Revision on Accounting
1. Which error may cause an increase in the gross profit?
A closing stock under valued
B opening stock omitted from the cost of sales
C purchases recorded before deduction of trade discount
D sales invoices omitted from the sales journal
2. X buys goods on credit from Y.
What is the name for the document used by X to settle the liability to Y?
A. cheque
B. credit note
C . receipt
D . statement of account
3. In which book of account is cash discount received first recorded?
A. cash book
B. purchases ledger
C. sales journal
D. sales ledger
4. X sells goods with a list price of $5000 to a credit customer. The customer is allowed a 5% trade discount and a further 21/2% cash discount if payment is within 20 days of the invoice date.
What amount should be credited to the Sales account of X?
A $4631 B $4750 C $4875 D $5000
5. Which should be recorded in the general journal?
A debt written off as bad
B goods returned to supplier
C goods sold for cash
D trade discount allowed to customer
6. Which account could have a credit balance?
A bank
B carriage inwards
C carriage outwards
D cash
7. A bookkeeper recorded the receipt of a cheque for $245 in the cash book as $425.
What kind of error was this?
A commission
B omission
C original entry
D principle
8.A business received $123 from X. The entry in the cash book was correct but it was debited as
$132 in X’s account.
What is the difference between the totals of the trial balance?
A $9
B $18
C $255
D $264
9. Which item is capital income?
A cash received from the sale of office equipment
B cheque received from the sale of stock
C discounts received from trade creditors
D rent received from tenants
10.A business buys a delivery van for $12 000. Its estimated useful life is four years, after which its
scrap value is estimated to be $4000. Depreciation is charged on the straight line basis.
What is the annual amount of depreciation?
A $1000 B $2000 C $3000 D $8000
11. Two companies each purchase a car for $10 000 at the beginning of year 1. Company G uses the
straight line method of depreciation at a rate of 15% per annum, while Company H uses the
reducing balance method at a rate of 20% per annum.
What will be the difference in the depreciation charge between the two companies for year 2?
A $100 greater for G
B $100 greater for H
C $500 greater for G
D $500 greater for H
12.A trader’s net profit was calculated at $27 000. Later it was found that depreciation of $2000 had been omitted and that the rent payable included a prepayment of $750.
What is the correct net profit?
A $24 250 B $25 750 C $28 250 D $29 750
13. A cheque received by X from a debtor is later dishonoured. How is this shown in X’s control
accounts?
A credit in Purchases Ledger Control account
B credit in Sales Ledger Control account
C debit in Purchases Ledger Control account
D debit in Sales Ledger Control account
14.Entries in control accounts are made from
A bank statements.
B books of original entry.
C ledger accounts.
D sales invoices.
15.X pays $20 000 for the purchase of a business. The purchase price includes equipment worth
$9000 and stock valued at $4000. X deposits $2000 of his own money into the business bank
account.
What is X’s capital?
A $13 000 B $15 000 C $20 000 D $22 000
16. Which error may cause an increase in the gross profit?
A closing stock under valued
B opening stock omitted from the cost of sales
C purchases recorded before deduction of trade discount
D sales invoices omitted from the sales journal
17. Which is a current asset?
A purchase ledger balances
B rent received in advance
C sales ledger balances
D wages accrued
18. How are fixed assets normally shown in a Balance Sheet?
A. at net book value
B. at net realisable value
C. at replacement cost
D. at scrap value
19. A business has working capital of $6000 at 31 January. On 2 February debtors pay $1150 in full settlement of debts $1200 and damaged stock costing $200 is written off.
What is the working capital at close of business on 2 February?
A $4600 B $5750 C $6950 D $7150
20. In the absence of a partnership agreement how should profits be shared?
A equally
B equally after interest on partners’ capitals
C equally after interest on partners’ loans
D equally after interest on partners’ capitals and partners’ salaries
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A closing stock under valued
B opening stock omitted from the cost of sales
C purchases recorded before deduction of trade discount
D sales invoices omitted from the sales journal
2. X buys goods on credit from Y.
What is the name for the document used by X to settle the liability to Y?
A. cheque
B. credit note
C . receipt
D . statement of account
3. In which book of account is cash discount received first recorded?
A. cash book
B. purchases ledger
C. sales journal
D. sales ledger
4. X sells goods with a list price of $5000 to a credit customer. The customer is allowed a 5% trade discount and a further 21/2% cash discount if payment is within 20 days of the invoice date.
What amount should be credited to the Sales account of X?
A $4631 B $4750 C $4875 D $5000
5. Which should be recorded in the general journal?
A debt written off as bad
B goods returned to supplier
C goods sold for cash
D trade discount allowed to customer
6. Which account could have a credit balance?
A bank
B carriage inwards
C carriage outwards
D cash
7. A bookkeeper recorded the receipt of a cheque for $245 in the cash book as $425.
What kind of error was this?
A commission
B omission
C original entry
D principle
8.A business received $123 from X. The entry in the cash book was correct but it was debited as
$132 in X’s account.
What is the difference between the totals of the trial balance?
A $9
B $18
C $255
D $264
9. Which item is capital income?
A cash received from the sale of office equipment
B cheque received from the sale of stock
C discounts received from trade creditors
D rent received from tenants
10.A business buys a delivery van for $12 000. Its estimated useful life is four years, after which its
scrap value is estimated to be $4000. Depreciation is charged on the straight line basis.
What is the annual amount of depreciation?
A $1000 B $2000 C $3000 D $8000
11. Two companies each purchase a car for $10 000 at the beginning of year 1. Company G uses the
straight line method of depreciation at a rate of 15% per annum, while Company H uses the
reducing balance method at a rate of 20% per annum.
What will be the difference in the depreciation charge between the two companies for year 2?
A $100 greater for G
B $100 greater for H
C $500 greater for G
D $500 greater for H
12.A trader’s net profit was calculated at $27 000. Later it was found that depreciation of $2000 had been omitted and that the rent payable included a prepayment of $750.
What is the correct net profit?
A $24 250 B $25 750 C $28 250 D $29 750
13. A cheque received by X from a debtor is later dishonoured. How is this shown in X’s control
accounts?
A credit in Purchases Ledger Control account
B credit in Sales Ledger Control account
C debit in Purchases Ledger Control account
D debit in Sales Ledger Control account
14.Entries in control accounts are made from
A bank statements.
B books of original entry.
C ledger accounts.
D sales invoices.
15.X pays $20 000 for the purchase of a business. The purchase price includes equipment worth
$9000 and stock valued at $4000. X deposits $2000 of his own money into the business bank
account.
What is X’s capital?
A $13 000 B $15 000 C $20 000 D $22 000
16. Which error may cause an increase in the gross profit?
A closing stock under valued
B opening stock omitted from the cost of sales
C purchases recorded before deduction of trade discount
D sales invoices omitted from the sales journal
17. Which is a current asset?
A purchase ledger balances
B rent received in advance
C sales ledger balances
D wages accrued
18. How are fixed assets normally shown in a Balance Sheet?
A. at net book value
B. at net realisable value
C. at replacement cost
D. at scrap value
19. A business has working capital of $6000 at 31 January. On 2 February debtors pay $1150 in full settlement of debts $1200 and damaged stock costing $200 is written off.
What is the working capital at close of business on 2 February?
A $4600 B $5750 C $6950 D $7150
20. In the absence of a partnership agreement how should profits be shared?
A equally
B equally after interest on partners’ capitals
C equally after interest on partners’ loans
D equally after interest on partners’ capitals and partners’ salaries
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