Question 1

Machinery is purchased on credit for $16 000 plus GST.The general journal entry to record this transaction is which of the following?
$ $
DR CR

Accepted Answer

A) Equipment 16 000 Accounts payable 16 000 
B) Equipment 14 545 GST outlays 1 455
Accounts payable 16 000 
C) Equity 16 000 GST outlays 1 600
Accounts payable 17 600 
D) Equipment 16 000 GST outlays 1 600
Accounts payable 17 600 
A) Equipment 16 000 Accounts payable 16 000 
B) Equipment 14 545 GST outlays 1 455
Accounts payable 16 000 
C) Equity 16 000 GST outlays 1 600
Accounts payable 17 600 
D) Equipment 16 000 GST outlays 1 600
Accounts payable 17 600 D

Question 2

A party to whom the entity owes money for goods or services provided to the entity is called a:

Accepted Answer

A) creditor. 
B) debtor. 
C) debit. 
D) credit. 
A) creditor. 
B) debtor. 
C) debit. 
D) credit. A

Question 3

J.Wood performed carpentry services for $7500.He received cash of $5000 with the balance to be received within 28 days.Ignoring GST,the transaction is recorded as which of the following?

Accepted Answer

A) DR Cash $5000; DR Accounts receivable $2500; CR Income earned $7500 
B) DR Income earned $7500; CR Cash $5000; CR Accounts payable $2500 
C) DR Cash $7500; CR Equity $7500 
D) DR Cash $5000; DR Equity $2500; CR Income earned $7500 
A) DR Cash $5000; DR Accounts receivable $2500; CR Income earned $7500 
B) DR Income earned $7500; CR Cash $5000; CR Accounts payable $2500 
C) DR Cash $7500; CR Equity $7500 
D) DR Cash $5000; DR Equity $2500; CR Income earned $7500 A

Question 4

The bookkeeper recorded wages for the month as a debit to the Sales account rather than as a debit to wages expense.This error will result in:

Accepted Answer

A) no effect on profit of the period. 
B) understated liabilities at the end of the period. 
C) understated assets at the end of the period. 
D) overstated profit for the period. 
A) no effect on profit of the period. 
B) understated liabilities at the end of the period. 
C) understated assets at the end of the period. 
D) overstated profit for the period.

Question 5

Happy Harry requires his customers to pay for their orders six weeks before shipping the goods.How should the cash receipts be recorded by Harry?

Accepted Answer

A) Debit bank,credit an asset account 
B) Debit bank,credit an expense account 
C) Debit bank,credit an liability account 
D) Debit bank,credit an income account 
A) Debit bank,credit an asset account 
B) Debit bank,credit an expense account 
C) Debit bank,credit an liability account 
D) Debit bank,credit an income account

Question 6

Select the entry that correctly records the receipt by Speedy Window Cleaning of $900 in cash for window cleaning services provided.Ignore GST.

Accepted Answer

A) DR bank $900; CR income earned $900 
B) DR income earned $900; CR bank $900 
C) DR bank $900; CR debtors $900 
D) DR equity $900; CR income earned $900 
A) DR bank $900; CR income earned $900 
B) DR income earned $900; CR bank $900 
C) DR bank $900; CR debtors $900 
D) DR equity $900; CR income earned $900

Question 7

In accounting ABN stands for:

Accepted Answer

A) Annual Business Number. 
B) Account Balance Number. 
C) Australian Bank Number. 
D) Australian Business Number. 
A) Annual Business Number. 
B) Account Balance Number. 
C) Australian Bank Number. 
D) Australian Business Number.

Question 8

The accounting entry when income is earned on credit is which of the following?

Accepted Answer

A) Debit cash,credit income 
B) Debit accounts receivable,credit income 
C) Debit income,credit accounts payable 
D) Debit accounts payable,credit income 
A) Debit cash,credit income 
B) Debit accounts receivable,credit income 
C) Debit income,credit accounts payable 
D) Debit accounts payable,credit income

Question 9

Which of these errors would be detected by a trial balance?

Accepted Answer

A) A cash sale was recorded in the sales account as $237 instead of $273 but was correctly recorded in the bank account. 
B) Office salaries were recorded as office expenses. 
C) The sales assistant pocketed the cash from a cash sale and did not ring it up on the register. 
D) Purchase of inventory on credit was recorded as a debit to the plant and equipment account and a credit to creditors. 
A) A cash sale was recorded in the sales account as $237 instead of $273 but was correctly recorded in the bank account. 
B) Office salaries were recorded as office expenses. 
C) The sales assistant pocketed the cash from a cash sale and did not ring it up on the register. 
D) Purchase of inventory on credit was recorded as a debit to the plant and equipment account and a credit to creditors.

Question 10

If a sole proprietor who owns an electrical store takes home a DVD player for his own personal use it would be considered to be:

Accepted Answer

A) an expense because an asset has been given away. 
B) an increase in equity and a decrease in assets because the proprietor now owns the DVD player. 
C) a decrease in assets and a decrease in equity because by taking the DVD player the owner has made a drawing from the business. 
D) an increase in assets and an increase in equity. 
A) an expense because an asset has been given away. 
B) an increase in equity and a decrease in assets because the proprietor now owns the DVD player. 
C) a decrease in assets and a decrease in equity because by taking the DVD player the owner has made a drawing from the business. 
D) an increase in assets and an increase in equity.

Question 11

A machine purchased by a business for use in producing income can be recorded in an asset account called:

Accepted Answer

A) drawings. 
B) debtors. 
C) plant and equipment. 
D) buildings. 
A) drawings. 
B) debtors. 
C) plant and equipment. 
D) buildings.

Question 12

A list of ledger accounts and their balances is called a:

Accepted Answer

A) chart of accounts. 
B) listing. 
C) general ledger. 
D) trial balance. 
A) chart of accounts. 
B) listing. 
C) general ledger. 
D) trial balance.

Question 13

In order to provide timely information for decision-making the life of the business is divided into arbitrary time periods of equal length called:

Accepted Answer

A) business cycles. 
B) accounting periods. 
C) time periods. 
D) operating cycles. 
A) business cycles. 
B) accounting periods. 
C) time periods. 
D) operating cycles.

Question 14

The following transactions relate to the Melbourne Orchid Club,which of them is regarded as an internal transaction?

Accepted Answer

A) Sale of plants. 
B) Payment of office wages. 
C) Depreciation charged on the club's trailer. 
D) Collection of membership subscriptions. 
A) Sale of plants. 
B) Payment of office wages. 
C) Depreciation charged on the club's trailer. 
D) Collection of membership subscriptions.

Question 15

Why is the receipt of an order from a customer not regarded as a transaction?

Accepted Answer

A) Because an exchange between the entity and the customer has not yet occurred. 
B) Because the computer cannot record it. 
C) Because the customer might cancel the order. 
D) The receipt of an order is regarded as a transaction. 
A) Because an exchange between the entity and the customer has not yet occurred. 
B) Because the computer cannot record it. 
C) Because the customer might cancel the order. 
D) The receipt of an order is regarded as a transaction.

Question 16

A deposit received in advance by Adelaide Co for services not yet supplied can be initially recorded by Adelaide in a liability account called:

Accepted Answer

A) sales. 
B) accounts payable. 
C) unearned income. 
D) expenses payable. 
A) sales. 
B) accounts payable. 
C) unearned income. 
D) expenses payable.

Question 17

What is the correct order in which the steps for analysing transactions are carried out?
I Decide what accounts are affected.
Ii Decide if the account type is increasing or decreasing.
Iii Apply the rules of debit and credit.
Iv Decide on the account type.

Accepted Answer

A) i,ii,iii,iv 
B) iv,ii,i,iii 
C) i,iv,ii,iii 
D) i,ii,iv,iii 
A) i,ii,iii,iv 
B) iv,ii,i,iii 
C) i,iv,ii,iii 
D) i,ii,iv,iii

Question 18

A __________________ provides a complete record,in one place,of each transaction in date order.

Accepted Answer

A) ledger 
B) trial balance 
C) income statement 
D) general journal 
A) ledger 
B) trial balance 
C) income statement 
D) general journal

Question 19

Which of these events would not be recorded by accountants?

Accepted Answer

A) Received an order from a customer. 
B) The owner paid his daughter's school fees from the business bank account. 
C) Credit sale. 
D) Depreciation on motor vehicles calculated at the end of the firm's financial year. 
A) Received an order from a customer. 
B) The owner paid his daughter's school fees from the business bank account. 
C) Credit sale. 
D) Depreciation on motor vehicles calculated at the end of the firm's financial year.

Question 20

GST collected by a business on the sale of its goods and services is stored in a liability account called:

Accepted Answer

A) GST outlays. 
B) GST collections. 
C) creditable acquisitions. 
D) input credits. 
A) GST outlays. 
B) GST collections. 
C) creditable acquisitions. 
D) input credits.

Machinery is purchased on credit for $16 000 plus GST.The general journal entry to record this transaction is which of the following? $ $ DR CR

A party to whom the entity owes money for goods or services provided to the entity is called a:

J.Wood performed carpentry services for $7500.He received cash of $5000 with the balance to be received within 28 days.Ignoring GST,the transaction is recorded as which of the following?

The bookkeeper recorded wages for the month as a debit to the Sales account rather than as a debit to wages expense.This error will result in:

Happy Harry requires his customers to pay for their orders six weeks before shipping the goods.How should the cash receipts be recorded by Harry?

Select the entry that correctly records the receipt by Speedy Window Cleaning of $900 in cash for window cleaning services provided.Ignore GST.

In accounting ABN stands for:

The accounting entry when income is earned on credit is which of the following?

Which of these errors would be detected by a trial balance?

If a sole proprietor who owns an electrical store takes home a DVD player for his own personal use it would be considered to be:

A machine purchased by a business for use in producing income can be recorded in an asset account called:

A list of ledger accounts and their balances is called a:

In order to provide timely information for decision-making the life of the business is divided into arbitrary time periods of equal length called:

The following transactions relate to the Melbourne Orchid Club,which of them is regarded as an internal transaction?

Why is the receipt of an order from a customer not regarded as a transaction?

A deposit received in advance by Adelaide Co for services not yet supplied can be initially recorded by Adelaide in a liability account called:

What is the correct order in which the steps for analysing transactions are carried out? I Decide what accounts are affected. Ii Decide if the account type is increasing or decreasing. Iii Apply the rules of debit and credit. Iv Decide on the account type.

A __________________ provides a complete record,in one place,of each transaction in date order.

Which of these events would not be recorded by accountants?

GST collected by a business on the sale of its goods and services is stored in a liability account called:

Decision Making and the Role of Accounting

Financial Statements for Decision Making

Adjusting the Accounts and Preparing Financial Statements

Completing the Accounting Cycle Closing and Reversing Entries

Accounting for Retailing

Accounting for Systems

Partnerships: Formation,operation and Reporting

Companies: Formation and Operations

Regulation and the Conceptual Framework

Cash Management and Control

Receivables

Inventories

Non-Current Assets: Acquisition and Depreciation

Non-Current Assets: Revaluation,disposal and Other Aspects

Liabilities

Presentation of Financial Statements

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Filters

Exam 3: Recording Transactions

Machinery is purchased on credit for $16 000 plus GST.The general journal entry to record this transaction is which of the following? $ $ DR CR

A party to whom the entity owes money for goods or services provided to the entity is called a:

J.Wood performed carpentry services for $7500.He received cash of $5000 with the balance to be received within 28 days.Ignoring GST,the transaction is recorded as which of the following?

The bookkeeper recorded wages for the month as a debit to the Sales account rather than as a debit to wages expense.This error will result in:

Happy Harry requires his customers to pay for their orders six weeks before shipping the goods.How should the cash receipts be recorded by Harry?

Select the entry that correctly records the receipt by Speedy Window Cleaning of $900 in cash for window cleaning services provided.Ignore GST.

In accounting ABN stands for:

The accounting entry when income is earned on credit is which of the following?

Which of these errors would be detected by a trial balance?

If a sole proprietor who owns an electrical store takes home a DVD player for his own personal use it would be considered to be:

A machine purchased by a business for use in producing income can be recorded in an asset account called:

A list of ledger accounts and their balances is called a:

In order to provide timely information for decision-making the life of the business is divided into arbitrary time periods of equal length called:

The following transactions relate to the Melbourne Orchid Club,which of them is regarded as an internal transaction?

Why is the receipt of an order from a customer not regarded as a transaction?

A deposit received in advance by Adelaide Co for services not yet supplied can be initially recorded by Adelaide in a liability account called:

What is the correct order in which the steps for analysing transactions are carried out? I Decide what accounts are affected. Ii Decide if the account type is increasing or decreasing. Iii Apply the rules of debit and credit. Iv Decide on the account type.

A __________________ provides a complete record,in one place,of each transaction in date order.

Which of these events would not be recorded by accountants?

GST collected by a business on the sale of its goods and services is stored in a liability account called:

Decision Making and the Role of Accounting

Financial Statements for Decision Making

Adjusting the Accounts and Preparing Financial Statements

Completing the Accounting Cycle Closing and Reversing Entries

Accounting for Retailing

Accounting for Systems

Partnerships: Formation,operation and Reporting

Companies: Formation and Operations

Regulation and the Conceptual Framework

Cash Management and Control

Receivables

Inventories

Non-Current Assets: Acquisition and Depreciation

Non-Current Assets: Revaluation,disposal and Other Aspects

Liabilities

Presentation of Financial Statements

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Filters