CHAPTER 7+8 DOCUMENTS+RECORDING TRANSACTION

Paper FA-01 Name ___________________________

SKANS ID ____________________
Total Marks: 82

Encircle the correct option. No marks for cutting/overwriting or use of pencil

and red pen.

1. Which of the following is/are called source documents?

A. Invoice
B. Ledger
C. Purchase order
D. Sales order
E. Journal

2. A written offer made by business to customers to purchase goods or receive

services from business is called?
A. Sales invoice
B. Quotation
C. Sales order
D. Credit note

3. Sales invoice is a book of prime entry. Is this statement true?

A. True
B. False

4. Which of the following is recorded in purchase day book?

A. Sales of merchandise on cash
B. Purchase of merchandise on cash
C. Purchase of merchandise on credit
D. Sales of merchandise on credit

5. Business man use petty cash book to record?

A. Large amount of payments
B. Small amount of collection from customers
C. Large amount of collection from customers
D. Small amount of payments

6. A credit note is issued by the supplier to business when the business return
goods. Is this statement true or false?
A. True
B. False

Lamiyah Fawad Khan

 CHAPTER 7+8 DOCUMENTS+RECORDING TRANSACTION

7. If goods are to be paid on advance, the seller may issue which document?
A. A debit note
B. A statement
C. A pro-forma invoice
D. A goods received note

8. Which of the following source document is sent by the supplier to customer

on credit sales?
A. Sales invoice
B. Purchase order
C. Credit note
D. Debit note

9. Credit note can be also called as ‘negative invoice’. Is this true or false?
A. True
B. False

10. A credit sales invoice is a book of prime entry?

A. True
B. False

11. A cash sale is a book of prime entry?

A. True
B. False

12. One of Tesla’s customers has returned goods and Tesla is issuing a credit
note. In which record of prime entry will this be recorded?
A. The cash book
B. The sales return day book
C. The purchase return day book
D. The sales day book

13. For which of the following would a journal be used?

A. Posting adjustments to correct an error
B. Posting invoices to the receivable ledger
C. Posting a credit note from a supplier
D. Posting cash receipts

14. A document issued by a customer to supplier formally requesting him to

issue credit note is?
A. Purchase invoice
B. Sales invoice

Lamiyah Fawad Khan

 CHAPTER 7+8 DOCUMENTS+RECORDING TRANSACTION

C. Debit note
D. Quotation

15. Which of the following is a record of prime entry?

A. Receivable ledger control account
B. Journal
C. Purchase invoice
D. Trial balance

16. In which books of prime entry would the following transactions be entered?
A credit sale of $387 and a cash sale of $200 less 10% discount for cash payment.
A. The cash book and sales day book
B. The petty cash book and sales day book
C. The purchase day book and sales day book
D. The journal and cash book

17. Which of the following will normally be entered through the journal?
A. Credit purchase returns
B. Transfers between accounts
C. Receipts from credit customers
D. Expense payments

18. Harry maintains a return inwards book. Which of the following entries
would be acceptable for Harry to post to enter the information in the returns
book in the nominal ledger?
A. Dr. returns outwards, Cr. Receivables
B. Dr. returns inwards, Cr. Payables
C. Dr. Sales return, Cr. Receivables
D. Dr. Payables, Cr. Purchases

19. Where are the totals from the sales daybook posted within the nominal
ledger?
A. Cash, sale
B. Payables, purchases
C. Receivables, sales
D. cash, purchases

20. Which of the following statements is correct?

A. Purchase invoices are recorded in the purchase day book and summarized
and posted to the payable ledger
B. Cash received is recorded in the cash book and posted to the journal
C. Adjustments to the financial accounts are recorded in the cash book and
summarized and posted to the general ledger

Lamiyah Fawad Khan

 CHAPTER 7+8 DOCUMENTS+RECORDING TRANSACTION

D. sales invoices are recorded in the sales returns day book and are
summarized and posted to the receivable ledger

21. When entering invoices in the purchase day book. Elaine recorded an
invoice for $126 for motor expenses as $162. The day book has been posted
correctly to the general ledger.
What entry will correct the error?
A. Debit motor expenses $36 Credit payable control $36
B. Debit payable control $36 Credit motor expenses $36
C. Debit motor expenses $288 Credit payable control $288
D. Debit payable control $288 Credit motor expenses $288

22. Consider the following statements

(i) Double entry book keeping means that two sets of records are maintained.
(ii) In double entry book keeping we have a basic check on the accuracy of the
entries as the total value of the debit entries and the total value of the credit
entries should be equal.

Are the statements true or false?

A. Both statements are true
B. Statement (i) true, statement (ii) false
C. Both statements are false
D. Statement (i) false, statement (ii) true

23. Which of the following are source documents?

1. Sales day book
2. Credit note from supplier
3. Trial balance
4. Invoice
A. 1 and 3
B. 1 and 2
C. 2 and 3
D. 2 and 4

24. Which of the following statements about books of prime entry is true?
A. A business can only have a maximum of five books of prime entry
B. Source documents are recorded in the books of prime entry
C. Credit notes received are recorded in the sales return day book
D. the Journal is not a book of prime entry

Lamiyah Fawad Khan

 CHAPTER 7+8 DOCUMENTS+RECORDING TRANSACTION

25. Which prime entry record is used to record return outwards?

A. Sales return day book
B. The Journal
C. The cash book
D. The purchase return day book

26. Goods costing $500 have been purchased on credit and delivered to a
business. On inspection 25% of these goods are found to be faulty and these are
returned to the supplier.
Which of the following journal entries correctly records this return?
A. Dr. purchases $500, Cr. Payables $500
B. Dr. Payables $125, Cr. Purchases $125
C. Dr. cash $125, Cr. Purchases $125
D. Dr. Payables $500, Cr. Purchases $500

27. Helen buys goods for her business with a list price of $450 for cash. She
receives a 10% trade discount.
Which of the following journal entries correctly records this transaction?
A. Dr. purchases $450, Cr. Cash $450
B. Dr. purchases $405, Cr. Cash $405
C. Dr. purchases $450, Cr. Cash $405, Cr. Discount received $45
D. Dr. purchases $405, Cr. Cash $405

28. Which of the following source documents is summarized and posted to the
general ledger?
1. Sales return day book
2. Purchases day book
3. Cash received day book
4. Purchase return day book
A. 1 and 2 only
B. 1 and 4
C. 1, 3 and 4
D. All of the above

29. Which prime entry record is used to record direct debits to pay utility bills?
A. Sales returns day book
B. The journal
C. The cheque issued book
D. Purchase return day book

Lamiyah Fawad Khan

 CHAPTER 7+8 DOCUMENTS+RECORDING TRANSACTION

30. Goods costing $300 have been sold on credit to a customer. The customer has
returned 10% of these goods for a refund and a credit note has been issued for
these goods.
Which of the following journal entries correctly records this return?
A. Dr. Sales $30, credit receivables $30
B. Dr. Sales $30, credit cash $30
C. Dr. Receivables $30, credit sales $30
D. Dr. Sales $300, credit receivables $300

31. Which of the following would be recorded in the purchase day book?
A. Cheques paid to a supplier
B. Purchase invoices
C. Trade discounts received
D. Credit notes received

32. T talon had the following transactions.

1. Sale of goods on credit for $150 to F Rogit
2. Return of goods from B Blendigg originally sold for $300 in cash to B
Blendigg
What are the correct ledger entries to record these transactions?
A. Dr. Receivables $150
Dr. Sales return $300
Cr. Sales $150
Cr. Cash $300
B. Dr. Sales $150
Dr. cash $300
Cr. receivables $150
Cr. Sales return $300
C. Dr. Receivables $450
Cr. Sales $150
Cr. Sales return $300
D. Dr. Sales $150
Dr. Sales return $300
Cr. Cash $450
33. Cash received from credit customer will be posted as follows?
A. Dr. Receivables, Cr. Cash
B. Dr. Cash, Cr. Sales
C. Dr. Cash, Cr. Receivables
D. Dr. Sales, Cr. Receivables

34. Which of the following best explains the purpose of Journal?

A. It is a record of all transactions included in the ledger accounts
B. It is a record of all cash transactions included in the ledger accounts

Lamiyah Fawad Khan

 CHAPTER 7+8 DOCUMENTS+RECORDING TRANSACTION

C. It is a record of all cash transactions included in the ledger accounts

D. It is a record of all transactions included in the ledger accounts which have
not been captured in other books of prime entry

35. Which of the following is not an effective security procedure?

A. A key must be inserted into the cash register before it will operate. Keys are
held by authorized personnel
B. Cash is counted by a responsible person who works on the cash register
C. The cash reconciliation should be performed by a responsible person who
neither operates the cash register nor counts the cash
D. cash should be banked as promptly as possible

36. Which document lists the invoices, credit notes and amounts paid by a
business, and is sent by a supplier to customers, usually on a monthly basis?
A. Delivery note
B. Purchase order
C. Quotation
D. Statement

37. Narvinda buys goods from Jamal for $2,500. He returns half of the goods on
15 May.
Which of the following documents would be issued by Jamal for return of the
goods?
A. Invoice
B. Credit note
C. Debit note
D. Remittance advice

38. Nigel has discovered a mistake in recording a sales return transaction from
the sales return day book to the nominal ledger. He had debited the accounts
receivable account and credited the sales return account.
Which book of prime entry should be used to record the correction of error?
A. Sales return day book
B. Journal
C. Cash book
D. Sales day book

39. Pimlico & Co. owes vaxhall for some goods it recently bought. Pimlico & Co.
are settling the invoice early and are getting a discount.
What is the correct double entry for this in Pimlico & Co’s books?
A. Debit Vaxhaul, credit bank, credit discount received

Lamiyah Fawad Khan

 CHAPTER 7+8 DOCUMENTS+RECORDING TRANSACTION

B. Debit Vaxhaul, debit discount received, credit bank.

C. Debit bank, credit Pimlico & Co., credit discount allowed
D. Debit bank, debit discount allowed, credit Pimlico & Co.

40. Victoria Company wishes to buy goods from Paddington and company
Which of the following is most likely flow of documents to complete the
purchase?
A. Purchase order, delivery note, goods received note, cheque requisition,
invoice
B. Purchase order, delivery note, goods received note, invoice, cheque
requisition.
C. goods received note, Purchase order, delivery note, invoice, cheque
requisition.
D. Purchase order, goods received note, delivery note, cheque requisition,
invoice.

41. Which document is usually sent every month from the supplier to the
customer, listing all the transactions between them during that month?
A. Invoice
B. Receipt
C. statement
D. Credit note.

______________The End_______________

Lamiyah Fawad Khan