Chapter 8 - Purchase & Sales Returns - ACC3/4

What is the primary purpose of an accounting system?

• To generate financial information based on business documents

• To reduce business costs

• To increase sales

• To improve customer service

What must businesses do with their business documents?

• Dispose of them after use

• Retain copies for a permanent record

• Retain copies only if they are sales invoices

• Modify them regularly

Which of the following is NOT typically included in a tax invoice?

• The business’s ABN

• A description of goods or services provided

• The purchaser’s bank account details

• The GST-inclusive price

What type of document provides evidence of a cash inflow?

• Sales invoice

• Cash receipt

• Order form

• Delivery docket

What information is usually included in an EFTPOS receipt?

• The name of the bank used by the business

• The business’s annual turnover

• The supplier’s address

• The employee’s name who handled the transaction

What is a key feature of a perpetual inventory system?

• Inventory records are updated only at the end of the year

• Inventory records are updated continuously throughout the reporting period

• Inventory records are updated monthly

• Inventory records are updated quarterly

Which of the following is an advantage of the perpetual inventory system?

• Reduces the need for physical stocktakes

• Guarantees profit for the business

• Eliminates all inventory losses

• Provides up-to-date information throughout the reporting period

What type of document is used to summarise the transactions involving a credit customer over a given period?

• Order form

• Cash receipt

• Statement of account

• Delivery docket

How are inventory losses typically discovered?

• Through customer complaints

• Completing a physical stocktake

• By increasing sales prices

• By reducing purchase orders

What is the main disadvantage of a manual inventory coding system?

• It is too expensive to implement

• It is only suitable for businesses with high daily sales

• It may not be practical for businesses with a high volume of daily sales

• It requires extensive training for staff