Accounting Test 2

What is the purpose of the Book of Original Entry?

• To record financial statements

• To record all transactions before they are posted to the ledger

• To prepare tax returns

• To classify all accounts

Which of the following is a Book of Original Entry?

• General Ledger

• Cashbook

• Income Statement

• Trial Balance

The Purchase Book records:

• Cash transactions only

• Credit purchases of goods and services

• Sales of goods and services

• Payments made to creditors

The purpose of the Cashbook is to:

• Record all non-cash transactions

• Record transactions involving cash receipts and payments

• Record only sales

• Only track bank balances

What is recorded in the Sales Book?

• Cash sales

• Credit sales of goods

• Payments received

• Purchases made

Which of the following is the first step in the accounting cycle?

• Preparing the financial statements

• Posting to the ledger

• Collecting source documents

• Preparing the trial balance

The General Journal is used to record:

• Only cash transactions

• Only sales transactions

• All types of transactions that do not go into other books of entry

• Only payments to suppliers

What is the purpose of the Ledger in accounting?

• To record source documents

• To group similar transactions into accounts

• To record trial balance

• To prepare the income statement

What does a Trial Balance ensure?

• Accuracy of financial statements

• Accuracy of postings in the ledger

• Correctness of inventory balances

• Accuracy of the opening balance

Which of the following is a financial statement?

• Cashbook

• Sales Journal

• Income Statement

• General Ledger