Accounting Basics

What are the three main financial statements?

• Profit statement, equity statement, liquidity statement

• Expense statement, asset statement, investment statement

• Income statement, balance sheet, cash flow statement

• Revenue statement, liability statement, operating statement

Which of the following is a bank overdraft an example of?

• Asset

• Liability

• Income

• Expense

Andy started a business and introduced capital of $10.000.He also obtained a loan of $6.000 to purchase non-current assets?

What is the value of Andy's opening net assets?

• $4.000

• $6.000

• $10.000

• $16.000

A business had net assets at 1 January and 31 December 2023 of $75.600 and 73.800 respectively. During the year, the proprietor introduced additional capital of 17.700 and withdrew cash and goods to the value of $16.300 ?

What was the profit or loss made by business in 2023 ?

• $3.200 loss

• $3.200 profit

• $400 loss

• $400 profit

What does a credit balance on the leger account indicate?

• An asset or an expense

• A liability or expense

• An amount owing to the organization

• A liability or revenue

You were given the following information:

AR at 1 January 2023 - $10.000

AR at 31 December 2023 - $9.000

Total receipts during 2023 (including cash sales of $5.000) - $85.000

What was the value of credit sales in the year to 31 December 2023 ?

• $80.000

• $79.000

• $81.000

• $85.000

Lindsey has paid $11.040 for rent for six month period to 31 August 2023.

What accrual or prepayment is required when preparing financial statements for the year ended 30 June 2023?

• A prepayment of $1.840

• An accrual of $1.840

• A prepayment of $3.680

• An accrual of $3.680

Dave is preparing his financial statements for the year to 30 April 2023.The last payment Dave made for electricity was in March 2023 when he paid $3.270 for the three months to 28 February 2023.

What adjustment does Dave need to make when preparing his financial statements for the year to 30 April 2023?

• A prepayment of $1.090

• An accrual of $1.090

• A prepayment of $2.180

• An accrual of $2.180

In the year to 31 December 2023 Tracy wrote off an amount of $275 due from a customer who had become bankrupt. She also make allowance of 3% of the total receivables balance at the year end. Receivables at 31 December 2023 were $12.000.The previous year's allowance was for $400.

What amount should be written off to the statement of profit and loss for the year to 31 December 2023?

• $360

• $635

• $315

• $235

The information below relates to inventory item Z :

March 1 - 50 units held in opening inventory at a cost of $40 per unit

March 17 - 50 units purchased at the cost of $50 per unit

March 31 - 60 units sold at a selling price of $100 per unit

Under the continuous weighted average cost method ,what is the value of inventory held for item Z at 31 March ?

• $4.000

• $1.800

• $2.000

• $2.500