Ruben's Accounting Chapter 9 and 13

A trader took cash from the business for personal use. What effect would this have on the financial statements

• Current Assets- decrease , profit for the year- Increase

• Current Assets- decrease , profit for the year- no effect

• Current Assets- increase , profit for the year- decrease

• Current Assets- increase , profit for the year- increase

A trader repaid a long term loan of 10000. She used all the money in the business bank account, and paid the balance from her personal bank account. How did this affect the statement of financial position

• Assets- no effect liabilities- decrease 3000 Capital increase 3000

• Assets- decrease 7000 liabilities- decrease 10000 Capital increase 3000

• Assets- decrease 10000 liabilities- decrease 7000 Capital increase 3000

• Assets- decrease 10000 liabilities- 10000 Capital increase - no effect

At the end of his financial year Kahili wrote off a debt owed by a credit customer. What was the effect of this

• Trade receivables- decreased Profit for the year - decreased , Capital - decreased Balance at bank- no effect

• Trade receivables- decreased Profit for the year - no effect , Capital - no effect Balance at bank- no effect

• Trade receivables- no effect Profit for the year - no effect , Capital - decreased Balance at bank- decreased

• Trade receivables- no effect Profit for the year - decreased , Capital - no effect Balance at bank- decreased

Which one of the following tangible fixed assets would not normally be depreciated?

• Buildings

• Machinery

• Land

• Equipment

A statement of financial position is best described as:

• a summary of the position of an organisation.

• a summary of what happened last year.

• a listing of money received and paid during the past year.

• a summary of all assets, expenses, liabilities and revenues.

A financial statement that summarizes company revenue and expenses is?

• Balance sheet

• Statement of owner equity

• Income Statement

• Cash flow statement

Wendy maintains a provision for doubtful debts. Which statement is correct?

-It is an application of the matching principle

-It is an application of the prudence principle

-It is an estimate of what may be lost because of irrecoverable debts

-It is money set aside to cover losses because of irrecoverable debts

• 1 2 and 3

• 1 and 4

• 2 and 3

• 2 3 and 4

Abi maintains a provision for doubtful debts at 2 % of trade receivables. On 1 January 2015 the provision for doubtful debts was 426. The trade receivables on 31 December 2014 amounted to 20550

• Debit Income statement $15 Credit Provision for doubtful debts$15

• Debit Income statement $411 Credit Provision for doubtful debts$411

• Debit Provision for doubtful debts $15 Credit Income statement $15

• Debit Provision for doubtful debts $411 Credit Income statement $411

A decrease in the provision for doubtful debts would result in ______________.

• an increase in liabilities

• a decrease in working capital

• a decrease in net profit

• a increase in net profit

Which of the following is the effect on net profit if a business decreases provision for doubtful debts?

• It will increase net profit

• No effect

• It will increase gross profit and net profit

• It will decrease net profit