PDB (test 1)

Question 1

Who do we buy goods from?

Answer 1

Creditors

Question 2

What document is issued when goods are bought on credit?

Answer 2

Purchases invoice

Question 3

At the end of each period, the total of the credit purchases is posted where?

Answer 3

To the DEBIT of the Purchase account in the General ledger.

Question 4

The difference between sales and sales

Answer 4

Sales in POA- It is the main Inventory sold to the customer of the business. The main source of income.

Sales- It is just an extra income. It is a non-current asset because non current asset is not apart of the inventory.

Question 5

The difference between Purchases and Purchases

Answer 5

Purchases in POA- Goods bought with the intention to resell by cash or credit.

Purchases- buying a noncurrent asset without the intention to resell.