ICAEW CFAB ACCOUNTING (AG)

What are journal entries used for?

• to present to supplier before buying any products

• to present to customer before selling any products

• to present the required double entry for a transaction

• to have better understanding of the business financial status

What is the journal entry for the following transaction?

Purchased equipment on credit

• Debit Capital, Credit Drawings

• Debit Equipment, Credit Trade Payables

• Debit Cash at bank, Credit Capital

• Debit Fixtures and Fittings, Credit Cash at bank

What is the journal entry for the following transaction?

Took out cash for personal expenses

• Debit Capital, Credit Drawings

• Debit Drawings, Credit Cash at bank

• Debit Fixtures and Fittings, Credit Cash at bank

• Debit Cash at bank, Credit Capital

What is the double entry when a business start with a cash float from cash at bank?

• Debit Purchases, Credit Petty cash

• Debit Petty Cash, Credit Payables

• Debit Cash at bank, Credit Petty Cash

• Debit Petty cash, Credit Cash at bank

Summit Glazing operates an imprest petty cash system. The imprest amount is £150.00. At the end of the period the totals of the expense columns in the petty cash book were as follows:

£

Stationery 23.12

Sundries 6.74

Postage 12.90

Travel 28.50

RequirementsHow much cash is required to restore the imprest amount?

• £150.00

• £71.26

• £78.74

• £0

GSC Co operates an imprest petty cash system. The imprest amount is £125.00. At the end of the period the totals of the expense columns in the petty cash book were as follows:

£

Stationery 12.51

Sundries 7.21

Postage 6.12

Travel 32.60

Requirements : How much cash is required to restore the imprest amount?

• £0

• £66.56

• £125.00

• £58.44

What transaction is represented by the entries: Debit Rent, Credit Payables?

• The payment of rent by the business

• The receipt of an invoice for rent payable by the business

• The issue of an invoice for rent to a tenant

• The receipt of rental income by the business

Crimson plc paid an invoice from a credit supplier and took advantage of the early settlement discount offered. 

When the invoice was received and recorded, Crimson plc did not expect to take the discount.

Requirement : The journal entry to record the payment of the invoice is:

• Debit Cash at bank account, Credit Purchases, Credit Payables

• Debit Payables, Credit Cash at bank account

• Debit Cash at bank account, Debit Purchases, Credit Payables

• Debit Payables, Credit Purchases, Credit Cash at bank account

A debit balance of £3,000 brought down on America Ltd’s account in Brazil Ltd’s accounting records means that Brazil Ltd owes America Ltd £3,000.

Select one:

• True

• False

Finnie has normal credit terms of 30 days but offers a prompt payment discount of 5% to customers if they settle invoices within 10 days. 

At 19 April, Finnie sold goods totalling £500 to Rabia. Rabia normally takes advantage of the prompt payment discount offered. 

At 22 April, Finnie sold goods to Shu totalling £340. Shu normally takes a full 30 days to settle their invoices.

Requirement : What is amount should be recordedin the ledger accounts of Finnie assuming that Rabia pays within 10 days

• £500

• £475