POA Mock Examinations - Paper 1

Owner's equity can decrease when....

• the business sells its motor van and deposits the proceeds into the busness' bank account

• the business repays a bank loan

• the proprietor draws out business cash to pay for a personal loan

• the proprietor draws out from the business bank account for office use

Which of the following is not an expense?

• Carriage on Purchases

• Carriage on Sales

• Discount Allowed

• Discount Received

Which of the following is NOT shown in the Profit and Loss account

• Carriage on Purchases

• Carriage on Sales

• Discount Allowed

• Discount Received

What is the name of the book of original entry used to record the sale of fixed assets on credit?

• General Journal

• Returns Outwards Journal

• Sales Journal

• Sales Returns Journal

Rate of turnover is given by.....

• sales divided by stock

• cost of sales divided by average stock

• sales at cost divided by closing stock

• sales divided by purchases

A supplier's account in the books of a business shows a credit balance of $780. What does this mean?

• The business owes the supplier $780

• The business has paid the supplier $780

• The supplier owes the business $780

• The supplier has paid the business $780

The Cash Book shows an overdrawn balance of $920 but the Bank Statement showed a credit balance $1 120. Which of the following could have caused the difference?

• A credit transfer of $2 040

• A standing order of $200

• An uncredited deposit of $2 040

• An unpresented cheque $200

The discount received $35 was wrongly recorded as discount allowed. What is the effect on the net profit ?

• Net Profit is overstated by $35

• Net Profit is overstated by $70

• Net Profit is understated by $35

• Net Profit is understated by $70

$57 paid for rent was entered in both the Rent Account and the Bank Account as $75. What are the double entries required to correct these errors?

• Debit Bank $18 Credit Rent $18

• Debit Bank $57 Credit Rent $18

• Debit Rent $18 Credit Bank $18

• Debit Rent $57 Credit Bank $57

A fixed asset which has a book value of $4 600 is sold for

$3 900. This will result in.....

• Gain of $700

• Gain of $3 900

• Loss of $700

• Loss of $3 900