FREE ACCOUNTING AND STUDY GAMES ABOUT

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FREE ACCOUNTING AND STUDY GAMES ABOUT

BOOKKEEPING L1 EXAM QUESTIONS

Qs and Ans Expert- Explanation

This Exam contains:

-Guarantee passing score -49 Questions and Answers -format set of multiple-choice -Expert- Explanation

Question 1: What are Assets?

Answer:

Things a business owns.

Question 2: Which items always appear on the credit side of their account?

Answer:

Purchase returns, sales.Question 3: What information should be included for each entry in the petty cash book?

Answer:

The date, details of expenses, voucher number, total paid, expense amount in correct column, the amount of VAT.

Question 4: Which way do you round the VAT?

Answer:

Downwards.

Question 5: What is accounting?

Answer:

Making use of the info and allowing the owner to understand the financial position of their business.

Question 6: What is a person who owes the business money called?

Answer:

A debtor.

Question 7: What is the formula for calculating VAT?

Answer:

Where amount = A and the rate of VAT = B, it's A x B / 100

Question 8: What is the analysed cash book?

Answer:

A cash book in which the income and expenditure is split up under different headings.

Question 9: What is capital income?

Answer:

Income from sales of assets.

Question 10: How is the petty cash book normally recorded?

Answer:

In an analysed format.

Question 11: What is the difference between gross pay and net pay?

Answer:

Gross pay is the total pay without deductions, Net pay is what the employee is paid once the deductions have been made.Question 12: What is the left hand side of the T account used to record and what is it called?

Answer:

Left hand side records the money paid into the account and is called the Debit side.

Question 13: What is a person who is owed money by a business called?

Answer:

A creditor.

Question 14: What is output VAT?

Answer:

VAT on goods/services going out of the business eg. sales.

Question 15: What are Liabilities?

Answer:

Things a business owes.

Question 16: What are fixed assets?

Answer:

Things which add value to the business and assist in the running of the business eg. equipment/vehicles

Question 17: What is the imprest system?

Answer:

A system in which the amount held for petty cash is fixed and is topped up again after money is spent.

Question 18: What is revenue income?

Answer:

Day to day income from sales of stock or rent of houses etc.Question 19: What is the right hand side of the T account used to record and what is it called?

Answer:

Right hand side records all payments out of the account and is called the credit side.

Question 20: What is the formal accounting equation?

Answer:

Assets=Capital+Liabilities

Question 21: Which items always appear on the debit side of their account?

Answer:

Purchases, sales return, expenses.

Question 22: What are current liabilities?

Answer:

Short term liabilities that are normally paid off within a year eg. overdraft, suppliers

Question 23: What details should be on a cheque?

Answer:

Date of issue, name of payee, amount in both words and figures, signature of account holder.

Question 24: Discounts received go in on the...

Answer:

Right hand side.

Question 25: What are the golden rules of double entry?

Answer:

• Never only one entry.
• Never both entries on the same side.
• Always the same figure on both sides.

Question 26: Discounts allowed go in on the...

Answer:

Left hand side.

Question 27: When is VAT dealt with, at the invoice stage or the payment stage?

Answer:

The invoice stage.

Question 28: What is a contra transaction?

Answer:

A transaction in which money is transferred from one account to another eg. bank to cash.