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5 Written questions

5 Matching questions

  1. Inventory
  2. Carrying value
  3. Accounting sub-systems
  4. Receivership
  5. Patent
  1. a An exclusive right to produce and sell a particular product or process for a number of years.
  2. b Parts of the accounting system that deal with specific functions, e.g., payroll, accounts receivable, fixed assets.
  3. c The original cost of an asset less accumulated depreciation, if any.
  4. d The process where a receiver is appointed to protect and collect the assets of a company which is, or is close to being, insolvent.
  5. e Goods acquired for resale.

5 Multiple choice questions

  1. The form of the ledger account that is almost universally employed in practice. In a columnar ledger account the debit and credit money columns are placed side by side, with the left hand column designated as the debit column. There is also a balance column that allows the balance of the account to be updated after each entry.
  2. The contract made between the partners setting out the terms and conditions by which the partnership will be governed. It is desirable that the agreement be in writing but this is not a legal requirement.
  3. The alignment of Australian accounting standards with international standards issued by the International Accounting Standards Committee.
  4. A multi-column, special journal where all cash payments are recorded.
  5. Ongoing investigation as to compliance with policies and procedures carried out by designated staff within an organisation.

5 True/False questions

  1. Monetary principleTrading businesses: the normal time period between the original purchase of an inventory item and the collection of cash resulting from its sale; service businesses: the normal time period between the commencement of the service contract and the collection of cash upon its completion.


  2. Sales returns journalA special journal used to record credit sales.


  3. ShareThe units into which a company's capital is divided.


  4. IncurAustralian Society of Certified Practising Accountants.


  5. Posting referencesEntries made at the end of the longest time period for which revenue and expenses information needs to be kept (usually a year) to set the revenue and expense accounts back to zero and transfer net profit and drawings to the owner's capital account.