A client receives a haircut by a self-employed hairdresser. The client pays for this with $20 cash.'
What kind of transaction is this from the client's perspective?
A) The sale of goods by the hairdresser
B) The sale of a service by the client
C) The purchase of goods by the hairdresser
D) The purchase of a service by the client
What kind of transaction is this from the hairdresser's point of view?
A) A cash sale
B) A credit sale
C) A cash purchase
D) A credit purchase
Which of the following terms would be used to classify a payment for electricity to heat the business premises of a firm of plumbers'?
A) Expense
B) Purchase
C) Receipt
D) Sales
Which of the following would be paid for by petty cash'?
A) Car repairs on the business owner's private vehicle
B) Packet of envelopes at local store
C) Paying a supplier for goods bought on credit
D) Wages and salaries
Which of the following transactions are associated with payroll?
A) Income from cash sale of computer used to calculate salaries
B) Postage and stationery, office expenses
C) Taxes on employee income, pension scheme payments, wages
D) Credit purchase of safety equipment for delivery staff
The manager of the research and development department of a large chemical business has been given control of the investigation of the potential healing properties of a naturally occurring compound found in the Amazonian rainforest.
1. State why the manager will need to ensure careful records are maintained of the receipts and payments associated with this project.
2. Explain why the manager will need to set up a system of authorisation and control for expenditure.
3. Explain why timing is important when dealing with financial transactions under such a project.