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Examination

This document provides answers and explanations for bookkeeping and accounting questions related to working capital, the balance sheet, accounts payable, purchase orders, accounts receivable, and calculating net sales revenue. Key points covered include that working capital includes current assets like accounts receivable, net income/loss is transferred to retained earnings on the balance sheet, accounts payable is a current liability, a purchase order authorizes a purchase transaction, and accounts receivable refers to money owed to a company by its debtors.

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Rural Bank Cauayan
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343 views2 pages

Examination

This document provides answers and explanations for bookkeeping and accounting questions related to working capital, the balance sheet, accounts payable, purchase orders, accounts receivable, and calculating net sales revenue. Key points covered include that working capital includes current assets like accounts receivable, net income/loss is transferred to retained earnings on the balance sheet, accounts payable is a current liability, a purchase order authorizes a purchase transaction, and accounts receivable refers to money owed to a company by its debtors.

Uploaded by

Rural Bank Cauayan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Bookkeeping Questions c.

Money owed by a company to its


1. Which of the following is an item of vendors
working capital? Answers:
a. Fixed assets 1. The correct answer is C.
b. Long-term investments
Explanation: Working capital consists of
c. Accounts receivable
current assets and current liabilities.
d. Bonds payable
2. To which account in the Balance Sheet is
2. The correct answer is A.
the net income or net loss
transferred to at the end of the accounting Explanation: The amount of net income or net
period? loss is transferred to Retained Earnings,
a. Cash which is an equity account.
b. Accounts Receivable 3. The correct answer is B.
c. Inventory
d. Sample Accounts Payable Questions Explanation: Accounts payable is a short-term
3. Accounts Payable is classified as a/an obligation. Hence, it is classified as a current
___________ in the _____________. liability in the Balance Sheet.
a. Current asset; Balance Sheet 4. The correct answer is C.
b. Current liability; Balance Sheet
c. Expense; Income Statement Explanation: A purchase order is a buyer-
d. Revenue; Income Statement generated document that authorizes the
4. Which of the following documents purchase transaction, and when the seller
authorizes the purchase transaction? accepts the terms and conditions indicated
a. Credit memo from supplier therein, it becomes a binding contract
b. Invoice or bill from supplier between the seller and the buyer.
c. Purchase order 5. The correct answer is D.
d. Purchase requisition
Accounts Receivable Questions Explanation: Net sales revenue is the amount
5. Brown Glory Corp. has sales revenue of left after deducting sales discounts and sales
$150,000, sales discounts of returns and allowances from gross sales
$12,000, sales returns allowances of revenue. Cost of goods sold is deducted from
$24,000, and cost of goods sold of net sales revenue to arrive at gross profit.
$60,000. What would be the net sales Gross Sales Revenue – Sales Discounts – Sales
revenue of Brown Glory Corp.? Returns and Allowances
a. $102,000 $150,000 – $12,000 – $24,000 = $114,000.
b. $54,000 6. The correct answer is A.
c. $90,000
Explanation: Accounts receivable is defined
d. $114,000
as money owed to a company by its debtors.
6. What is meant by accounts receivable?
When a company sells goods on credit, it
Money owed to a company by its debtors
creates a current asset by the name of
a. Money owed by a company to its
accounts receivable and books the
creditors
corresponding revenue. When the cash is
b. Money owed to a company by its
received, the asset is reversed.
employees

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