Exam 3: Recording Financial Transactions and the Principles of Accounting

Use the following information to answer Questions :Toshyo purchases an inventory of spare parts on credit from its suppliers for $15 000. During the month Toshyo pays its suppliers $10 000 and sells spare parts (which cost the business $8 000) to its customers on credit for $20 000. Customers pay Toshyo $12 000 during the month. -Inventory increases by:

During the month MaxiCo purchases inventory on credit for €22 000 and sells inventory on credit (which cost MaxiCo €14 000) for €24 000. Also during the month MaxiCo pays its suppliers €15 000 and receives €16 000 from its customers. MaxiCo's cost of sales is:

A business has cash sales of £25 000. Inventory purchases on credit are £10,000. Payments to suppliers for inventory purchased on credit are £6 000. Cost of sales are £7 000. Wages paid are £2 000 -The profit effect of these transactions is:

The Income Statement comprises the following groups of accounts:

Use the following information to answer Questions :Toshyo purchases an inventory of spare parts on credit from its suppliers for $15 000. During the month Toshyo pays its suppliers $10 000 and sells spare parts (which cost the business $8 000) to its customers on credit for $20 000. Customers pay Toshyo $12 000 during the month. -Profit increases by:

Taken together, receivables, payables, inventory and bank are often referred to as:

Use the following information to answer Questions :Toshyo purchases an inventory of spare parts on credit from its suppliers for $15 000. During the month Toshyo pays its suppliers $10 000 and sells spare parts (which cost the business $8 000) to its customers on credit for $20 000. Customers pay Toshyo $12 000 during the month. -Bank increases by:

The purchase of goods on credit for later resale would affect the following accounts:

Goods bought on credit from suppliers are referred to as:

A business has cash sales of £25 000. Inventory purchases on credit are £10,000. Payments to suppliers for inventory purchased on credit are £6 000. Cost of sales are £7 000. Wages paid are £2 000 -The effect of these transactions on the Bank account is an increase of:

Goods sold on credit to customers are referred to as:

Accounting transactions are recorded from:

The need to calculate cost of sales is driven by which of the following accounting principles?

A business has cash sales of £25 000. Inventory purchases on credit are £10,000. Payments to suppliers for inventory purchased on credit are £6 000. Cost of sales are £7 000. Wages paid are £2 000 -The effect of these transactions on the Inventory account is a:

Paying cash for a computer system for business use would affect the following types of account:

Use the following information to answer Questions :Toshyo purchases an inventory of spare parts on credit from its suppliers for $15 000. During the month Toshyo pays its suppliers $10 000 and sells spare parts (which cost the business $8 000) to its customers on credit for $20 000. Customers pay Toshyo $12 000 during the month. -Payables increases by:

The principle that financial statements are prepared on the basis that the business will continue in operation is:

Use the following information to answer Questions :Toshyo purchases an inventory of spare parts on credit from its suppliers for $15 000. During the month Toshyo pays its suppliers $10 000 and sells spare parts (which cost the business $8 000) to its customers on credit for $20 000. Customers pay Toshyo $12 000 during the month. -Receivables increases by:

In recording business transactions using the double entry method (as described in Chapter 3), which of the following statements is true

The Statement of Financial Position comprises the following groups of accounts: