WorksheetsYear 12 accounting week 1
Total questions: 80
Worksheet time: 48mins
How would a $100 000 loan, due in 2030, with annual instalments of $15 000 be categorised in the Balance Sheet?
$100 000 as a non-current liability
$100 000 as a non-current liability
$15 000 as a current liability and $85 000 as a non-current liability
$85 000 as a current liability and $15 000 as a non-current liability
A resource controlled / owned by a business that will generate economic benefit within 12 months is categorised as what?
Owner's equity
Revenue
Non-current asset
Current asset
Calculate the Owner's Equity for this equation: Assets = $70 000, Liabilities = $25 000.
$95 000
$45 000
$50 000
$0
Money earned by a business from completing a sale is which of the following accounting elements?
Asset
Revenue
Owner's equity
Liability
Accounting Assumptions are
the generally accepted way of doing things as an accountant
the technical definitions, rules and procedures for reporting transactions worldwide
the suggested ways an accountant may do things
different in every country
How many Accounting Assumptions are there in the accounting system
3
2
4
1
Accounting Assumptions describe the generally agreed principles that underpin the preparation of financial reports
False
True
The assumption that states the records of assets, liabilities, and business activities of the entity are kept completely separate from the owner as well as from other entities is the
going concern assumption
accrual basis assumption
entity assumption
period assumption
The Accounting Entity Assumption is important as it helps to
record, report and value assets that have occurred and will have an effect in the future
work out whose financial information is being assessed
determine which transactions are included or excluded
define the period of time for which we are reporting
The Going Concern Assumption is important as it helps to
record, report and value assets that have occured and will have an effect in the future
work out whose financial information is being assessed
determine which transactions are included or excluded
define the period of time for which we are reporting
The Period Assumption is important as it helps to
record, report and value assets that have occured and will have an effect in the future
work out whose financial information is being assessed
determine which transactions are included or excluded
define the period of time for which we are reporting
The Accrual basis Assumption is important as it helps to
record, report and value assets that have occured and will have an effect in the future
work out whose financial information is being assessed
determine which transactions are included or excluded
define the period of time for which we are reporting
The Assumption that revenues are recognised when earned and expenses when incurred so profit is calculated as Revenue earnt less expenses incurred is the
Entity assumption
Period assumption
Accrual basis assumption
Going concern assumption
The Assumption that reports are prepared for a particular period of time, such as a month or a year in order to obtain comparability of results is the
Entity assumption
Period assumption
Accrual basis assumption
Going concern assumption
The Assumptions that the business will continue to operate in the future and its records are kept on that basis is the
Entity assumption
Period assumption
Accrual basis assumption
Going concern assumption
Stage 1 of the Accounting process is
advice
record
report
source documents
Stage 4 of the Accounting process is
source documents
advice
report
record
Stage 2 of the Accounting process is
record
source documents
report
advice
Stage 3 of the Accounting process is
record
source documents
advice
report
Assets=Liabilities-Owner's Equity is the accounting equation
TRUE
FALSE
What type of an account is cash?
ASSET
LIABILITIES
OWNER'S EQUITY
The accounting equation must always be
balanced
uneven
zero
equal to the square root of 5
__________________ is the language of business.
Finance
Business Essentials
Accounting
English
Something of value OWNED by the company is a
Liability
Asset
Owner's Equity
Something of value OWED by a company is called a(n)
Asset
Liability
Owner's Equity
For an investor, personal and business money are put together and not kept separate.
TRUE
FALSE
Who is Luca Pacioli
The Father of Accounting
The Mother of Accounting
Accountant
The Brother of Accounting
Assets = Liabilities + Owner's Equity
Assets - 200,000
Liabilities- ?
Owner's Equity- 90,000
$200,000
$110,000
$290,000
If liabilities equal $400 and owner's equity equals $800, what do the assets equal?
$400
$1,200
$800
Taxes are an asset?
True
False
Assets = Liabilities + Owner's Equity
Assets - ?
Liabilities- 25,000
Owner's Equity- 100,000
$125,000
$25,000
$100,000
Which one from the list below doesn't represent the Accounting equation?
A = OE + L
A - L = OE
A - OE = L
OE = A + L
If Capital is $31,400 and Liabilities are $15,500, how much are Assets?
$46,900
$15,500
$15,900
If Capital is $27,500 and Liabilities are $5,400, how much are Assets?
$32,900
$27,500
$22,100
How do you classify "Cash"?
asset
liability
owner's equity
How do you classify "Capital"?
asset
liability
owner's equity
How do you classify "Accounts Receivable"?
asset
liability
owner's equity
Classify the following:
Sales
Assets
Liabilities
Owner's equity
Revenues
Expenses
Classify the following:
Purchases
Assets
Liabilities
Owner's equity
Revenues
Expenses
Assumption - The business is kept separate from the owner and other entities, and its records should be kept on this basis.
(a)
Characteristic - Financial information reported is of the real world economic event it claims to represent: complete, free from material error and neutral (without bias). This quality aims to ensure that the financial information presented is a true
depiction of the economic events of the business and therefore users can be assured
that they can make informed decisions based on that information without the fear of
being misled.
(a)
Assumption - The records of assets, liabilities and business activities of the entity are kept completely separate from those of the owner of the entity as well as from those of other entities
(a)
Characteristic - Helps to assure users that the information presented faithfully represents
what it claims to exemplify. It ensures that different, knowledgeable and independent
observers can reach the same conclusion that a particular representation of an event
is faithfully represented. Therefore, independent individuals can check the supporting
evidence to show that the financial information is free from bias and provides a Faithful
representation.
(a)
Assumption - Because it recognises elements of the reports when they meet their respective definitions, this assumption will calculate profit by subtracting expenses
incurred from revenue earned in a particular reporting period.
(a)
Characteristic - Financial information must be capable of making a difference to the decisions made by users by helping them to form predictions and/or confirm or change their previous evaluations
(a)
Characteristic - Useful information is provided when the financial reports of a business can be compared over time and compared with similar information of other businesses. This can only occur if the business has been consistent with its Accounting procedures. This enables users to identify similarities and differences in items in the financial reports and be able to investigate the cause.
(a)
Assumption - assumes that the business will continue to operate
in the future, and its records are kept on that basis. The life of the business is assumed to be continuous. This will allow the owner/manager to
see the financial position of the business much more clearly and ensure that there are sufficient short and long-term assets to meet the short and long-term liabilities.
(a)
Characteristic - States that stakeholders must have financial information available in time that is able to impact their decision-making. Generally, the older the information the less useful it is regarding decision-making. Therefore, to make the most informed decision the stakeholder requires the most current financial information.
(a)
Assumption - Reports are prepared for a particular period of time,
such as a month or a year, in order to obtain comparability of results. This assumption is inextricably linked to the idea that the business is a going concern.
Because the life of the business is assumed to be continuous, it is necessary to divide that life into arbitrary periods so that reports can be prepared.
(a)
Characteristic - States that financial information should be comprehended by users
that have a reasonable understanding of business and economic undertakings. To
ensure it is understood it needs to be presented clearly and concisely.
It is important to remember that the most basic function of Accounting reports is to
communicate information to the user. Most business owners are not accountants, and
it is therefore pointless to present reports in a form that they cannot understand.
(a)
What is the Accounting Entity Assumption?
Financial statements cannot show information for any entity.
Records for assets and liabilities are combined in accounting.
Each entity maintains its own accounting records, and financial statements show information for multiple entities.
Records for assets, liabilities, and activities of an entity are not separate from the owner.
Under the Accrual Basis Assumption, when is revenue recognized?
When it's earned and can be measured reliably.
When it's earned, regardless of reliability.
At the end of the accounting period.
When it's received in cash.
What is the primary focus of the Going Concern Assumption?
The entity will continue to operate in the future.
The entity is not concerned with its future operations.
The entity will be wound up soon.
The entity's financial reports are prepared only for shareholders.
What does the Period Assumption in accounting refer to?
Reports are prepared for specific time periods for comparison.
Reports can be prepared at any time, regardless of periods.
There is no need for specific time periods in accounting.
Assets and liabilities are recorded without considering time periods.
According to the Accrual Basis Assumption, when are expenses recognized?
When they are incurred.
When they are paid.
When they are approved by the management.
At the end of the accounting period.
Which accounting assumption assumes that ongoing business activities will continue?
Period Assumption.
Going Concern Assumption.
Accrual Basis Assumption.
Accounting Entity Assumption.
Under the Going Concern Assumption, what is assumed about the entity's future operations?
The entity will stop operating.
The entity will operate with huge profits.
The entity will continue to operate normally.
The entity's future operations are uncertain.
What does the Period Assumption help in determining?
Future benefits of assets.
Profit by matching revenue and expenses during the same period.
The owner's personal expenses.
The market value of assets.
Which accounting assumption states that financial statements show information only for a specific entity?
Accounting Entity Assumption.
Accrual Basis Assumption.
Going Concern Assumption.
Period Assumption.
According to the Accrual Basis Assumption, when is profit calculated?
By subtracting expenses incurred from revenue earned during a specific period.
By adding all expenses to revenue.
By ignoring expenses.
By subtracting all expenses from revenue.
A _________ ________ is the entire set of accounts that a business uses.
trial balance
general ledger
balance sheet
income statement
The left side of the T-account is called the _________ side and the right side is called the ______ side.
credit, debit
debit, credit
asset, liability
income, expense
When the business earns revenue, the ultimate effect of the revenue increase is to increase the ________ __________.
liabilities account
owner's equity
asset value
cash flow
Asset accounts are increased by __________ entries and decreased by ________ entries.
credit, debit
debit, credit
liability, asset
expense, income
Liability accounts are ___________ by credit entries and ___________ by debit entries.
decreased, increased
increased, decreased
balanced, unbalanced
unaffected, affected
The _________ _________ rule states that in the recording of a transaction, the total amount of the debit entries must equal the total amount of the credit entries for the transaction.
single entry
double entry
accounting balance
financial statement
The steps that a business completes during each accounting period to record, retain and report the monetary information are known as the _________ _________.
accounting cycle
financial statement
balance sheet
income summary
Recording to Ledgers is the _____________ step in the accounting cycle.
second
first
third
last
A _________ is a schedule that lists the titles of all the accounts in a business’s general ledger, the debit or credit balance of each account and the totals of the debit and credit balances.
Trial balance
Chart of accounts
Schedule of Accounts Receivable
Subsidiary Ledger
In accounting, what is the primary purpose of a trial balance?
To calculate net income
To ensure that debits equal credits
To prepare financial statements
To record transactions
A Chart of Accounts is
a numbering system for accounts in the ledger
designed to organise a business’s accounts efficiently
used to help reduce errors in the recording
A chart of Accounts is all of these
What is the process of transferring the debit and credit information for each journal entry to the accounts in a business’s general ledger?
Posting
Journalising
Reconciling
Transferring
The balance in the accounts payable control account must always _________ the total of all the accounts in the accounts payable subsidiary ledger.
equal
be greater than
be less than
will never be the same as
When posting to the general ledger, what is recorded in the particulars column?
The name of the accounts on the "other side" of the transaction
The name of the account that the entry is being posted to
The account number of the account being posted to
The amount of the transaction
In this posting example to the Cash at Bank account, what will be recorded in the yellow section of the general ledger?
GST Collected & Sales Revenue
Cash at Bank
GST Collected
Sales Revenue
What will be recorded in the yellow box?
12,895
1,320
10,255
None of these are correct
What will be recorded in the yellow box?
12,745
150
13,045
None of these are correct
What is the balance of this account?
11,575 DR
22,000 DR
10,425 CR
10,425 DR
When posting the credit to the Sales Revenue account, what will be recorded as the "other side" of the transaction in the particulars column?
Cash at Bank
Cash at Bank & GST Sollected
Sales Revenue
Sales Revenue and GST Collected
When posting the credit to GST Collected account, what will be recorded as the "other side" of the transaction in the particulars column?
Cash at Bank
Cash at Bank & GST Collected
Cash at Bank and Sales Revenue
Sales Revenue and GST Collected
