Jane purchased goods and paid by credit transfer. How should this be recorded in Jane's accounting records?

Purchases Debit Trade Payable Credit

Trade Payable Debit Purchases Credit

What is shown in a trial balance?

ledger balances on a particular date

capital and profit on a particular date

financial transactions for a particular period

receipts and payments for a particular period

At the end of each year, PT Limited transfers 20% of the profit for the year to the general reserve. Draft financial statements were prepared for the ended 30 September 2021. It was then discovered that the inventory at 30 September 2021 had been overstated by $1500. Which effects did the correction of this error have on retained earnings and general reserve at 30 September 2021?

retained earnings decrease $1200 general reserve decrease $300

retained earnings decrease $300 general reserve increase $300

retained earnings increase $300 general reserve increase $1200

retained earnings increase $1500 general reserve no effect

The bank columns in a trader's cash book and the bank statement both showed positive balances. A comparison revealed the following differences. Uncredited cheque $200 bank charges not included in cash book $10 What was the difference between the balance shown in the bank column of the cash book and that shown on the bank statement?

The cash book balance was $210 higher than the bank statement balance.

The cash book balance was $190 higher than the bank statement balance.

The cash book balance was $190 lower than the bank statement balance.

The cash book balance was $210 lower than the bank statement balance.

What is a reason for preparing a sales ledger control account?

to summarise the accounts of the trade receivables

to calculate total sales revenue

to ensure trade receivables pay on time

to help prepare the income statement

Amit's financial year ends on 31 December. The following account appeared in his sales ledger. What does the entry on 21 November represent?

the recovery of a debt previously written off

Sally wished to increase the balance on the provision for doubtful debts account at the end of the financial year. How should this increase be recorded?

income statement debit provision for doubtful debts account credit

irrecoverable debts account debit provision for doubtful debts account credit

provision for doubtful debts account debit income statement credit

provision for doubtful debts account debit irrecoverable debts account credit

The following errors were found after a statement of financial position had been prepared. 1 A loan repayable in two year's time had been included as a current liability 2 A provision for doubtful debts should have been created. What is the effect of correcting these errors?

current assets decrease current liabilities decrease non current liabilities increase owner's equity decrease

current assets decrease current liabilities increase non-current liabilities decrease owner's equity increase

current assets increase current liabilities decrease non-current liabilities decrease owner's equity increase

current assets increase current liabilities increase non-current liabilities decrease owner's equity decrease

John maintains a full set of accounting records. Why does he also prepare a statement of financial position?

to summarise what the business owns and what it owes

to calculate the profit for the year

to check if assets equal capital plus liabilities

to show the transactions which took place during the year

Kasi and Ravi are in partnership. The financial statements for the year ended 31 August 2021 showed that Ravi was entitled to interest on capital and interest on loan and was charged interest on drawings. Which entries would be made in Ravi's current account?

interest on capital credit interest on loan credit interest on drawings debit

interest on capital debit interest on loan debit interest on drawings credit

interest on capital debit interest on drawings credit

interest on capital credit interest on drawings debit

BCD Limited provided the following information. Ordinary shares $300 000 retained earnings $200 000 debentures $170 000 How much was the equity and the capital employed?

equity 500 000 capital employed $670 000

equity $300 000 capital employed $470 000

equity $300 000 capital employed $670 000

equity $500 000 capital employed $470 000

A sports club was formed on 1 August 2020. During the year ended 31 July 2021 the club purchased equipment costing $5 000, paying by cheque. In which of the club's financial statements did this appear?

receipts and payments account statement of financial position

Receipts and payments account Income and expenditure account

income and expenditure account statement of financial position

statement of financial position

The value of Thato's work in progress increased during the year. This was recorded in his financial statements. How did this affect the cost of production and the cost of sales?

cost of production decreased cost of sales decreased

cost of production decreased cost of sales no effect

cost of production increased cost of sales increased

cost of production increased cost of sales no effect

Which information is required to calculate the return on capital employed for a sole trader?

operating profit for the year, non-current liabilities, owner's capital

gross profit, non- current liabilities, owner's capital

gross profit, non-current liabilities, working capital

operating profit for the year, non-current liabilities, working capital

A business provided the following information about its gross margin. Year 1 40% Year 2 38% Year 3 35% What could explain the changes in the gross margin?

quantity of goods sold is decreasing

What is not a limitation of inter-firm comparison?

Businesses may have different sales prices

Accounting records do not include the skills of the workforce

Businesses may have different accounting policies

The available information may not relate to a typical year

Why would a supplier be interested in the financial statements of credit customer?

to know if the customer can pay what he owes

to know the amount owed by trade receivables

to know the profit for the year

to know the value of the inventory

What does the objective of understandability assume users of financial statements will possess?

a reasonable knowledge of accounting

knowledge of book-keeping but not accounting

no knowledge of book-keeping or accounting

MCQ PYP

Authored by R B

Business

11th Grade

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35 questions

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MULTIPLE CHOICE QUESTION

10 sec • 1 pt

Why does a trader calculate the profit of the business?

to calculate the interest payable on a loan

to calculate the provision for doubtful debts

to know the total expenses of the business

to know whether drawings are at a reasonable level

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

Hassan is a trader. During the financial; year he tool goods from the business for his own use.
How should he record this?

Drawings Debit

Inventory Credit

Drawings Debit

Purchases Credit

Income statement Debit

Inventory Credit

Income Statement Debit

Purchases Credit

MULTIPLE CHOICE QUESTION

10 sec • 1 pt

Where are the accounts of the credit suppliers maintained?

Purchases journal

Purchases ledger

Sales journal

Sales ledger

MULTIPLE CHOICE QUESTION

10 sec • 1 pt

Which document does a trader issue to remind a credit customer that a payment is due?

Credit note

Debit note

receipt

statement of account

MULTIPLE CHOICE QUESTION

10 sec • 1 pt

What is a cheque counterfoil used for?

to pay cheque into the bank account

to pay for goods purchased by cheque

to record a cheque payment in the cash book

to record a cheque received in the cash book

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

Farouk sells goods on credit. A cheque from Khalid, a credit customer, was dishonoured by the bank. How should Farouk record this?

Bank Debit

Khalid Credit

Irrecoverable debts Debit

Khalid Credit

Khalid Debit

Bank Credit

Khalid Debit

Irrecoverable Debts Credit

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Tumelo sells on credit. The terms of trade are listed.
list price: $200 per unit
credit period: 60 days
trade discount 15% if 10 units or more are purchased
cash discount 3% if the debt is paid within one month
A credit customer purchased 20 units and paid the debt within 15 days
What was the total of invoice?

$3298

$3400

$3880

$4000

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MCQ PYP

Why does a trader calculate the profit of the business?

Hassan is a trader. During the financial; year he tool goods from the business for his own use. How should he record this?

Where are the accounts of the credit suppliers maintained?

Which document does a trader issue to remind a credit customer that a payment is due?

What is a cheque counterfoil used for?

Farouk sells goods on credit. A cheque from Khalid, a credit customer, was dishonoured by the bank. How should Farouk record this?

Jane purchased goods and paid by credit transfer.How should this be recorded in Jane's accounting records?

What is shown in a trial balance?

Access all questions and much more by creating a free account

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Popular Resources on Wayground

Discover more resources for Business

Hassan is a trader. During the financial; year he tool goods from the business for his own use.
How should he record this?

Jane purchased goods and paid by credit transfer.
How should this be recorded in Jane's accounting records?