Scott sold goods for £1250 on credit, excluding sales tax at 20%. State the correct double entry.

 

• Dr Trade Receivables £1500 Cr Sales £1250

  Cr Sales Tax £250

• Dr Sales £1500

  Dr Sales Tax £250 Cr Trade Receivables £1250

• Dr Sales £1250

  Cr Sales Tax £250 Cr Trade Receivables £1500

• Dr Trade Receivables £1500 Dr Sales Tax £250 Cr Sales £1250

You have bought stationery with a company cheque from the stationery shop next door. How should this transaction be recorded?

 

• DR Stationery

  CR Payable

• DR Cash

  CR Payable

• DR Stationery

  CR Cash

• DR Payable

  CR Cash

On 01 December 20X8, you paid £500 insurance premium for the period starting 01 January 20X9. State the correct journal entry.

 

• DR Cash £500

  CR Insurance £500

• DR Insurance £500, CR Cash £500

• DR Prepaid Insurance £500, CR Cash £500

• DR Cash £500, CR Prepaid Insurance £500

Jenny’s payable ledger shows opening balance of £600 at August 01. During the month she purchased goods worth £1200 on credit & £500 on cash.

Beside she paid £1000 to suppliers. What will be the amount of the closing balance of her payable ledger?

• £700

• £800

• £1300

• £200

In double-entry book-keeping, which of the following statements is correct?

 

• Debit entries decrease income and increase assets

• Credit entries decrease liabilities and increase income

• Credit entries decrease expenses and increase assets

On 01 January 2019, you received a bill of £600 for electricity for the Quarter ended 31 December 2018. State the correct journal entry.

 

• DR Cash £600, CR Electricity Exp £600

• DR Electricity Exp £600, CR Cash £600

• DR Electricity Exp Payable £600, CR Cash £600

• DR Electricity Exp £600, CR Electricity Exp Payable £600

James’s receivable ledger shows opening balance of £400 at February

01.  During the month he sold £1000 & received £700 from customers.

 

What will be the amount of the closing balance of his receivables ledger?

 

• £1100

• £1700

• £700

• £300

A debit balance of £3,000 brought down on A Co’s account in B Co’s books means that:

 

• A Co is owed £3,000 by B Co

• B Co has sold £3,000 of goods to A Co

• B Co is owed £3,000 by A Co

• A Co has sold £3,000 of goods to B Co

Harry has been unable to calculate his business' profit or loss for the year ended 31 December 20X9 as fire destroyed most of his accounting records. He has, however, been able to provide the following information.

 

1.    Net assets at 31 December 20X8 were £23,000 and £32,500 at 31 December 20X9

 

2.  He introduced capital during the year of £4,000 cash

 

3.  He took cash drawings of £2,500 and goods with a selling price of £800, the cost of the goods was £750.

 

What was Harry's profit or loss for the year ended 31 December 20X9?

 

•   £8,750 profit

• £1,750 loss

• £9,800 profit

• £2,750 loss

Bill, a sole trader, set up business on 1 October 20X8 with £30,000 of his own money. During the year to 30 September 20X9 he won £50,000 on the lottery and paid £30,000 of this into his business. He took cash drawings of £5,000 during the year and at 30 September 20X9 the net assets of the business totaled

£59,000.

 

What was the profit or loss of the business for the year ended 30 September 20X9?

 

• £6,000 profit

• £16,000 loss

• . £4,000 profit

• £6,000 loss