Bookkeeping Questions
Money owed by a company to its
1. Which of the following is an item of
working capital?
a. Fixed assets
b. Long-term investments
c. Accounts receivable
d. Bonds payable
2. To which account in the Balance Sheet is
the net income or net loss
transferred to at the end of the accounting
period?
a. Cash
b. Accounts Receivable
c. Inventory
d. Sample Accounts Payable Questions
3. Accounts Payable is classified as a/an
___________ in the _____________.
a. Current asset; Balance Sheet
b. Current liability; Balance Sheet
c. Expense; Income Statement
d. Revenue; Income Statement
4. Which of the following documents
authorizes the purchase transaction?
a. Credit memo from supplier
b. Invoice or bill from supplier
c. Purchase order
d. Purchase requisition
Accounts Receivable Questions
5. Brown Glory Corp. has sales revenue of
$150,000, sales discounts of
$12,000, sales returns allowances of
$24,000, and cost of goods sold of
$60,000. What would be the net sales
revenue of Brown Glory Corp.?
a. $102,000
b. $54,000
c. $90,000
d. $114,000
6. What is meant by accounts receivable?
Money owed to a company by its debtors
a. Money owed by a company to its
creditors
b. Money owed to a company by its
employees
c.
vendors
Answers:
1. The correct answer is C.
Explanation: Working capital consists of
current assets and current liabilities.
2. The correct answer is A.
Explanation: The amount of net income or net
loss is transferred to Retained Earnings,
which is an equity account.
3. The correct answer is B.
Explanation: Accounts payable is a short-term
obligation. Hence, it is classified as a current
liability in the Balance Sheet.
4. The correct answer is C.
Explanation: A purchase order is a buyer-
generated document that authorizes the
purchase transaction, and when the seller
accepts the terms and conditions indicated
therein, it becomes a binding contract
between the seller and the buyer.
5. The correct answer is D.
Explanation: Net sales revenue is the amount
left after deducting sales discounts and sales
returns and allowances from gross sales
revenue. Cost of goods sold is deducted from
net sales revenue to arrive at gross profit.
Gross Sales Revenue – Sales Discounts – Sales
Returns and Allowances
$150,000 – $12,000 – $24,000 = $114,000.
6. The correct answer is A.
Explanation: Accounts receivable is defined
as money owed to a company by its debtors.
When a company sells goods on credit, it
creates a current asset by the name of
accounts receivable and books the
corresponding revenue. When the cash is
received, the asset is reversed.