Multiple choice part 2

A trader bought new fixtures. He paid half of the purchase price in cash and agreed to pay the balance in two months’ time.

How does this purchase affect the accounting equation?

• assets- increase

  owner's equity- decrease

  liabilities - no effect

• assets - decrease

  owner's equity-no effect

  liabilities- increase

• assets- increase

  owner's equity - decrease

  liabilities - increase

• assets- increase

  owner's equity-no effect

  liabilities - increase

The following balances appeared in Hussein's books

What was the total of the liabilities?

• $4500

• $6200

• $6400

• $7200

William paid $500 in cash to Sonia for rent.

How did Sonia record this?

• debit - cash

  credit - rent receivable

• debit- rent receivable

  credit- cash

• debit - rent receivable

  credit - william

• debit- william

  credit - rent receivable

Goods purchased on credit from Zamir were returned by Ashwin.

Which entries should Zamir make to record this?

• debit - ashwin

  credit - purchase return

• debit- purchase return

  credit- zamir

• debit- sales return

  credit- ashwin

• debit - zamir

  credit - sales return

Bilal purchased goods on credit from Asim.

Where should Asim record this transaction?

1 cash book

2 nominal (general) ledger

3 purchases ledger

4 sales ledger

• 1 and 2

• 1 and 4

• 2 and 3

• 2 and 4

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 the assets owned by the business

• the total of the current assets less the current liabilities

Abdul sells goods to Rekha on credit. Some goods were damaged in transit.

Which document would Rekha send to Abdul?

• credit note

• debit note

• invoice

• statement of account

Shula’s financial year ends on 31 March. On 1 April 2021 there was a credit balance of $100 on

Yasmin’s account in Shula’s purchases ledger.

What does this mean?

• Shula had paid $100 to Yasmin

• Shula owed $100 to Yasmin.

• Yasmin had paid $100 to Shula.

• Yasmin owed $100 to Shula.

Leah bought goods, $8000, less 15% trade discount. She later returned half of these goods as they were faulty.

Which document did Leah issue to the supplier for the returned goods?

• credit note for $3400

• debit note for $3400

• credit note for $4000

• debit note for $4000

Ben sold goods to David for $900 cash.

In which book of prime entry would David record this transaction?

• cash book

• general journal

• purchase journal

• sales journal