Accounting Year 11 December Revision Quiz

For which accounts does the cash book act as a ledger account?

• bank, cash, discount allowed, discount received

• cash, discount allowed, discount received

• discount allowed, discount received

• bank, cash

Insurance prepaid, $120, was treated as an accrual in the income statement.

Which effect did this have on the profit for the year?

• overstated $120

• overstated $120

• understated $120

• understated $240

How is cost of production calculated?

• direct materials + direct labour + direct expenses

• direct materials + direct labour + direct expenses + factory overheads

• direct materials + direct labour + direct expenses + factory overheads

  + decrease in work in progress

• direct materials + direct labour + direct expenses + factory overheads

  – decrease in work in progress

When preparing his financial statements for the year ended 30 April 2019 Tebogo recorded his opening inventory of $6400 as $4600 in error.

What was the effect of this error?

• effect on gross profit for the year overstated

  effect on profit for the year overstated

  effect on capital at overstated

• effect on gross profit for the year understated

  effect on profit for the year understated

  effect on capital at understated

• effect on gross profit for the year overstated

  effect on profit for the year understated

  effect on capital at understated

• effect on gross profit for the year understated

  effect on profit for the year overstated

  effect on capital at overstated

Amrik started a business on 1 January 2017 and purchased a machine costing $18 000.

He decided to depreciate the machine at 20% per annum using the reducing (diminishing) balance method. No depreciation was to be charged in the year of disposal.

The machine was sold for $13 300 on 1 July 2018.

What was the profit or loss on the sale of the machine?

• loss $1100

• loss $4700

• profit $1780

• profit $2500

Amelia rented premises to a tenant. At the end of Amelia’s financial year the tenant had paid 2 months’ rent in advance.

Which entries would Amelia make in her ledger?

• credit the rent payable account and carry down as a debit balance

• debit the rent payable account and carry down as a credit balance

• credit the rent receivable account and carry down as a debit balance

• debit the rent receivable account and carry down as a credit balance

Athena is both a customer and a supplier of Heidi. Athena’s account in Heidi’s sales ledger showed a debit balance of $340 and her account in Heidi’s purchases ledger showed a credit balance of $260.

A contra between the two accounts was agreed.

Which entry would Heidi make in her Total Trade Receivables (sales) ledger control account?

• credit $80

• credit $260

• debit $80

• debit $260

An advertising expenses account had a credit balance of $100 on 1 January 2018.

During the year ended 31 December 2018 advertising expenses paid totalled $2830.

This included $45 for the following financial year.

Which journal entry is required to transfer the advertising expenses to the income statement on 31 December 2018?

• debit advertising expenses 2685

  credit income statement 2685

• debit advertising expenses 2885

  credit income statement 2885

• debit income statement 2685

  credit advertising expenses 2685

• debit income statement 2885

  credit advertising expenses 2885