C The use of double-entry bookkeeping and accounting systems

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

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

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

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

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

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