Bookkeeping and Accounts Quiz

Which of the following descriptions about accounting concepts, assumptions and conventions is correct?

• Historical cost ― all business transactions should be recorded in the books

• Going concern ― a business will continue in operation for the foreseeable future

• Consistency ― the accounting policies and methods cannot be changed once adopted

• Business entity ― a sole proprietor can record his personal spending in the books of his business

Morgan made the following double entry in his ledgers.

Debit: Sales Returns; Credit: Sam

Which transaction was being recorded?

• Goods returned by Morgan to Sam, Morgan’s credit customer

• Goods returned by Morgan to Sam, Morgan’s credit supplier

• Goods returned by Sam to Morgan, Sam’s credit customer

• Goods returned by Sam to Morgan, Sam’s credit supplier

If an account has a credit balance, which of the following statements about the account is correct?

• the account is an income account

• the balance brought down appears on the left hand side of the account

• The balance carried down appears on the credit entry of the account

• the totals of the credit side in the account is more than the totals of the debit side

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 income included an amount prepaid for the next accounting period

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

Chan started a business on 1 July 2022. At the end-of-period, the following information is given:

Drawings 53,500; Net profit 62,700; Sales 1,500,000; Expenses 875,000

What was the cost of sales for the year?

• RM 562,300

• RM 571,500

• RM 678,000

• RM 687,700

Which items would affect a sole trader’s gross profit?

• Carriage inwards

• Cash discounts allowed

• Sales commission

• Trade discounts received

Which of the following accounts must be in debit balances on a trial balance?

• Bank charges

• Bank loan

• Bank

Based on the above transactions, what should be the totals of purchases recorded for the month in the Purchases Journal?

• RM 5,380

• RM 5,400

• RM 5,700

• RM 7,700

On the first day of accounting year, Jason bought a new machine costing RM 20,000. On the same day, the old machine had a carrying amount of RM 6,000. Jason was allowed RM 4,500 for the old machine in part exchange. He paid the balance by cheque. Machinery is depreciated at 20% per annum. How much should be charged by Jason’s income statement for the year?

• RM 1,500

• RM 2,500

• RM 4,000

• RM 5,500

Which statements identify the advantages of using a purchases ledger control account as part of the accounting system?

• Compensating errors within the purchases ledger can be found more easily

• Errors of commission within the purchases ledger will be detected

• The honesty of a staff working on the accounts of trade payables is checked

• The total amount owed by trade payables can be ascertained quickly