Incomplete records

Sumit does not maintain a full set of accounting records.

What does Sumit not need to calculate his credit sales?

• customer’s dishonoured cheque

• discounts allowed

• discounts received

• returns from credit customers

• $1000 loss

• $1000 profit

• $7000 loss

• $7000 profit

What are advantages of keeping a full set of accounting records?

1 Financial statements will be free from errors.

2 It is impossible to make fraudulent entries.

3 More informed decision-making is possible.

4 The calculation of profit is more accurate.

• 1 and 2

• 1 and 3

• 2 and 4

• 3 and 4

Roshan’s sales for his first year of trading were $55 000. His gross profit margin was 20%. The closing inventory was $3200.

What were the purchases for the year?

• $41 250

• $44 000

• $44 450

• $47 200

Jamal did not maintain double entry records during his first year of trading.

Which item is not required in order to calculate his credit sales using a total trade receivables account?

• bad debts

• discount allowed

• provision for doubtful debts

• receipts from credit customers

Sally provided the following information at the end of her financial year.

Revenue 44000

Opening inventory 3000

Closing inventory 1000

Purchases 32000

Expenses 6000

What was Sally’s percentage of gross profit to revenue (gross profit margin)?

• 9.09%

• 11.76%

• 22.73%

• 29.41%

A business provided the following information.

opening inventory 36 000

closing inventory 24 000

purchases 360 000

revenue 480 000

What was the rate of inventory turnover?

• 12.0 times

• 12.4 times

• 15.5 times

• 16.0 times

• $12000 loss

• $12000 profit

• $26000 loss

• $26000 profit

How is mark-up calculated?

• cost of sales / gross profit

• gross profit / cost of sales

• gross profit / revenue

• revenue / gross profit

On 1 May 2018 Ben’s capital was $47600.

During the year ended 30 April 2019 he introduced his personal motor vehicle, $12500, into the business. His drawings during the year ended 30 April 2019 were $7500.

On 30 April 2019 Ben’s capital was $51250.

What was Ben’s profit or loss for the year?

• loss $1350

• loss $8650

• profit $1350

• profit $8650