Quiz: Fundamentals of Accounting

Increases the bank statement balance No impact on the bank statement balance Increases the cash book balance Decreases the bank statement balance

Purchases Account and Cash Account. Cash Account and Sales Account. Purchases Account and Creditors Account. Bank Account and Debtors Account.

INR 800,000 INR 600,000 INR 200,000 INR 1,000,000

Compensating errors. All of these errors are revealed by the trial balance. Errors of principle. Errors of omission.

By subtracting total expenses from gross profit By adding gross profit to total expenses By adding total expenses to gross profit By subtracting gross profit from total expenses

Only large cash transactions. Transactions made via bank transfer. All cash receipts and cash payments. Only cash sales transactions.

A summary of sales only. The first entry in bookkeeping. A detailed list of all transactions. A book or other collection of financial accounts.

As a liability in the balance sheet As an expense in the profit and loss account As revenue in the profit and loss account As an asset in the balance sheet

To the trading account To the profit and loss account To the balance sheet To the cash flow statement

Conservatism. Consistency. Full Disclosure. Materiality.