AAT L3 Advanced Bookkeeping 6

Question 1

Capital introduced by the owner of a business is recorded as:

Accepted Answer

Debit Bank, Credit Capital

Answer

Debit Capital, Credit Bank

Answer

Debit Revenue, Credit Capital

Answer

Debit Capital, Credit Revenue

Question 2

A credit balance on a trade payable account means:

Accepted Answer

The business owes money to the supplier

Answer

The supplier owes the business money

Answer

The account has been settled

Answer

An error has occurred

Question 3

Which of the following is NOT a book of prime entry?

Accepted Answer

The general ledger

Answer

Cash book

Answer

Sales day book

Answer

Purchase returns day book

Question 4

Under the consistency concept, an entity should:

Accepted Answer

Use the same accounting policies year on year unless there is good reason to change

Answer

Always use the most conservative accounting policy

Answer

Change accounting policies each year to reflect current market conditions

Answer

Apply different methods to different assets within the same class

Question 5

Goods taken by the owner for personal use (drawings in kind) are recorded as:

Accepted Answer

Debit Drawings, Credit Purchases

Answer

Debit Purchases, Credit Cash

Answer

Debit Revenue, Credit Drawings

Answer

Debit Cash, Credit Drawings

Question 6

Which of the following is shown on the debit side of the trial balance?

Accepted Answer

Trade receivables

Answer

Share capital

Answer

Trade payables

Answer

Loan from bank