Introduction to Accounting

Which of the following statement is incorrect?

• Assets - Capital = Liabilities

• Liabilities + Capital= Assets

• Liabilities + Assets = Capital

• Assets - Liabilities = Capital

Which of the following is not an asset?

• Buildings

• Cash Balance

• Debtors

• Loan from K. Abdul

Which of the following is a liability?

• Machinery

• Creditors for goods

• Motor vehicles

• cash at bank

Which of the following statements is correct?

• We paid a creditor by cheque ( - Bank - Accounts payable)

• A debtor paid us £90 in cash (+ Cash + Accounts receivable)

• J. Hall lends us £500 by cheque (+ Bank - Loan from Hall)

• Bought goods on time (+ Inventory + Capital)

Given the following, what is the amount of Capital? Assets: Premises £20,000; Inventory £8,500; Cash £100. Liabilities: Accounts payable £3,000; Loan from A. Adams £4,000.

• £21,100

• £21,600

• £32,400

• £21,400

Which of the following is correct?

• (I) and (II) only

• (I), (II) and (III) only

• (II), (III) and (IV) only

• (I), (II) and (IV) only

What is the balance on the following account on 31 May 2017?

• A credit balance of £395

• A debit balance of £380

• A debit balance of £395

• There is a nil balance on the account

What would have been the balance on the account of C. De Freitas in MC17 on 19 May 2017?

• A debit balance of £265

• A credit balance of £95

• A credit balance of £445

• A credit balance of £265

Which of the following best describes a trial balance?

• It shows the financial position of a business

• It is a special account

• It shows all the entries in the books

• It is a list of balances on the books

Is it true that the trial balance totals should agree?

• No, there are sometimes good reasons why they differ

• Yes, except where the trial balance is extracted at the year end

• Yes, always

• No, because it is not a statement of financial position