Month: September 2018

In accounting, the term “purchases” means the following…..?

Select ONE answer:

1. All items bought.
2. Only goods that are brought on credit.
3. Only those goods that are brought for resale.
4. Only those goods that are brought and paid for?

Explain what is meant by buying a good on credit?:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 3 – In accounting, the meaning of the term “purchases” is limited to the purchase of goods which are intended to be resold in the normal course of business which the company hope will be done at a profit. It does not matter whether the goods are paid for or not. Some items which a company buys such as a car or a van may not be intended to be resold in the normal course of business, but used to help conduct the normal business activities and will be treated as a fixed asset.

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If there is a separate sub-ledger account for every debtor and creditor, which of the following double-entries is the correct way to record money paid as a cheque to Pat Smith, who is a creditor of the business?

Select ONE answer:

1. Account to Debit Pat Smith / Account to Credit Cash
2. Account to Debit Bank / Account to Credit Pat Smith
3. Account to Debit Cash / Account to Credit Pat Smith
4. Account to Debit Pat Smith / Account to Credit Bank

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 4 – This is the correct double entry record when a firm pays money to one of its creditors for an unpaid invoice using a cheque.

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Which of the following double-entries is the correct way to record money received from shareholders as new capital into the business’s bank account?

Select ONE answer:

1. Account to Debit Capital / Account to Credit Bank
2. Account to Debit Cash / Account to Credit Capital
3. Account to Debit Bank / Account to Credit Capital
4. Account to Debit Capital / Account to Credit Cash

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 3 – This is the correct double entry record when a business receives new capital from shareholders into its bank accounts.

This work is licensed under a Creative Commons Attribution 4.0 International License.

If there is a separate sub-ledger account for every debtor and creditor, which of the following double-entries is the correct way to record money received from Peter Smith, who is a debtor to the business?

Select ONE answer:

1. Account to Debit Peter Smith / Account to Credit Bank
2. Account to Debit Bank / Account to Credit Peter Smith
3. Account to Debit Bank / Account to Credit Cash
4. Account to Debit Cash / Account to Credit Peter Smith

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 2 – This is the correct double entry record when a firm receives money from one of its debtors for an unpaid invoice.

This work is licensed under a Creative Commons Attribution 4.0 International License.

A school brought a set of computers to be used in the teaching of lessons, and paid for them using a cheque. Which of the following double-entries below is the correct way to record this transaction?

Select ONE answer:

1. Account to Debit Computer / Account to Credit Bank
2. Account to Debit Bank / Account to Credit Computer
3. Account to Debit Cash / Account to Credit Computer
4. Account to Debit Computer / Account to Credit Cash

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 1 – This is the correct double entry record when a school buys the computers and pays for the asset by using a cheque. Answer 2 – would be when the school then sold the computers to a third-party and were paid by a cheque.

This work is licensed under a Creative Commons Attribution 4.0 International License.