Source Documents
What is a Statement of account and state the purpose of it.
A summary of transactions for the month and reminds the customer of amount owing.
The 3 internal users are Owners, Managers and Employess
Give me 2 accounts in debit balance:Asset.
Bank, Cash, Petty cash, inventory Motor vehicle, equipment, fixtures and fittings and trade receivables.
Name all 5 ledger accounts.
Sales ledger, Purchases ledger, Nominal or General ledger, Cash book and Petty cash book.
What is the accounting equation?
Assets = Liabilities+Capital or Liabilities= Assets - Capital or Capital = Assets - Liabilities.
How many details are there in the Purchase Order and name them all.
There are 10 details which are customer's name, supplier's name, Purchase Order number, quantity, description, unit price, total amount, products name and signature.
Name all 5 external users.
The 5 external users are Government, Banks, Supplier's, Investors and Customers.
Give me 4 accounts in credit balance:Income.
Sales, other Income, commission received, rent received and discount received.
What is a ledger?
A ledger is a book where each t-account appears on separate page.
What are assets and give an example of an asset.
Items which are owned or owed to help operate the business on a long term basis. Examples are cars, machinery, buildings, air conditioners, inventories, cash and trade receivables.
What does It mean if there's a credit entry in a statement of account.
A decrease in the amount owed.
Why may the Government require your accounting information.
So that they use it for taxation and regulations.
Is rental in debit balance or credit balance?
It is in debit balance: Expenses.
What is the purpose of a purchase ledger?
This is where the accounts of all credit suppliers are kept.
What is duality?
Duality is the recording of a single transaction with 2 aspects, one related to the giver(credit) and one related to the receiver(debit)
Why is an invoice only used for credit sales and not cash sales?
An invoice is used for credit sales because the payment is not immediately as it is issued before the payment.
What is Owner of business called, what will he invest into the business and what is the investment called?
The is Owner is called a entrepreneur, who will invest money and resources into the company to start the business known as capital.
Is trade payable credit balance: Liabilities or Expenses?
Liabilities.
What does Nominal/General ledger include and give 3 examples.
It includes all remaining accounts such as assets, liabilities, expenses, income, sales, purchase and returns.
What is the difference between cash and credit transactions?
Cash transaction requires immediate payment of cash when buying goods while Credit transactions are made at a later date from the date of purchase.
Give one advantage of making payment by cheque instead of cash?
The advantage is that making making payments by cheque is safer as it can be tracked through the bank.
Why may employees be interested in accounting information?
This is because they are interested about their job security.
Give me 2 accounts which are debit balance but not in Assets or Expenses.
Drawings and sales return.
What does the cash book contain?
It contains the cash and bank accounts.
Does sales and revenue have any difference? Yes or No state you reason.
No this is because both of them are the total value of goods that you have sold.