Question 1

A separate ledger account is maintained for each:

Accepted Answer

A)  item that appears in the financial reports. 
B)  journal entry. 
C)  business transaction. 
D)  day of business. 
A)  item that appears in the financial reports. 
B)  journal entry. 
C)  business transaction. 
D)  day of business.

Question 2

If a transaction causes a liability account to increase, which of these related effects may also occur?

Accepted Answer

A)  An increase of an equal amount in an equity account. 
B)  An increase of an equal amount in an asset account. 
C)  A decrease of an equal amount in an asset account. 
D)  An increase of an equal amount in another liability account. 
A)  An increase of an equal amount in an equity account. 
B)  An increase of an equal amount in an asset account. 
C)  A decrease of an equal amount in an asset account. 
D)  An increase of an equal amount in another liability account.

Question 3

How many of the following statements about the double-entry system are true?
i. The accounting equation should stay in balance
ii. At least one account should be debited and one account credited
iii. Credits should always be entered into the journal before debits

Accepted Answer

A)  3 
B)  2 
C)  1 
D)  0 
A)  3 
B)  2 
C)  1 
D)  0

Question 4

Which of the following transactions relating to the West Cricket Club is regarded as an internal transaction?

Accepted Answer

A)  Sale of food and drinks from the canteen. 
B)  Depreciation charged on the club's mower. 
C)  Collection of players' fees. 
D)  Payment of wages for admin staff. 
A)  Sale of food and drinks from the canteen. 
B)  Depreciation charged on the club's mower. 
C)  Collection of players' fees. 
D)  Payment of wages for admin staff.

Question 5

The term used in the Framework for the Preparation and Presentation of Financial Statements for income which arises in the course of the ordinary activities of an entity is:

Accepted Answer

A)  gains. 
B)  fees. 
C)  revenue. 
D)  profit. 
A)  gains. 
B)  fees. 
C)  revenue. 
D)  profit.

Question 6

In Accounting, GST stands for:

Accepted Answer

A)  General Service Tax. 
B)  Government Systems Tax. 
C)  Goods and Services Tax. 
D)  General and Sales Transactions. 
A)  General Service Tax. 
B)  Government Systems Tax. 
C)  Goods and Services Tax. 
D)  General and Sales Transactions.

Question 7

The GST is a tax that is levied at the rate of ______ on the sale of most goods and services. It was introduced in Australia on July 1 2000.

Accepted Answer

A)  5% 
B)  10% 
C)  15% 
D)  20% 
A)  5% 
B)  10% 
C)  15% 
D)  20%

Question 8

In accounting, ABN stands for:

Accepted Answer

A)  Annual Business Number. 
B)  Australian Business Number. 
C)  Automated Business Number. 
D)  Australian Bank Number. 
A)  Annual Business Number. 
B)  Australian Business Number. 
C)  Automated Business Number. 
D)  Australian Bank Number.

Question 9

A regular withdrawal of cash by the owner from the business is treated as a reduction in equity and is recorded in an account called:

Accepted Answer

A)  petty cash. 
B)  drawings. 
C)  debtors. 
D)  borrowings. 
A)  petty cash. 
B)  drawings. 
C)  debtors. 
D)  borrowings.

Question 10

Which of the following statements relating to a chart of accounts is correct?

Accepted Answer

A)  The accounts are listed in alphabetical order. 
B)  It is a list of accounts and their current balances. 
C)  It is created at the commencement of a business. 
D)  It is the same for most businesses. 
A)  The accounts are listed in alphabetical order. 
B)  It is a list of accounts and their current balances. 
C)  It is created at the commencement of a business. 
D)  It is the same for most businesses.

Question 11

Kleen Windows received $770 (including GST) from its customer John Jones for services previously supplied to him on credit. Which of the following entries correctly records this receipt?

Accepted Answer

A)  DR Debtors $770; CR Bank $770 
B)  DR Bank $770; CR Debtors $770 
C)  DR Bank $770; CR Services revenue $700; CR GST payable $70 
D)  DR Debtors $770; CR Services revenue $700; CR GST payable $70 
A)  DR Debtors $770; CR Bank $770 
B)  DR Bank $770; CR Debtors $770 
C)  DR Bank $770; CR Services revenue $700; CR GST payable $70 
D)  DR Debtors $770; CR Services revenue $700; CR GST payable $70

Question 12

Which of the following statements is correct?

Accepted Answer

A)  The normal balance for an asset is a credit. 
B)  The normal balance for equity is a credit. 
C)  The normal balance for income is a debit. 
D)  The normal balance for a liability is a debit. 
A)  The normal balance for an asset is a credit. 
B)  The normal balance for equity is a credit. 
C)  The normal balance for income is a debit. 
D)  The normal balance for a liability is a debit.

Question 13

A collection of all the individual accounts for a particular business is referred to as:

Accepted Answer

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

Question 14

A sole proprietor who owns a newsagency takes home stationery and exercise books for
His children to use at school. This would be considered to be:

Accepted Answer

A)  an expense because an asset has been used for personal use. 
B)  an increase in equity and a decrease in assets because the sole proprietor purchased the inventory. 
C)  a decrease in assets and a decrease in equity because by taking the stationery items 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 used for personal use. 
B)  an increase in equity and a decrease in assets because the sole proprietor purchased the inventory. 
C)  a decrease in assets and a decrease in equity because by taking the stationery items the owner has made a drawing from the business. 
D)  an increase in assets and an increase in equity.

Question 15

O'Brien paid $880, including GST, for advertising. The entry to record this transaction is:

Accepted Answer

A)  DR Advertising $880; CR Cash $880 
B)  DR Advertising $880, DR GST receivable $88; CR Cash $792 
C)  DR Advertising $880; CR GST receivable $80, CR Cash $800 
D)  DR Advertising $800, DR GST receivable $80; CR Cash $880 
A)  DR Advertising $880; CR Cash $880 
B)  DR Advertising $880, DR GST receivable $88; CR Cash $792 
C)  DR Advertising $880; CR GST receivable $80, CR Cash $800 
D)  DR Advertising $800, DR GST receivable $80; CR Cash $880

Question 16

Which of the following events would not be recorded by an accountant?

Accepted Answer

A)  The owner paid his son's car registration from the business bank account. 
B)  Credit purchase. 
C)  Placed an order with a supplier. 
D)  Depreciation on equipment calculated at the end of the firm's financial year. 
A)  The owner paid his son's car registration from the business bank account. 
B)  Credit purchase. 
C)  Placed an order with a supplier. 
D)  Depreciation on equipment calculated at the end of the firm's financial year.

Question 17

Select the account types for these items:
$\bullet$Rent received in advance
$\bullet$Mortgage
$\bullet$Prepaid expenses
$\bullet$Rates

Accepted Answer

A)  Expense, liability, liability, equity 
B)  Asset, equity, asset, expense 
C)  Liability, liability, asset, expense 
D)  Expense, liability, asset, liability 
A)  Expense, liability, liability, equity 
B)  Asset, equity, asset, expense 
C)  Liability, liability, asset, expense 
D)  Expense, liability, asset, liability

Question 18

A trial balance will disclose which of the following errors?

Accepted Answer

A)  Failing to record a transaction. 
B)  Recording an amount on the correct side of the wrong account. 
C)  Recording the same transaction twice. 
D)  Recording a credit as a debit. 
A)  Failing to record a transaction. 
B)  Recording an amount on the correct side of the wrong account. 
C)  Recording the same transaction twice. 
D)  Recording a credit as a debit.

Question 19

Financial reports prepared during the financial reporting period are called:

Accepted Answer

A)  automated reports. 
B)  interim reports. 
C)  consolidated reports. 
D)  trial balances. 
A)  automated reports. 
B)  interim reports. 
C)  consolidated reports. 
D)  trial balances.

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 payable. 
C)  GST purchases. 
D)  GST receivable. 
A)  GST outlays. 
B)  GST payable. 
C)  GST purchases. 
D)  GST receivable.

Exam 3: Recording Transactions

A separate ledger account is maintained for each:

If a transaction causes a liability account to increase, which of these related effects may also occur?

How many of the following statements about the double-entry system are true? i. The accounting equation should stay in balance ii. At least one account should be debited and one account credited iii. Credits should always be entered into the journal before debits

Which of the following transactions relating to the West Cricket Club is regarded as an internal transaction?

The term used in the Framework for the Preparation and Presentation of Financial Statements for income which arises in the course of the ordinary activities of an entity is:

In Accounting, GST stands for:

The GST is a tax that is levied at the rate of ______ on the sale of most goods and services. It was introduced in Australia on July 1 2000.

In accounting, ABN stands for:

A regular withdrawal of cash by the owner from the business is treated as a reduction in equity and is recorded in an account called:

Which of the following statements relating to a chart of accounts is correct?

Kleen Windows received $770 (including GST) from its customer John Jones for services previously supplied to him on credit. Which of the following entries correctly records this receipt?

Which of the following statements is correct?

A collection of all the individual accounts for a particular business is referred to as:

A sole proprietor who owns a newsagency takes home stationery and exercise books for His children to use at school. This would be considered to be:

O'Brien paid $880, including GST, for advertising. The entry to record this transaction is:

Which of the following events would not be recorded by an accountant?

Select the account types for these items: ∙\bullet∙ Rent received in advance ∙\bullet∙ Mortgage ∙\bullet∙ Prepaid expenses ∙\bullet∙ Rates

A trial balance will disclose which of the following errors?

Financial reports prepared during the financial reporting period are called:

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

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

Filters

Select the account types for these items: $\bullet$ Rent received in advance $\bullet$ Mortgage $\bullet$ Prepaid expenses $\bullet$ Rates