ITA W2 review

Payables represent money the business owes

• True

• Fause

Which of the following would a decrease in the allowance for receivables result in?

• An increase in liabilities

• A decrease in liabilities

• A decrease in net profit

• An increase in net profit

At 1 January 20x1, there was an allowance for receivables of $3,000. During the year, $1,000 of debts were written off as irrecoverable, and $800 of debts previously written off were recovered. At 31 December 20x1, it was decided to adjust the allowance for receivables to 5% of receivables which are $20,000.

what figure should be included in the P/L statement as the receivables expense for the year?

debit/credit________________?

which of the following calculates a sole trader's net profit for a period?

• closing net assets+ drawings- capital introduced -opening net assets

• closing net assets -drawings+ capital introduced-opening net assets

• closing net assets -drawings - capital introduced-opening net assets

• closing net assets +drawings +capital introduced- opening net assets

Annie is a sole trader who does not keep full accounting records. The following details relate to her transactions with credit customers and suppliers for the year end 30 June 20X6: $,000

Tr. R. 1. July 20x5 130

Tr. P. 1. July 20x5. 60

cash received from customer. 686.4

cash paid to suppliers. 302.8

discount received 2.96

Tr. R. 30 June 20x6. 181

Tr. P. 30 June 20x6. 84

what figure should appear for purchases in Annie's P/L statement for the year end 30 June 20x6?

which two of the following are differences between sole traders and limited liability companies?

• a sole trader's financial statements are private, a company's financial statements are sent to shareholders and may be publicly field.

• only companies that have capital invested into the business.

• a sole trader is fully and personally liable for any losses that the business might make.

The following transactions relate to Rashid's electricity expense ledger account for the year ended 30 June 20x9.

prepayment bought forward. 550

cash paid. 5,400

accruals carried forward. 650

what amount should be charged to the statement of P/L in the year ended 30 June 20X9 for electricity.

• 6600

• 5400

• 5500

• 5300

At 30 June 20x5 a company's allowance was $39,000. At 30 June 20x6 trade receivables totalled $517,000. it was decided to write off debts totalling $37,000. The receivables allowances was to be adjusted to an amount equivalent to 5% of the trade receivables based on the past events.

What figure should appear in the statement of P/L for the year ended 30 June 20X6 for these items