Business Concepts Quiz FA1

Why is a business being considered as “separate from its owners”? This is due to:

• a business owner’s private income and expenses, assets and liabilities are recorded in the business’s accounting system

• the profit of the business being not clearly stated

• a business owner’s private income and expenses, assets and liabilities are not being recorded in the business’s books

• it being a general concept applied by business.

A trade receivable is a person:

• owing money to the business in return for goods supplied

• to whom the business owes money in return for goods supplied

• to whom the business owes money which was lent to finance the trading operations of the business.

• who has purchased goods from the business

What is Trade Discount?

• A reduction from Net Sales Price to encourage Repeat Purchases

• A reduction from cost of goods bought or sold to encourage bulk-purchasing

• A reduction from Net Sales Price to encourage Quick payment

• A reduction in price after including Sales Tax

What is a Settlement Discount Received?

• A reduction in total payables to encourage repeat purchase

• A reduction from gross sales to encourage quick receipt

• A reduction in total payables to encourage quick payment

• A reduction in gross sales to encourage bulk-purchasing

Which of the following best describes Sales Tax?

• A tax on business profits

• A tax levied on the sale of goods and services which is administered and collected by HM Revenue and Customs

• A tax levied on the sale of goods and services which is administered by HM Revenue and Customs

• A tax levied on the sale of goods and services which all businesses must pay.

Which of the following is authorised so that a business can pay an invoice?

• Credit note

• Debit notes

• Remittance advice

• Internal cheque requisition form

Which of the following best describes Accounts Payable?

• Money that the business has invested in assets

• Money that the business has in its bank account

• Money owed to the business by its customers

• Money owed by the business to its suppliers

What is the purpose of a Purchase Order?

• To track inventory levels

• To record the payment made to a supplier

• To confirm the receipt of goods

• To request goods or services from a supplier

What does the term 'Accounts Receivable' refer to?

• Money owed by the business to its suppliers

• Money that the business has in its bank account

• Money that the business has invested in assets

• Money owed to the business by its customers

What is the significance of a Credit Note?

• It is a document that confirms the sale of goods

• It indicates a payment made to a supplier

• It is issued to correct an error on an invoice

• It serves as a request for payment from a customer