ACC101

Which of the following can be found on both the income statement and on the balance sheet

• Drawings

• Net Profit

Office equipment was purchased for $155,000. Its useful life is 5 years and the residual value is $20,000.

What is the depreciation expense for the second year?

• 27 000

• 54 000

Office equipment was purchased for $155,000. Its useful life is 5 years and the residual value is $20,000.

The total net book value at the beginning of year 4 is

• 74 000

• 81 000

• 101 000

Credit Committee is A group of people responsible for assessing the credit standing and ability to repay debt of prospective borrowers of a lending institution.

If the members of a business organization form its management and credit committees, the entity (or organization) can best be described as a

• Sole Trader

• Partnership

• Cooperation

• Cooperative

Control accounts(Sales and Purchases control)are kept in order to assist management in

• Locating Errors

• increasing profits

Mrs Allen invested $20 000,Mrs Brown invested $5000 and Mr Cable invested $5 000 in the same business. The loss sustained during the year was $ 1000.

The Partnership Agreement is silent on the item of losses, although profits are to be split in the ratio 2:2:1 in favor of Allen, Brown and Cable respectively.

How much of the loss must be borne by Mr Cable?

• $200

• $240

• $300

• $400

Tom, Percy and John formed a partnership and agreed that profits were to be shared in the ratio 1:1:2 respectively. The net profit for the year was $18 900.

What was John's share of the profit?

• $4725

• $9450

• $14175

• $18900

You are required to reconcile the debit balance in the Cash Book with the balance found in the Bank Statement. A credit entry recorded on the Bank Statement, but not in the Cash Book should be

[Please to remember what credit entry means to the bank, that is there books and a credit entry was made to your account]

• Added to the Cash Book balance

• Deducted from the Cash Book balance

• Added to the balance from the Bank Statement

• Deducted from the balance from the Bank Statement

Edward Broomes has just started a business. He owns a motor car valuing $20,000 and a truck valuing $45,000. He decides to bring the truck into the business. In determining the total value of the business’s fixed assets he does not include the value of the motor car. Which accounting concept is Edward Broom observing?

[ONLY THE TRUCK]

• Money measurement

• Separate entity

Fruit and Cake are in partnership. At the end of the trading period Fruit has a debit balance of $1 525 on her account. What is the significance of the balance on Fruit’s current account?

[Think about the nature of Capital Accounts, think about how they work before answering. Which side the owners contribute from and which side they receive from]

• Fruit is entitled to $1 525 from the partnership

• Fruit has overdrawn her profits by $1 525