Note – Please take our quiz ‘Quiz 7 – Accounting Terms – Beginner’ on this page before going through the below answers. Only the top 3% of our audience score 10/10 in all of them.
- Name – Quiz 7 – Accounting Terms – Beginner
- Topic – Accounting Terms
- Answers with Explanations
Q1. Assets which are held for short period are called _____ assets.
Ans. Assets which are held for short period are called current assets. Such assets are expected to be realized in cash or consumed during the normal operating cycle of the business. For e.g. Cash and cash equivalents, Accounts receivable, Inventory, Short-term investments, Notes receivable, Prepaid expenses, etc.
Q2. _____ is the primary book of accounting.
Ans. Journal is the primary book of accounting. Journal is the book of original entry in which, after following the rules of debit and credit, all business transactions are recorded in chronological order.
Q3. _____ is used for recording small expenses.
Ans. Petty Cash Book is used for recording small expenses. It is a type of cash book that is used to record minor regular expenditures. For e.g. office teas, bus fares, fuel, newspapers, cleaning, pins, and causal labor, etc.
Q4. _____ entry is recorded on both sides of a cash book.
Ans. Contra Entry entry is recorded on both sides of a cash book. A contra entry is recorded when the debit and credit affect the same parent account and resulting in a net-zero effect on the account. These are transactions that are recorded between cash and bank accounts.
Q5. _____ is the voluntary payment given to a person for services delivered.
Ans. Honorarium is the voluntary payment given to a person for services delivered. These are generally services for which customs and traditions disallow a price to be set. Payments are made just as a gesture to thank or appreciate the person for rendering the services.
Q6. _____ is document made by the buyer as an offer for seller.
Ans. Purchase Order is document made by the buyer as an offer for seller. It is a commercial document and first official offer issued by a buyer to a seller indicating types, quantities, and agreed prices for products or services.
Q7. These assets don’t have a physical existence.
Ans. Intangible assets don’t have a physical existence. Intangible assets don’t physically exist, yet are they have a monetary value since they represent potential revenue. For e.g. Goodwill, patents, trademarks, and copyrights.
Q8. Debtors which are declared irrecoverable are called _____.
Ans. Debtors which are declared irrecoverable are called bad debts. Every time an entity realizes that it is unlikely to recover its debt from a receivable, it must ‘write off’ the bad debt from its books.
Q9. _____ means the funds brought in by the owner.
Ans. Capital means the funds brought in by the owner. Capital account is the account in which the owner’s investment is recorded plus the net income earned by the company minus the draws made by the owner.
Q10. Actual cost of commodity sold is called _____.
Ans. Actual cost of commodity sold is called COGS. It includes direct costs only and so it is the actual cost of the commodity sold.