Question 1

Ignoring GST, which of the following entries correctly records the receipt by Swift Garden Maintenance of $500 in cash for gardening services?

Accepted Answer

A)  DR Bank $500; CR Services $500 
B)  DR Services $500; CR Bank $500 
C)  DR Bank $500; CR Debtors $500 
D)  DR Equity $500; CR Services $500 
A)  DR Bank $500; CR Services $500 
B)  DR Services $500; CR Bank $500 
C)  DR Bank $500; CR Debtors $500 
D)  DR Equity $500; CR Services $500 A

Question 2

Jones Cleaning Services purchased 12 months' worth of cleaning supplies from Focus on Cleaning. The purchase is for cash and the invoiced amount is $1200. Ignoring GST, the entry that correctly records this transaction is:

Accepted Answer

A)  DR Cleaning Supplies expense $1200; CR Equity $1200 
B)  DR Bank $1200; CR Cleaning Supplies asset $1200 
C)  DR Cleaning Supplies asset $1200; CR Bank $1200 
D)  DR Bank $1200; CR Cleaning Supplies expense $1200 
A)  DR Cleaning Supplies expense $1200; CR Equity $1200 
B)  DR Bank $1200; CR Cleaning Supplies asset $1200 
C)  DR Cleaning Supplies asset $1200; CR Bank $1200 
D)  DR Bank $1200; CR Cleaning Supplies expense $1200 C

Question 3

An entity repays $2000 of an existing bank loan. The transaction is recorded as:

Accepted Answer

A)  DR Bank loan $2000; CR Owner's capital $2000 
B)  DR Cash $2000; CR Accounts payable $2000 
C)  DR Cash $2000; CR Bank loan $2000 
D)  DR Bank loan $2000; CR Cash $2000 
A)  DR Bank loan $2000; CR Owner's capital $2000 
B)  DR Cash $2000; CR Accounts payable $2000 
C)  DR Cash $2000; CR Bank loan $2000 
D)  DR Bank loan $2000; CR Cash $2000 D

Question 4

In the expanded version of the accounting equation, income and expenses are sub-groupings of:

Accepted Answer

A)  assets. 
B)  liabilities. 
C)  drawings. 
D)  equity. 
A)  assets. 
B)  liabilities. 
C)  drawings. 
D)  equity.

Question 5

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

Accepted Answer

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

Question 6

Which of the following represents the accounting entry when expenses are incurred on
Credit?

Accepted Answer

A)  DR Cash, CR Income 
B)  DR Accounts receivable, CR Income 
C)  DR Expense, CR Accounts payable 
D)  DR Accounts payable, CR Income 
A)  DR Cash, CR Income 
B)  DR Accounts receivable, CR Income 
C)  DR Expense, CR Accounts payable 
D)  DR Accounts payable, CR Income

Question 7

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

Accepted Answer

A)  chart of accounts. 
B)  balance sheet. 
C)  general journal. 
D)  trial balance. 
A)  chart of accounts. 
B)  balance sheet. 
C)  general journal. 
D)  trial balance.

Question 8

The system of accounting where each transaction affects two or more accounts and the sum of the debit entries equals the sum of the credit entries is called:

Accepted Answer

A)  single transaction accounting. 
B)  two-entry accounting. 
C)  double-entry accounting. 
D)  debit and credit accounting. 
A)  single transaction accounting. 
B)  two-entry accounting. 
C)  double-entry accounting. 
D)  debit and credit accounting.

Question 9

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

Question 10

A listing of the complete ledger account titles and their related account numbers is known as the:

Accepted Answer

A)  general ledger. 
B)  computerised accounts. 
C)  chart of accounts. 
D)  index. 
A)  general ledger. 
B)  computerised accounts. 
C)  chart of accounts. 
D)  index.

Question 11

Which of these events would be recorded by an accountant?

Accepted Answer

A)  An employee resigns. 
B)  An employee receives a promotion. 
C)  An employee injures themselves at work in the course of their duties. 
D)  An employee is paid by being given a computer instead of their normal wages. 
A)  An employee resigns. 
B)  An employee receives a promotion. 
C)  An employee injures themselves at work in the course of their duties. 
D)  An employee is paid by being given a computer instead of their normal wages.

Question 12

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

Accepted Answer

A)  sales provision. 
B)  unearned revenue. 
C)  accounts payable. 
D)  accrued expenses. 
A)  sales provision. 
B)  unearned revenue. 
C)  accounts payable. 
D)  accrued expenses.

Question 13

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

Accepted Answer

A)  prepayments. 
B)  plant and equipment. 
C)  debtors. 
D)  production. 
A)  prepayments. 
B)  plant and equipment. 
C)  debtors. 
D)  production.

Question 14

Why is the placing of an order with a supplier not regarded as a transaction?

Accepted Answer

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

Question 15

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

Accepted Answer

A)  borrower. 
B)  lender. 
C)  debtor. 
D)  creditor. 
A)  borrower. 
B)  lender. 
C)  debtor. 
D)  creditor.

Question 16

James Wright performed handyman services for $2500. He received cash of $1500 with
The balance to be received within 28 days. Ignoring GST, the transaction is recorded as:

Accepted Answer

A)  DR Cash $1500; DR Accounts receivable $1000; CR Services revenue $2500 
B)  DR Services revenue $2500; CR Cash $1500; CR Accounts payable $1000 
C)  DR Cash $2500; CR Equity $2500 
D)  DR Cash $1500; DR Equity $1000; CR Services revenue $2500 
A)  DR Cash $1500; DR Accounts receivable $1000; CR Services revenue $2500 
B)  DR Services revenue $2500; CR Cash $1500; CR Accounts payable $1000 
C)  DR Cash $2500; CR Equity $2500 
D)  DR Cash $1500; DR Equity $1000; CR Services revenue $2500

Question 17

GST paid by a business on the purchase of its goods and services, and for which a reduction of GST collected will be claimed from the tax department, is stored in an account called:

Accepted Answer

A)  GST holdings. 
B)  GST collected. 
C)  GST expense. 
D)  GST receivable. 
A)  GST holdings. 
B)  GST collected. 
C)  GST expense. 
D)  GST receivable.

Question 18

Which of the following statements concerning the accounting period is correct?

Accepted Answer

A)  The accounting period originates from the accounting equation. 
B)  The accounting period must be at least 3 months long. 
C)  The length of the accounting period varies with the needs of users. 
D)  The length of the accounting period depends on which country the business is located in. 
A)  The accounting period originates from the accounting equation. 
B)  The accounting period must be at least 3 months long. 
C)  The length of the accounting period varies with the needs of users. 
D)  The length of the accounting period depends on which country the business is located in.

Question 19

What are the two basic types of income statement accounts?

Accepted Answer

A)  Asset and profit 
B)  Equity and expense 
C)  Income and equity 
D)  Income and expense 
A)  Asset and profit 
B)  Equity and expense 
C)  Income and equity 
D)  Income and expense

Question 20

Which of the following errors would be detected by a trial balance?

Accepted Answer

A)  Staff wages were recorded as office expenses. 
B)  The cashier pocketed the cash from a cash sale and did not record it on the register. 
C)  A cash sale was recorded in the sales account as $548 instead of $584 but was correctly recorded in the bank account. 
D)  Supplies purchased on credit were recorded as a debit to the plant and equipment account and a credit to the accounts payable account. 
A)  Staff wages were recorded as office expenses. 
B)  The cashier pocketed the cash from a cash sale and did not record it on the register. 
C)  A cash sale was recorded in the sales account as $548 instead of $584 but was correctly recorded in the bank account. 
D)  Supplies purchased on credit were recorded as a debit to the plant and equipment account and a credit to the accounts payable account.

Exam 3: Recording Transactions

Ignoring GST, which of the following entries correctly records the receipt by Swift Garden Maintenance of $500 in cash for gardening services?

Jones Cleaning Services purchased 12 months' worth of cleaning supplies from Focus on Cleaning. The purchase is for cash and the invoiced amount is $1200. Ignoring GST, the entry that correctly records this transaction is:

An entity repays $2000 of an existing bank loan. The transaction is recorded as:

In the expanded version of the accounting equation, income and expenses are sub-groupings of:

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

Which of the following represents the accounting entry when expenses are incurred on Credit?

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

The system of accounting where each transaction affects two or more accounts and the sum of the debit entries equals the sum of the credit entries is called:

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

A listing of the complete ledger account titles and their related account numbers is known as the:

Which of these events would be recorded by an accountant?

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

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

Why is the placing of an order with a supplier not regarded as a transaction?

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

James Wright performed handyman services for $2500. He received cash of $1500 with The balance to be received within 28 days. Ignoring GST, the transaction is recorded as:

GST paid by a business on the purchase of its goods and services, and for which a reduction of GST collected will be claimed from the tax department, is stored in an account called:

Which of the following statements concerning the accounting period is correct?

What are the two basic types of income statement accounts?

Which of the following errors would be detected by a trial balance?

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

Accounting for Manufacturing

Cost Accounting Systems

Cost-Volume-Profit Analysis for Decision Making

Budgeting for Planning and Control

Performance Evaluation for Managers

Differential Analysis, Profitability Analysis and Capital Budgeting

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