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5 Written Questions

1. a cheque returned by the bank because the drawer’s chequing account does not have sufficient funds to cover the amount of the cheque
2. the person or business to whom a cheque is written
3. this ratio is calculated by dividing net income by net sales
4. states that revenue should be matched against the expenses incurred to earn that revenue
5. a numerical comparison of two items on a financial statement used to evaluate the relationship between the two items

5 Matching Questions

1. bank statement
2. outstanding deposits
3. canceled cheques
4. net loss
5. signature card

1. a an itemised record of all the transactions occurring in a depositor’s account over a given period
2. b if the total of the Credit column of the Income Statement section is less than the Debit column
3. c is prepared containing the signature(s) of the person(s) authorised to write cheques on the bank account, in order to protect and account holder and the bank against cheques with forged signatures
4. d deposits that have been recorded in the chequebook but do not appear on the bank statement
5. e cheques that have been paid by the bank, deducted from the depositor’s account, and returned with the bank statement

5 Multiple Choice Questions

1. means drawing a line under a column of amounts
   1. cheque
   2. drawer
   3. ruling
   4. drawee
2. journal entries made to close out or reduce to zero the balances in the temporary capital accounts and then transfer the net income or loss to the capital account
   1. external controls
   2. internal controls
   3. closing entries
   4. compound entry
3. the bank form whereon the currency and cheques to be deposited are listed
   1. net loss
   2. report form
   3. deposit slip
   4. depositor
4. an authorised signature that is written or stamped on the back of a cheque
   1. bank statement
   2. drawee
   3. income statement
   4. endorsement
5. reports a business’s net income or net loss for a fiscal period
   1. bank statement
   2. financial statements
   3. income statement
   4. endorsement

5 True/False Question

1. post-closing trial balance → is prepared to make sure the total debits are equal to the total credits in the general ledger after the closing entries have been posted
   

   True        False

2. report form → a person or business who has cash on deposit at a bank
   

   True        False

3. net income → results when revenue is greater than expenses
   

   True        False

4. internal controls → steps that a business takes to protect its cash and other assets
   

   True        False

5. financial statements → summarise the changes resulting from business transactions that have occurred during a fiscal period
   

   True        False