
Recording, using and evaluating financial information
Quiz
•
Business
•
11th Grade
•
Practice Problem
•
Hard
Claire Larsen
Used 3+ times
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10 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
When preparing financial statements the bad debt account is closed by a transfer to:
The profit and loss account
The allowance for bad debts account
The trading account
The balance sheet
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following statements is correct:
The Bad Debts account has a credit balance
Bad Debts are added to debtors
Bad Debts are deducted from the outstanding Accounts receivable (debtors)
Bad debts are added to current assets
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
The general journal entry required to write off a bad debt is posted by:
Debiting accounts receivable (debtors)
Crediting bad debts
Debiting bad debts
None of the above
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
The rationale for making a provision in respect of doubtful debts is that the provision:
Records the expense of bad debts as they incurred
Matches the estimated cost of future bad debts against the income earned in giving rise to potential bad debts
Is an estimate of future bad debts
records bad debts without taking them out of the books of a business, therefore showing the full amount owed by debtors as a current asset
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
If $300 accrued wages was accidentally treated as a prepayment, the profit would be:
overstated by $300
understated by $300
overstated by $600
Understated by $600
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Expenses relevant to an accounting period which remain unpaid at the end of the period should:
be shown as part of the non-current liabilities in the balance sheet at the end of the financial period
be shown as an expense in the income statement for the period and shown as a non-current liability in the balance sheet at the end of the period
be shown as an expense in the income statement for the period and shown as a non-current asset in the balance sheet at the end of the period
be shown as an expense in the income statement for the period and shown as a current liability in the balance sheet at the end of the period
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
An error adding Unearned Income of $100 instead of deducting it from the income received is corrected by:
Adding $100
Deducting $100
Adding $200
Deduction $200
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