POA Sec 3 Chap 2 Quiz
This deck covers key concepts and questions from Principles of Accounts, focusing on business transactions, accounting concepts, and the use of various financial documents.
When a customer pays the supplier in cash, the supplier will issue the customer a document called a _____
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| Term | Definition |
|---|---|
When a customer pays the supplier in cash, the supplier will issue the customer a document called a _____ | receipt |
An activity carried out by a business to provide goods and services in exchange for money is known as _____ | business transaction |
Only business activities that can be measured in dollars and cents are recorded. This is in accordance with the ___________ concept | monetary |
Personal financial activities of the owner of a business are not recorded in the books of the business. This complies with the _______ concept | accounting entity |
Fat Cat Food Supplies delivered cat food to Happy Pet Shop but did not receive payment from Happy Pet Shop till the following month. This is known as a ______ transaction | credit |
Magic Paws Pet Shop paid Fat Cat Food Supplies immediately for the cat food purchase. This is known as a _______ transaction | cash |
When a supplier sells goods on credit, the supplier will issue the customer a document called an ______ | invoice |
A supplier who has undercharged a customer will issue a document known as a | debit note |
The business will receive from the bank a ______ which states the deposits and withdrawals made to and from the business bank account | bank statement |
Transactions are recorded based on reliable and verifiable information. This is in accordance with the _____ concept | objectivity |
Transactions should be recorded in the accounts at their original cost shown in the source documents. This practice complies with the _______ concept | historical cost |
Explain the purpose of source documents? | Used to capture information on a business transaction |
What is the purpose of a Bank statement | State the deposits into and withdrawals from the business bank account |
What is the purpose of a credit note? | States the amount to be reduced from the invoice that was issued earlier |
What is the purpose of a debit note? | States the amount to be added on to the invoice that was issued earlier |
What is the purpose of an invoice? | States the amount the buyer owes the seller |
What is the purpose of a payment voucher? | An internal document for the business to track payments made |
What is the purpose of a receipt? | Acts as evidence that the business has made |
Raja Money Changer purchased a multi currency counting machine on credit. Identify the journal in which the transaction should be recorded? Cash book Purchase journal General journal Purchase returns journal | General Journal |
Loo's Sanitary sold $750 worth of taps to SAC Inc on credit. Identify the Special Journal in which Loo's Sanitary would record the transaction in Purchase journal Sales journal Purchase returns journal Sales returns journal | Sales Journal |
Which of the following source document is used to record transactions in the Cash Book? Payment voucher Debit note Credit note Sales invoice | Payment voucher |
Hamidah Cashmeres returned scarves worth S1000 that were purchased on credit from Yuki Silk Manufacturing. Identify the source document Hamidah Cashmeres would receive from Yuki Silk Manufacturing and the journal Hamidah Cashmeres should record the transcations in Credit note; Purchase Returns Journal Credit note; Sales Returns Journal Debit note; Purchase Returns Journal Debit note; Sales Returns Journal | Credit note; Purchase Returns Journal |
Hamidah Cashmeres returned scarves worth S1000 that were purchased on credit from Yuki Silk Manufacturing. Identify the source document Yuki Silk Manufacturing issued and the journal it should record the transactions in Credit note; Purchase Returns Journal Credit note; Sales Returns Journal Debit note; Purchase Returns Journal Debit note; Sales Returns Journal | Credit note; Sales Returns Journal |
Explain the purpose of a General Journal? | To record transactions that are not recorded in the Special Journals and Cash Book |
Explain why narration should be provided in the General Journal | Helps in recalling the background of each transaction |
A business which prepares the financial statements every half is following the _ concept | accounting period |
Name the Subsidiary Ledgers, Explain the purpose if using Subsidiary ledgers | Sales ledgers Purchase Ledgers prevents the cluttering of the general ledger and reduces the size of the general ledger |
The _ concept assumes that the business has an indefinite economic life. | going concern |
Accounting transactions are processed regularly in a systematic order known as the | accounting cycle |