IGCSE Accounting quiz

Which action does not reduce the owner’s capital?

• business expenses paid using a personal cheque

• cash withdrawn from the business bank account for personal use

• goods taken from inventory for personal use

• personal expenses paid using business cash

Which statement correctly describes the accounting equation?

• capital = assets – liabilities

• capital = assets + liabilities

• capital = current assets – current liabilities

• capital = current assets + current liabilities

Which action is not an examples of book-keeping?

• entering details of a cheque received from a customer in the cash book

• entering details of goods purchased on credit in the purchases journal

• producing an income statement to calculate the profit for the year.

• recording details of credit sales in the account of a credit customer

A trader supplied the following information at her year end.

non-current assets $4000 inventory $350 trade receivables $180 cash at bank $650 debit trade payables $280

What was the trader’s capital?

• $4900

• $5100

• $5180

• $5460

What is the main function of book-keeping?

• communicating information

• interpreting information

• recording information

• summarising information

Why does the accountant of a business analyse its financial statements?

• to provide information for the customers

• to provide information for the government

• to provide information for the managers

• to provide information for the suppliers

Padma started a business on 1 April 2022 with $30 000 of her own money. On 31 March 2023, her assets and liabilities were as shown.

machinery at net book value$38 000 other assets $15 000 long-term loan from bank $16 500

What was Padma’s capital on 31 March 2023?

• $30 000

• $36 500

• $45 000

• $54 000

  Which components of a statement of financial position do descriptions 1, 2 and 3 relate to? 

 1 finance and other resources that have been provided by the owner

 2 money owed for goods supplied, unpaid expenses and loans made to the business 

 3 property owned by the business, amounts owed by customers, unsold goods and money in the bank   

• 1. Assets 2.Capital 3.Laiabilities

• 1. Assets 2.Laiabilities 3.Capital

• 1.Capital 2. Assets 3.Laiabilities

• 1. capital2. liabilities 3.assets

What is the purpose of accounting?  

• to enter each business transaction twice in the books of account

• to prepare financial statements and provide information for decision making

• to prove that the total of the debit entries equals the total of the credit entries

• to provide financial information for the business’s bank manager

Which transaction will increase both assets and capital by the same amount?

• A credit customer settled his account after deducting a cash discount.

• Goods were sold for cash at a price higher than their cost price.

• Rent received included an amount prepaid for the next accounting period.

• The owner repaid a business loan from his personal bank account.