Practice questions 2

Mew Ling has the following transactions: (1) Receipt of money into the bank account from R Singh in respect of an invoice for goods sold three weeks ago (2) Receipt of money into the bank account from S Kalu for cash sales What are the ledger entries required to record the above transactions?

• Debit bank
  Credit sales

• Debit bank
  Credit sales
  Credit trade receivables

• Debit sales
  Credit bank

• Debit trade receivables Debit sales
  Credit bank

Smith Co has the following transactions:
(1) Purchase of goods on credit from T Rader: $450
(2) Return of goods purchased on credit last month to T Rouble: $700
What are the correct ledger entries to record these transactions?

• Debit purchases 450 Debit purchase returns 700
  Credit bank 450
  Credit trade payables 700

• Debit purchases 450 Debit trade payables 700
  Credit purchase returns 1,150

• Debit purchases 450 Debit trade payables 250
  Credit purchase returns 700

• Debit purchase returns 700
  Debit purchases 450
  Credit trade payables 1,150

An accountant has inserted all the relevant figures into the trade payables account but has not yet balanced off the account.
Assuming there are no other entries to be made, other than to balance off the account, what is the closing balance on the trade payables account?

• $474,485 DEBIT

• $575,235 DEBIT

• $474,485 CREDIT

• $575,235 CREDIT

You are given the following information:
Trade receivables at 1 January 20X3 $10,000
Trade receivables at 31 December 20X3 $9,000
Total receipts during 20X3 (including cash sales of $5,000) $85,000
What are sales on credit during 20X3?

• $81,000

• $86,000

• $79,000

• $84,000

A business sells $100 worth of goods to a customer. The customer pays $50 immediately and will pay the remaining $50 in 30 days' time.
What is the double entry to record the purchase in the customer's accounting records?

• DEBIT bank $50, CREDIT payables $50, CREDIT purchases $50

• DEBIT payables $50, DEBIT bank $50, CREDIT purchases $100

• DEBIT purchases $100, CREDIT payables $50, CREDIT bank $50

• DEBIT purchases $100, CREDIT bank $100

At 30 November 2005 Jenny had a bank loan of $8,500 and an asset balance of $678 in her bank account How should these amounts be recorded on Jenny's opening trial balance at 1 December 20X5?

• DEBIT $7,822

• CREDIT $7,822

• CREDIT $8,500 and DEBIT $678

• DEBIT $8,500 and CREDIT $678

Financial transactions are recorded in the general ledger. Identify the nature and function of the general ledger account described below.

This general ledger account is used to record credit notes issued to credit customers in respect of items returned to the business. This represents a reduction in the income of the business.

• Capital

• Carriage outwards

• Non-current assets

• Sales returns

Alana is not registered for sales tax purposes. She has recently received an invoice forlu goods for resale which cost $500 before sales tax, which is levied at 15%. The total value was therefore $575.

What is the correct entry to be made in Alana's general ledger in respect of the invoice?

• DEBIT Purchases $500, DEBIT Soles tax $75, CREDIT Payables $575

• DEBIT Purchases $575, CREDIT Sales tax $75, CREDIT Payables $500

• DEBIT Purchases $500, CREDIT Payables $500

• DEBIT Purchases $575, CREDIT Payables $575

A business commenced with capital in cash of $1,000. Inventory costing $800 plus sales tax is purchased on credit, and half is sold for $1,000 plus sales tax, the customer paying in cash at once. The sales tax rate is 20%.

What would the accounting equation after these transactions show?

• Assets $1,800 less Liabilities $200 equals Capital $1,600

• Assets $2,200 less Liabilities $1,000 equals Capital $1,200

• Assets $2,600 less Liabilities $800 equals Capital $1,800

• Assets $2,600 less Liabilities $800 equals Capital $1,800

An organisation restores its petty cash balance to $250 at the end of each month. During October, the total expenditure column in the petty cash records was colculated as being $210, and the imprest was restored by this amount. The analysis columns posted to the general ledger totalled only $200. Which one of the folowing would this error cause?

• The trial balance being $10 higher on the debit side

• The trial balance being $10 higher on the credit side

• No Imbalance in the trial balance

• The petty cash balance being $10 lower than it should be