sp 20

A trader prepares financial statements each year.

What do these assist the trader to do?

• calculate the amount owing to credit suppliers

• calculate the cash drawings

• check the bank statement balance

• make decisions about the future

What is not an example of book-keeping entry?

• an entry made in the bank column of the cash book for a cheque received

• cost of goods purchased on credit entered in the supplier's account

• expenses paid during the year entered in the income statement

• goods returned by a customer entered in the sales returns journal

The following balances appeared in Hussein's books.

What was the total liabilities?

• $4,800

• $6,200

• $6,400

• $7,200

What does the owner's equity consist of?

• the amount of money in the business bank account

• the amount owed by the business to the owner

• the total of assets owned by the business

• the total of the current assets less the current liabilities

Which entries did Sally make to record the following transaction?

Rashid, a credit customer, returned damaged goods.

• debit purchase returns, credit Rashid

• debit Rashid, credit purchase returns

• debit sales returns, credit Rashid

• debit Rashid, credit sales returns

The following account appeared in the books of Mary.

Which statement is correct?

• On 1 April Paul owed Mary $90

• On 14 April Paul sold goods, $150, to Mary

• On 21 April Mary returned goods, $25, to Paul

• On 30 April Mary owed Paul $125

In which sections of Zamir's ledger would the following accounts be maintained?

1. The sales account

2. The account of Harjit, a trade receivable

• A

• B

• C

• D

Sue allows 2% cash discount to credit customers who settle their account within 28 days. Jane purchased goods, list price $200, on 10 September. She returned these goods on 15 September.

Which entry would Sue make on 15 September?

• purchase returns journal $196

• purchase returns journal $200

• sales returns journal $196

• sales returns journal $200

A transaction was posted to the wrong account of the same class.

What type of error was made?

• commission

• original entry

• principle

• reversal

Motor vehicle expenses, $50, were incorrectly debited to the motor vehicle account.

Which journal entry corrects this error?

• A

• B

• C

• D