Business Transactions Quiz

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 the formula to calculate Cash Discounts?

What happens when the business pays within the required settlement period?

What is the net amount after deducting trade discount?

What is the impact of IFRS 15 on accounting for prompt payment discounts?

What is the sales tax rate for most goods and services in the UK?

• 5%

• 20%

• 0%

What is Input Tax?

• Sales tax collected from customers

• Sales tax paid when purchasing goods

What should a business do if it collects more output tax than it has paid in input tax?

How is net sales tax calculated?