Question 1

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.

Question 2

What is the source document for a credit sale?

Accepted Answer

A)  Tax invoice 
B)  Credit note 
C)  Receipt 
D)  Cheque 
A)  Tax invoice 
B)  Credit note 
C)  Receipt 
D)  Cheque

Question 3

A firm repays $4000 of an existing bank loan. The transaction is recorded as which of the following entries?

Accepted Answer

A)  DR Bank loan $4000; CR Owner's capital $4000 
B)  DR Cash at bank $4000; CR Accounts receivable $4000 
C)  DR Cash at bank $4000; CR Bank loan $4000 
D)  DR Bank loan $4000; CR Cash at bank $4000 
A)  DR Bank loan $4000; CR Owner's capital $4000 
B)  DR Cash at bank $4000; CR Accounts receivable $4000 
C)  DR Cash at bank $4000; CR Bank loan $4000 
D)  DR Bank loan $4000; CR Cash at bank $4000

Question 4

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

Accepted Answer

A)  An increase of an equal amount in a liability 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 equity account. 
A)  An increase of an equal amount in a liability 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 equity account.

Question 5

Select the entry that correctly records the receipt by Speedy Window Cleaning of $770 (including GST) collected from its customer Alan Lim for goods previously sold to him on credit.

Accepted Answer

A)  Debit bank $770; credit income earned $700; credit GST collections $70 
B)  Debit debtors $770; credit income earned $700; credit GST collections $70 
C)  Debit debtors $770; credit bank $770 
D)  Debit bank $770; credit debtors $770 
A)  Debit bank $770; credit income earned $700; credit GST collections $70 
B)  Debit debtors $770; credit income earned $700; credit GST collections $70 
C)  Debit debtors $770; credit bank $770 
D)  Debit bank $770; credit debtors $770

Question 6

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 7

A chronological record of all the transactions of an entity is provided in the:

Accepted Answer

A)  ledger. 
B)  journal. 
C)  balance sheet. 
D)  trial balance. 
A)  ledger. 
B)  journal. 
C)  balance sheet. 
D)  trial balance.

Question 8

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 9

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

Accepted Answer

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

Question 10

In Accounting GST stands for:

Accepted Answer

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

Question 11

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 12

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 13

A credit entry is made to:

Accepted Answer

A)  decrease an asset, increase a liability, and decrease equity. 
B)  decrease an expense, increase income, and increase equity. 
C)  increase an asset, decrease a liability, and decrease equity. 
D)  decrease an asset, decrease a liability, and increase equity. 
A)  decrease an asset, increase a liability, and decrease equity. 
B)  decrease an expense, increase income, and increase equity. 
C)  increase an asset, decrease a liability, and decrease equity. 
D)  decrease an asset, decrease a liability, and increase equity.

Question 14

The true statement concerning the accounting period is:

Accepted Answer

A)  the length of the accounting period varies with the needs of users. 
B)  the accounting period originates from the accounting equation. 
C)  must be at least 6 months long. 
D)  depends on which country the business is located in. 
A)  the length of the accounting period varies with the needs of users. 
B)  the accounting period originates from the accounting equation. 
C)  must be at least 6 months long. 
D)  depends on which country the business is located in.

Question 15

Which of these events would be recorded by accountants?

Accepted Answer

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

Question 16

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

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 17

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

Question 18

Balance sheet accounts are of three basic types, asset, liability and:

Accepted Answer

A)  income. 
B)  equity. 
C)  expense. 
D)  bank. 
A)  income. 
B)  equity. 
C)  expense. 
D)  bank.

Question 19

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 20

The source document for a cash sale could be a:

Accepted Answer

A)  purchase order. 
B)  credit card slip. 
C)  cheque butt. 
D)  credit note. 
A)  purchase order. 
B)  credit card slip. 
C)  cheque butt. 
D)  credit note.

Exam 3: Recording Transactions

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

What is the source document for a credit sale?

A firm repays $4000 of an existing bank loan. The transaction is recorded as which of the following entries?

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

Select the entry that correctly records the receipt by Speedy Window Cleaning of $770 (including GST) collected from its customer Alan Lim for goods previously sold to him on credit.

In accounting ABN stands for:

A chronological record of all the transactions of an entity is provided in the:

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:

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

In Accounting GST stands for:

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

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 credit entry is made to:

The true statement concerning the accounting period is:

Which of these events would be recorded by accountants?

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

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?

Balance sheet accounts are of three basic types, asset, liability and:

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 source document for a cash sale could be a:

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

Accounting for Manufacturing

Cost Accounting Systems

Cash Management and Control

Cost-Volume-Profit Analysis for Decision Making

Budgeting for Planning and Control

Performance Evaluation for Managers

Differential Analysis, Profitability Analysis and Capital Budgeting

Partnerships: Formation, Operation and Reporting

Companies: Formation and Operations

Regulation and the Conceptual Framework

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

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