CIE Accounting Paper-1: Specimen Questions 37 - 40 of 214

Question number: 37

MCQ▾

Question

Which business documents form the basis for making entries in the sales book?

Choices

Choice (4) Response
a.

Inward invoice

b.

Outward Receipts

c.

Outward invoice

d.

Inward Receipts

Answer

c.

Explanation

The sales book plays an important role in all credit sales of goods in the business. It is also known as ‘Day book’, ‘Sales day book’, ‘Sold book’, and ‘Sales journal’. Outward invoices form the basis for making entries in the sales book.

Question number: 38

MCQ▾

Question

Among the following which one is liability?

Choices

Choice (4) Response
a.

Purchases

b.

Office equipment

c.

Bank loan

d.

Cash in hand

Answer

c.

Explanation

Assets are the property owned by the company in order to strengthen the business transaction. Liability means the company owes to pay to the creditors. Hence bank loan is the liability of the company whereas other items are assets to the company.

Question number: 39

MCQ▾

Question

Where are the accounts of credit suppliers found?

Choices

Choice (4) Response
a.

Purchase ledger

b.

Sales journal

c.

Sales ledger

d.

Purchase journal

Answer

a.

Explanation

Individual accounts of suppliers will be reflected in the Purchase ledger. This entry will arise when business has made on credit purchase. The sales ledger will be created when credit customers are found in the business.

Question number: 40

MCQ▾

Question

Among the following for which reason government department shows their interest towards the financial statement of the company?

Choices

Choice (4) Response
a.

To invest in the company projects.

b.

Repayment capacity of the company

c.

For granting the proposal

d.

To verify whether the company is paying tax correctly.

Answer

d.

Explanation

The financial statement of company will always reflect the true position of the company. Hence the government department shows their interest towards the financial statement of the company.

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