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C The use of double-entry bookkeeping and accounting systems

Written by Fahad Mirza (ACCA)

6 ACCA Financial Accounting questions with answers and explanations.

Printable worksheet with answer key

All questions with answers
  1. A business has assets of $80,000 and liabilities of $30,000. What is the equity?

    • 1 $80,000
    • 2 $50,000
    • 3 $30,000
    • 4 $110,000
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    Correct answer: $50,000

    Equity = assets less liabilities = $80,000 - $30,000.

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  2. A business buys goods for resale for $2,500 on credit. What is the correct entry?

    • 1 Debit payables $2,500, credit purchases $2,500
    • 2 Debit receivables $2,500, credit sales $2,500
    • 3 Debit purchases $2,500, credit bank $2,500
    • 4 Debit purchases $2,500, credit payables $2,500
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    Correct answer: Debit purchases $2,500, credit payables $2,500

    The expense or inventory increases (debit) and the liability to the supplier increases (credit).

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  3. Which document is created by the customer when goods arrive, to record what was actually received?

    • 1 Purchase order
    • 2 Goods despatched note
    • 3 Remittance advice
    • 4 Goods received note
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    Correct answer: Goods received note

    The customer's goods received note is compared with the purchase order and the supplier's invoice.

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  4. At the end of the accounting period, which balances are carried forward to the next period?

    • 1 Only equity accounts
    • 2 Asset, liability and equity accounts
    • 3 Income and expense accounts
    • 4 Only asset accounts
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    Correct answer: Asset, liability and equity accounts

    Income and expense accounts are closed to profit or loss. Statement of financial position balances continue.

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  5. Which of these is a debit entry?

    • 1 An increase in income
    • 2 An increase in share capital
    • 3 An increase in an expense
    • 4 An increase in a liability
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    Correct answer: An increase in an expense

    Debits increase assets and expenses. Credits increase liabilities, equity and income.

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  6. Which is a benefit of a cloud-based accounting system?

    • 1 It makes backups unnecessary
    • 2 It removes the need to enter any data
    • 3 It removes all security risks
    • 4 Data can be accessed from different locations through the internet
    Show answer

    Correct answer: Data can be accessed from different locations through the internet

    Cloud systems give flexible access, but data entry, backups and security still need managing.

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