MIS Y10 Accounting 2nd Mid-term Examination

1        What is the purpose of book-keeping?

• to interpret the double entry records

• to prepare financial statements at regular intervals

• to record all the financial transactions of the business

• to summarise the financial position of the business

What are assets?

• items that are bought for long-term use by a business

• items that are expected to be turned into cash in the near future

• items that are owned by or owed by a business

• items that are owned by or owed to a business

Sami returns goods bought on credit from Javed. How does Javed record this in his books?

• A

• B

• C

• D

At the end of the financial year there was a debit balance brought down on the office expenses account.

In which section of the statement of financial position will this be recorded?

• capital

• current assets

• current liabilities

• non-current assets

What does the balance on 31 December represent?

• rent payable outstanding

• rent payable prepaid

• rent receivable outstanding

• rent receivable prepaid

Karim issued an invoice, a credit note and a receipt.

What has happened?

• Karim purchased goods and paid the supplier immediately.

• Karim purchased goods on credit, made returns to the supplier and paid the balance due.

• Karim sold goods and received immediate payment from the customer.

• Karim sold goods on credit, received returns from the customer and received the balance due.

A trader’s purchases on credit for April amounted to $2000. These purchases were subject to a trade discount of 10% and also a cash discount of 5% for accounts paid within 30 days.

How much was entered in the purchases journal?

• $1700

• $1800

• $1900

• $2000

Which is part of the double entry system?

• cash book

• general journal

• sales journal

• trial balance

What is a trial balance?

• a list of balances in a business’s books on a certain date

• a list of the assets, liabilities and capital of a business on a certain date

• a summary of all a business’s transactions for the year

• a summary of the financial position of a business at the year end

Which error will be revealed by the preparation of a trial balance?

• an amount recorded twice as a debit entry

• a capital expenditure item treated as revenue expenditure

• a double entry made using an incorrect amount

• a transaction completely omitted from the books