Double Entry Trial Bal w04/05

The owner of a business requires a statement to show the trading results for a financial year.

Which accounting statement is used?

• Statement of Financial Position

• Capital account

• Income Statement

• Trial balance

Which will give the cost of goods sold?

• opening inventory – purchases + closing inventory

• purchases + closing inventory – opening inventory

• opening inventory + purchases – closing inventory

• purchases – opening inventory – closing inventory

Karl’s trial balance for 31 December 2003 includes the following balances.

sales $3 200

stock at 1 January 2003 $200

purchases $1 800

expenses $800

Karl’s stock at 31 December 2003 was $300.

What is Karl’s profit for the year?

• $400

• $500

• $700

• $1500

Which is a liability?

• items of value owned by a business

• money owed by the business

• money owed to the business

• total expenditure of the business

What information does the Statement of Financial Position of a business show?

• capital

• expenses

• gross profit

• sales

Which item in a trial balance will appear in the Income Statement?

• bank account

• bank charges

• bank loan

• bank overdraft

What would be classed as drawings in the accounting records of a sole trader?

• cash withdrawn from bank for office use

• cash withdrawn from bank for petty cash

• cash withdrawn from bank for trader’s business expenses

• cash withdrawn from bank for personal use

Why should a trader record all the financial information about her business?

• to calculate her bank balance

• to calculate her trade payables

• to calculate her drawings

• to calculate her profit

Which is a liability of a business?

• (petty) cash

• rented premises

• trade payables

• trade receivables

A business has the following assets and liabilities.

$

motor vehicles 10 000

Trade Payables 2 000

Inventory 3 000

bank overdraft 1 500

Trade Receivables 1 000

Cash 500

What is the capital?

• $10 000

• $11 000

• $14 000

• $14 500