Advanced Bookkeeping Flashcards
6 cards from real AAT L3 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Advanced Bookkeeping flashcards as text
Capital introduced by the owner of a business is recorded as:
Answer: Debit Bank, Credit Capital
When the owner introduces capital, the bank account increases (debit Bank) and the capital/equity account increases (credit Capital), reflecting the owner's investment in the business.
A credit balance on a trade payable account means:
Answer: The business owes money to the supplier
Trade payable accounts are liability accounts; a credit balance indicates the business still owes that amount to the supplier — the normal balance for a payable is credit.
Which of the following is NOT a book of prime entry?
Answer: The general ledger
Books of prime entry (daybooks) are where transactions are first recorded: sales day book, purchases day book, returns day books, cash book, and petty cash book. The general ledger is the main ledger, not a daybook.
Under the consistency concept, an entity should:
Answer: Use the same accounting policies year on year unless there is good reason to change
The consistency concept requires the same accounting policies and methods to be applied consistently from one period to the next, ensuring comparability of financial statements over time.
Goods taken by the owner for personal use (drawings in kind) are recorded as:
Answer: Debit Drawings, Credit Purchases
When the owner takes goods for personal use, the drawings account is debited (reducing equity) and the purchases account is credited (reducing the cost of goods available for sale), removing the goods from business expenses.
Which of the following is shown on the debit side of the trial balance?
Answer: Trade receivables
Trade receivables are assets — assets normally have debit balances on the trial balance. Liabilities (trade payables, loans) and equity (share capital) have credit balances.