AS Revision Quiz

A business’s year end is 31 March. On 31 March 2016 the business received an order from a credit customer. The goods were not sent to the customer until 5 April 2016. This sale was notincluded in the financial statements for the year ended 31 March 2016.

Which accounting concept(s) are being applied?

1 business entity

2 realisation

3 substance over form

• 1 and 2

• 1 only

• 2 and 3

• 2 only

Why does a business charge depreciation on its non-current assets?

• to retain profits for the replacement of worn out assets

• to show the value of the assets in the statement of financial position

• to show when an asset needs replacing

• to spread the cost of the assets over their useful lives

How is depreciation calculated using the straight-line method?

• as a fixed percentage of the asset’s net book value

• as a fixed percentage of the asset’s original cost

• as a variable percentage of the asset’s net book value

• as a variable percentage of the asset’s original cost

A business depreciates its machinery at 10% per annum using the straight-line method on a month-by-month basis. The business’s financial year end is 30 June.

Machinery which had cost $6600 on 1 April 2014 was sold on 30 November 2015. The profit on sale was $350.

What were the sale proceeds?

• $5150

• $5425

• $5850

• $6125

The table shows information relating to the non-current assets of a business.

$

net book value at beginning of year 28 000

net book value at end of year 25 000

depreciation charge for the year 4 000

disposals at net book value 9 000

What is the cost of the additions in the year?

• $2000

• $6000

• $10 000

• $16 000

A purchases ledger control account has been reconciled with the purchases ledger balances as follows.

balance of the control account $70 000

total of a page in the purchases journal not posted to general ledger $2 000

discount allowed by trade payables not posted to the purchases ledger $1 500

total of balances in the purchases ledger $73 500

Which value for trade payables should be shown in the statement of financial position?

• $68 000

• $70 500

• $72 000

• $73 500

Trade receivable balances at the start of a period were $30000 and were $38000 at the end. During that period:

credit sales $60 000

irrecoverable debt written off $1 000

customer discounts allowed $2 000

How much did the company receive from its customers in the period?

• $49 000

• $52 000

• $65 000

• $68 000

At the start of the year the provision for doubtful debts was $19 600. During the year irrecoverable debts of $12 300 were written off. The provision for doubtful debts at the year end was $15 500.

What was the net effect of these items on the profit for the year?

• $4100 decrease

• $4100 increase

• $8200 decrease

• $8200 increase

The following financial information is available.

inventory at 1 January 2016 $800

inventory at 31 December 2016 $1 010

purchases $9 260

carriage inwards $130

revenue $18 000

discount received $700

other costs $3 880

What are the values of gross profit and profit for the year?

• gross profit $8820

  profit for the year $4240

• gross profit $8820

  profit for the year $5640

• gross profit $9080

  profit for the year $5900

• gross profit $9520

  profit for the year $5640

The following information is extracted from the records of a business.

at 1 January 2016 rent paid in advance 4 000

during the year ended 31 December 2016 rent paid 41 000

at 31 December 2016 rent paid in advance 7 000

How much will be charged for rent in the income statement for the year ended 31 December 2016?

• $34 000

• $38 000

• $41 000

• $44 000