $14 400

• B $15 000

• C $16 800

• D $17 500