Accounting Chapter 15 - Past Year MCQ

On 1 April 2021, commission receivable, $210, was outstanding. Commission received during the year ended 31 March 2022 amounted to $4850. Which journal entry should have been made at the end of the financial year on 31 March 2022?

• DR commission receivable 4640 | CR income statement 4640
• DR commission receivable 5060 | CR income statement 5060
• DR income statement 4640 | CR commission receivable 4640
• DR income statement 5060 | CR commission receivable 5060

At the end of his financial year, Marek was owed $200 for interest on a loan he had made to an employee. He recorded this in his financial statements. How did the interest on this loan affect Marek’s profit for the year and where was it recorded in his statement of financial position?

• Profit - decreased | SOFP - current assets
• Profit - decreased | SOFP - current liabilities
• Profit - increased | SOFP - current assets
• Profit - increased | SOFP - current liabilities

Davi prepared the following journal entry to correct an error. DR Samir 40 CR Samuel 40 Which error was being corrected?

• Cash paid to Samir had been credited to Samuel.
• Cash received from Samuel had been debited to Samir.
• Goods bought from Samir had been credited to Samuel.
• Goods sold to Samir had been debited to Samuel.

A suspense account was opened with a credit balance of $840. Which error caused this?

• A cheque for $420 received from a customer was debited to his account.
• Discounts allowed, $420, was debited twice in the discounts allowed account.
• Goods costing $420, taken by the owner of the business for own use, were credited to his drawings account.
• Rent received, $420, was credited twice in the rent receivable account.

A trader calculated her profit for the year at $14 800. The following errors were then discovered. No entry had been made for $200 wages accrued. The insurance expense included a prepayment of $90. What is the correct profit for the year?

• $14 510
• $14 690
• $14 910
• $15 090

On the last day of the financial year, Khalid purchased office fittings, $900. This was incorrectly recorded as office expenses, $90. Khalid does not charge depreciation in the year of purchase. What was the effect on the profit for the year?

• overstated by $810
• overstated by $990
• understated by $90
• understated by $900

After preparing draft financial statements at the end of her first year of trading, Lucy discovered two errors. 1 Damaged inventory had been valued at cost price, $340. It was expected to sell for $180. 2 100 items which had been expected to sell for $12 each had been valued at their cost price of $7 each. Carriage inwards of $1 for each item had not been included in the cost. What was the effect of these errors on the gross profit?

• overstated $60
• overstated $240
• understated $60
• understated $240

A cheque, $85, received from Shakeel, was credited to the account of Shamz. Which journal entry corrects this error?

• DR Bank CR Shakeel
• DR Shakeel CR Shamz
• DR Shamz CR Bank
• DR Shamz CR Shakeel

Which transaction is recorded in the general journal?

• correction of an error in recording sales returns
• drawings in cash by the owner
• purchase of a motor vehicle by cheque purchase of goods on credit
• purchase of goods on credit

Motor vehicle expenses, $50, were incorrectly debited to the motor vehicles account. Which journal entry corrects this error?

• DR motor vehicle expenses 50 | CR motor vehicles 50
• DR motor vehicles 50 | CR motor vehicle expenses 50
• DR motor vehicle expenses 50 DR motor vehicles 50 | CR Suspense 100
• DR Suspense 100 | CR motor vehicle expenses 50 CR motor vehicles 50