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Chapter 4: Ledger accounting & double entry

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Chapter 4: Ledger accounting & double entry
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11 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Richard is a VAT registered trader whose sales and purchases carry VAT at the standard rate of 20%. Richard sells a customer goods on credit for £4,800 exclusive of VAT. The double entry to record this transaction is:

Debit Sales £4,800, Debit VAT £960, Credit Receivables £5,760

Debit Sales £4,000, Debit VAT £800, Credit Receivables £4,800

Debit Receivables £5,760, Credit Sales £4,800, Credit VAT £960

Debit Receivables £4,800, Credit Sales £4,000, Credit VAT £800

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What transaction is represented by the entries: Debit rent, Credit landlord?

The receipt of rental income by the business

The issue of an invoice for rent to a tenant

The receipt of an invoice for rent payable by the business

The payment of rent by the business

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

In double-entry bookkeeping, which of the following statements is true?

Credit entries decrease liabilities and increase income

Debit entries decrease income and increase assets

Credit entries decrease expenses and increase assets

Debit entries decrease expenses and increase assets

4.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

A debit balance of £3,000 brought down on A Ltd's account in B Ltd's books means that B Ltd owes A Ltd £3,000

True

False

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Crimson plc paid an invoice from a credit supplier and took advantage of the early settlement discount offered. When the invoice was received and recorded, Crimson plc did not expect to take the discount.


The journal entry to record the payment of the invoice is:

Debit Payables, Credit Purchases, Credit Cash at bank account

Debit Payables, Credit Cash at bank account

Debit Cash at bank account, Debit Purchases, Credit Payables

Debit Cash at bank account, Credit Purchases, Credit Payables

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Winn Ltd has opening trade payables of £24,183 and closing trade payables of £34,655. Purchases for the period totalled £254,192 (£31,590 relating to cash purchases).


Total payments recorded in the payables ledger for the period were:

£212,130

£233,074

£243,720

£264,664

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Media Image

A bakery business, which is registered for VAT, issued the following invoice to one of its customers:

Assuming the VAT rate is 20% and that the invoice amounts are exclusive of VAT, what amount of VAT should have been charged on the invoice?

£360

£300

£285

£342

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