MCQ O

Which actions 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• cash withdrawn from the business bank account for personal use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 liabilties

What could a credit balance on a ledger account represent?

• accrued income

• asset

• expense

• prepaid income

Aiden purchased goods from Jai and paid for them by bank transfer when he received a statement of account. Jai says he has not received the payment?

Which document would help Aiden check that he had made the payment?

• bank statement

• cheque counterfoil

• paying in slip

• petty cash voucher

At the end of the month, how is the total from the sales journal recorded in the ledger?

• credited to the customer's personal accounts

• credited to the sales account

• debited to the customers' personal accounts

• debited to the sales account

A customer paid $15 600 to a supplier after receiving a 2 ½% cash discount and a trade discount of 20%.

What was the amount of the invoice entered in the purchases journal?

• $12 480

• $15 600

• $16 000

• $20 000

The balance of cash at bank shown in the cash book is $1 200. The bank statement at the same date shows the balance to be $1440.

What could explain the difference?

• payment to supplier, $120, entered on the wrong side of the cash book

• bank charges, $240, not in the cash book

• cheques to suppliers, $240, not yet presented to the bank

• receipts from customers, $240, banked but not yet entered in the bank statement