GWL - Revenue Manual Quiz – GWL

What is the primary purpose of recognizing accounts receivable in the financial statements of GWCL?

To manage cash flow

To maximize company profits

To estimate the amount collectible from customers

To comply with tax regulations

Which accounting principle justifies the estimation of bad debt expenses at GWCL?

Accrual Principle

Revenue Recognition Principle

Materiality Principle

Matching Principle

What is the accounting treatment for interest income received but not yet recorded by GWCL?

DR Bank Account; CR Interest Income

DR Cash; CR Interest Income

DR Interest Receivable; CR Interest Income

DR Cash; CR Interest Receivable

What is required before any alterations to payroll can be made?

Automatic update by the payroll software

Written authorization and initials from responsible officials

Verbal approval from the payroll accountant

Approval from the HR department only

What is the appropriate accounting treatment for stores issued for maintenance work?

DR Capital Expenditure; CR Stores Account

DR Stores Account; CR Capital Expenditure

DR Maintenance Expense; CR Stores Account

DR Stores Account; CR Maintenance Expense

Which department is responsible for the pre-audit of payrolls?

The Payroll Department

The Accounts Payable Department

The Human Resource Department

The Internal Audit Department

How are payroll deductions accounted for when preparing the payroll?

As a liability

As an expense

As income

As equity

Which of the following is NOT a typical reason for writing off a bad debt at GWCL?

Demolished premises

Statute-barred debts

Untraceable accounts

Disputed water bills

Under what condition should GWCL apply a change in accounting policy?

If it provides more accurate financial information

Only if it is required by a new standard

When recommended by external auditors

If it simplifies the accounting process

Which of the following payroll actions requires a Journal Voucher entry?

Accounting for employer's SSF contribution

Transferring an employee between regions

Making salary advances

Issuing a new employee contract

How are "Depreciation Expenses" treated in GWCL’s Chart of Accounts?

As an Equity item

As an Asset

As a Liability

As an Expense

If GWCL estimates GH₵10,000 of its receivables will be uncollectable, what is the correct journal entry?

DR Accounts Receivable GH₵10,000; CR Provision for Bad Debts GH₵10,000

DR Cash GH₵10,000; CR Bad Debts Expense GH₵10,000

DR Provision for Bad Debts Expense GH₵10,000; CR Provision for Bad Debts GH₵10,000

DR Bad Debts Expense GH₵10,000; CR Accounts Receivable GH₵10,000

Which of the following is NOT a responsibility of the Cash Management (Treasury) function at GWCL?

Scrutinizing bank statements and reconciling accounts

Securing loans at favorable interest rates

Forecasting cash inflows and outflows

Managing the payroll process

What is included in the "Notes to the Accounts" in GWCL’s financial reporting?

A detailed list of all assets

A breakdown of employee salaries

Only a summary of the company’s annual budget

Detailed explanations of accounting policies and additional information on specific items

What is a key component of an efficient cash management policy at GWCL?

Ensuring timely payments to creditors

Reducing cash reserves

Increasing fixed asset investments

Minimizing external borrowing

What is the correct accounting entry for the inter-branch transfer of stores within GWCL?

DR Stores Account; CR Inter-Branch Account

DR Expenditure Account; CR Stores Account

DR Inter-Branch Account; CR Stores Account

DR Cash; CR Inter-Branch Account

In GWCL's cash management, what is the purpose of monitoring cash inflows and outflows?

To sustain payments and secure inflows from various sources

To delay payments to creditors

To reduce the number of cash transactions

To increase cash reserves

How does GWCL classify chemicals within its stores and inventory accounting system?

As finished goods

As non-current assets

As general expenses

As inventory with specific ledger codes for different types of chemicals

How is a cash payment of salary recorded in the payroll system?

Through a direct bank transfer

Using a payment voucher signed by the employee

No record is kept for cash payments

As a bank transaction

If an inventory count reveals a stock shortage of GH₵2,000, what is the appropriate action?

Ignore the shortage until the next inventory count

DR Stores Account; CR Stock Shortage Account

DR Stock Shortage Account; CR Stores Account

Write off the shortage as a loss

What basis of accounting is used in GWCL’s revenue accounting system?

Modified cash basis

Accrual basis

Single-entry basis

Cash basis

What should be done with petty cash funds and cash in various regions and cost centers?

Invest them in short-term securities

Exclude them from cash management

Include them as part of cash because they are used for current operating expenses

Transfer them to the main office

What should be the maximum percentage of total deductions from an employee’s gross pay according to GWCL policy?

0.2

0.3

0.5

0.4

Which of the following is a key benefit of using the perpetual inventory method at GWCL?

It eliminates the need for annual stock taking

It improves the accuracy of inventory records and helps reveal discrepancies sooner

It simplifies the accounting process for stores

It reduces the overall cost of inventory

Which of the following is the correct entry when a cash shortage is identified?

DR Receivables; CR Cash Shortages

DR Cash Shortages; CR Receivables

DR Cash Shortages; CR Cash

DR Cash; CR Cash Shortages

If GWCL receives a bill for debt servicing in a foreign currency and the exchange rate fluctuates before payment is made, resulting in an additional GH₵10,000 liability, how is this recorded?

DR Other Income Account; CR Exchange Losses Expense Account

DR Exchange Losses Expense Account; CR Cash Account

DR Appropriate Loan Account; CR Exchange Losses Expense Account

DR Cash Account; CR Other Income Account

Under what circumstances can an exchange difference be capitalized according to the accounting manual?

When there is a severe devaluation affecting liabilities on recent asset acquisition

When the exchange difference affects general revenue

When the exchange difference is immaterial

When the exchange difference arises from the translation of financial statements

When preparing financial statements, what entry should GWCL make if the Provision for Doubtful Debts needs to be adjusted upwards by GH₵7,000?

DR Accounts Receivable GH₵7,000; CR Provision for Bad Debts GH₵7,000

DR Cash GH₵7,000; CR Provision for Bad Debts GH₵7,000

DR Provision for Bad Debts GH₵7,000; CR Bad Debts Expense GH₵7,000

DR Provision for Bad Debts Expense GH₵7,000; CR Provision for Bad Debts GH₵7,000

How should a Region account for GH₵10,000 worth of chemicals procured by Head Office on its behalf?

DR Stock; CR Cross Subsidy Account

DR Stock; CR Inter-Branch Account

DR Cross Subsidy Account; CR Stock

DR Inter-Branch Account; CR Stock

What is the first step in processing payroll after receiving information from Human Resources?

Preparing an Accrual Journal Voucher

Issuing cheques

Distributing pay slips

Pre-auditing the payroll

Which of the following is NOT considered cash for accounting purposes?

Bank drafts

Money orders

Certified cheques

Postage stamps

What should be done when an employee receives a salary advance?

Record it as a permanent deduction

Wait until the end of the fiscal year to reconcile

Record it under Other Deductions

Deduct the amount from their gross pay immediately

GWCL plans to invest surplus cash for 90 days. Which of the following investments is appropriate?

Long-term bonds

Company stocks

Real estate

Fixed Deposits

What should be done with payroll records after they cease to be current?

Store securely for the prescribed period and then dispose of them as per company policy

Store off-site without any specific retention period

Keep indefinitely

Shred immediately

How is the balance between total debtors and individual customer accounts maintained in GWCL’s revenue accounting system?

By conducting monthly reconciliations

By adjusting entries annually

By using an automated system with no manual intervention

By relying on external audits

What is the primary purpose of a perpetual inventory system at GWCL?

To maximize inventory turnover

To minimize the cost of goods sold

To ensure a continuous record of materials and supplies received, issued, and on hand

To reduce the frequency of physical stock counts

What is the correct journal entry for transferring funds from a Region’s remittance account to Head Office?

DR Revenue; CR Cross Subsidy Account

DR Cash; CR Bank Account

DR Cross Subsidy Account (Regions); CR Bank Account

DR Bank Account; CR Cross Subsidy Account (Regions)

If an aging schedule shows GH₵20,000 in receivables past due by 121–180 days, what is the estimated uncollectable amount according to GWCL’s policy?

4000

10000

2000

5000

What does the Provision for Doubtful Debts account represent in GWCL's accounting?

An account to track overdue payments

A reserve fund for future bad debts

A liability for anticipated future expenses

A contra account to Accounts Receivable to estimate uncollectable debts

A debit note of GH₵5,000 is issued for fuel supplied by Region A to Region B. What is the correct journal entry for Region A?

DR Stock; CR Inter-Branch Account

DR Inter-Branch Account; CR Stock

DR Inter-Branch Account; CR Bank Account

DR Bank Account; CR Inter-Branch Account