FA - Trial Balance

Lord has extracted the following balances from his accounting records:

He has forgotten to extract the balance on the discounts received account. When this is included, the totals of the trial balance will agree.

What was the balance on the discounts received account?

• $5400

• $4500

• $4000

• $5000

Identify whether each of the following statements is true or false.

1. The trial balance provides a check that no errors exist in the accounting records of a business.    

2. 2. The trial balance is one of the financial statements prepared annually by an entity for its shareholders.

• True & True

• True & False

• False & True

• False & False

Which of the following are limitations of the trial balance?

(1) It does not include all final figures to be included in the financial statements. (2) It does not identify all errors of commission.

(3) It does not identify in which accounts errors have been made.

• (1) and (2) only

• (2) and (3) only

• (1), (2) and (3)

• (1) and (3) only

The following is an extract from the trial balance of Gardeners :

The following items have not yet been accounted for:

1. Rent of $200 was prepaid.

2. Inventory valuation at the end of the accounting period was $1,900.

3.The allowance for receivables should be amended to $200.

What was the profit for the year?

• $33,600

• $23,600

• $23,690

• $23,090

The following year‐end adjustments are required to a set of draft financial statements:

1. Closing inventory of $45,700 to be recorded.

2. Depreciation at 20% straight line to be charged on assets with a cost of $470,800.

3. An Irrecoverable debt of $230 to be written off.

4. 4. Deferred income of $6,700 to be recorded.

What is the impact on net assets of these adjustments?

• $55,390 increase

• $55,390 decrease

• $41,990 decrease

• $41,990 increase

The following is an extract from the trial balance of Ardvark Co :

After making corrections for errors in the list of balances, what is the revised balance on the suspense account?

• $15,710 Dr

• $14,730 Dr

• $13,390 Dr

• $33,630 Dr

The following is the extract of Jenny's trial balance as at 31 December 20X7: The policy of the business is to charge depreciation at 10% per annum on a straight line basis

What is the depreciation charge to the statement of profit or loss for the year ended 31 December 20X7 and the closing carrying amount as at 31 December 20X7?

• Depreciation charge - 3,500

  Carrying amount - 31,500

• Depreciation charge - 5000

  Carrying amount - 30,000

• Depreciation charge - 5,000

  Carrying amount - 45,000

• Depreciation charge - 3,500

  Carrying amount - 30,000

The following is the extract of Jordan's trial balance as at 31 December 20X7:

DR

$

Rent - 22,000

Insurance - 30,000

The following notes have been provided:

(i) The monthly rent charge is $2,000.

(ii) The annual insurance charge for the above year is $28,000.

What is the charge for rent and insurance for the year and the closing accrual and prepayment?

• Charge for the year - Rent 22,000 & Insurance 28,000 Closing balance - Rent prepayment 2,000 & Insurance prepayment 2,000

• Charge for the year - Rent 22,000 & Insurance 30,000 Closing balance - Rent accrual 2,000 & Insurance prepayment 2,000

• Charge for the year - Rent 24,000 & Insurance 28,000 Closing balance - Rent accrual 2,000 & Insurance prepayment 2,000

• Charge for the year - Rent 24,000 & Insurance ,000 Closing balance - Rent accrual 2,000 & Insurance accrual 2,000

The following notes are provided.

(i) Additional irrecoverable debts of $3,000 were identified at the year end.

(ii) It has been decided to make an allowance for receivables of $2,660 on the adjusted receivables at the year end.

What was the total irrecoverable debts expense (irrecoverable debts and allowances for receivables) for the year ended 31 December 20X7 and the closing net receivables balance as at 31 December 20X7?

• Irrecoverable debts expense - $ 4,160

  Net receivables - $ A 23,940

• Irrecoverable debts expense - $ 5,040

  Net receivables - $ A 23,940

• Irrecoverable debts expense - $ 2,560

  Net receivables - $ A 21,830

• Irrecoverable debts expense - $ 4,000

  Net receivables - $ A 19,800

The policy of the business is to charge depreciation at 25% per annum on a reducing balance basis.

What is the statement of profit or loss depreciation charge for the year ended 31 December 20X7 and the closing carrying amount as at 31 December 20X7? Calculations to be rounded to the nearest $.

• Depreciation charge - 12,500 Carrying amount - 15,625

• Depreciation charge - 7,031 Carrying amount - 42,969

• Depreciation charge - 12,500 Carrying amount - 37,500

• Depreciation charge - 7,031 Carrying amount - 21,094