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Understanding Accounting Source Documents and Principles Quiz

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Which of the following is an example of an accounting source document?

Sales invoice

Explanation

A document issued by a seller to a buyer that details the sale transaction.

Which of the following documents is used to record the sale of goods or services to a customer?

Sales invoice

Explanation

Documentation of a sale transaction detailing goods or services provided.

Which document is used to record the purchase of inventory from a supplier?

Purchase order

Explanation

A buyer-generated document indicating the types, quantities, and agreed prices for products or services.

Which document is used to record a return of merchandise to a supplier for a refund?

Credit memo

Explanation

Document issued by a seller to a buyer, reducing the amount owed for returned goods.

What is the purpose of a general ledger?

To record day-to-day transactions

Explanation

Main accounting record where financial transactions are recorded.

Which document is used to record the payment of wages to employees?

Payroll register

Explanation

Record detailing payments made to employees for their work.

Which document is used to record the receipt of cash from a customer?

Cash receipt

Explanation

Document acknowledging the receipt of cash from a customer for goods or services.

What principle requires that an organization's financial statements be prepared assuming that the business will continue operating indefinitely?

Going concern principle

Explanation

Assumption that a company will remain in operation for the foreseeable future.

Which accounting principle states that assets should be recorded at their original cost?

Cost principle

Explanation

Assets are recorded on the balance sheet at the price paid to acquire them.

#10

According to the accrual basis of accounting, when are revenues recognized?

When products are sold or services are rendered

Explanation

Revenue is recognized when it is earned, regardless of cash flow timing.

#11

Which accounting principle dictates that expenses should be recognized in the period in which they are incurred, regardless of when the cash payment occurs?

Matching principle

Explanation

Expenses are matched with related revenues in the same accounting period.

#12

Which accounting principle requires that financial statements should be based on evidence that can be verified?

Objectivity principle

Explanation

Financial statements should be reliable, verifiable, and objective.

#13

Which accounting principle states that an entity should use the same accounting methods and procedures from period to period?

Consistency principle

Explanation

Consistency in applying accounting methods ensures comparability of financial statements.

#14

Which of the following is an example of an internal accounting document?

Cash disbursement journal

Explanation

Internal record of all payments made by an organization.

#15

Under which accounting principle should expenses be recognized in the same period as the revenue they help to generate?

Matching principle

Explanation

Expenses are recorded in the same accounting period as the associated revenue.

#16

Under the principle of conservatism, which direction are estimates biased?

Understated

Explanation

Estimates are deliberately kept lower to avoid overstating assets or income.

#17

According to the accounting equation, what is the formula for calculating owner's equity?

Liabilities + Owner's Equity

Explanation

Owner's equity is the residual interest in the assets of a company after deducting liabilities.

#18

Which accounting principle requires that expenses should be recognized in the period in which they contribute to revenue?

Matching principle

Explanation

Expenses are recognized in the same period as the associated revenue.

#19

What does the accounting principle of materiality emphasize?

The significance of insignificant items in financial reporting

Explanation

Relevance of small items in financial statements depending on their impact.

#20

According to the revenue recognition principle, when should revenue be recognized?

When services are rendered or goods are delivered

Explanation

Revenue is recognized when the seller has provided goods or services to the buyer.

Understanding Accounting Source Documents and Principles Quiz

Which of the following is an example of an accounting source document?

Which of the following documents is used to record the sale of goods or services to a customer?

Which document is used to record the purchase of inventory from a supplier?

Which document is used to record a return of merchandise to a supplier for a refund?

What is the purpose of a general ledger?

Which document is used to record the payment of wages to employees?

Which document is used to record the receipt of cash from a customer?

What principle requires that an organization's financial statements be prepared assuming that the business will continue operating indefinitely?

Which accounting principle states that assets should be recorded at their original cost?

According to the accrual basis of accounting, when are revenues recognized?

Which accounting principle dictates that expenses should be recognized in the period in which they are incurred, regardless of when the cash payment occurs?

Which accounting principle requires that financial statements should be based on evidence that can be verified?

Which accounting principle states that an entity should use the same accounting methods and procedures from period to period?

Which of the following is an example of an internal accounting document?

Under which accounting principle should expenses be recognized in the same period as the revenue they help to generate?

Under the principle of conservatism, which direction are estimates biased?

According to the accounting equation, what is the formula for calculating owner's equity?

Which accounting principle requires that expenses should be recognized in the period in which they contribute to revenue?

What does the accounting principle of materiality emphasize?

According to the revenue recognition principle, when should revenue be recognized?

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