Cambridge O Level Accounting Quiz

Which action does not reduce the owner’s capital?

• A business expenses paid using a personal cheque

• B cash withdrawn from the business bank account for personal use

• C goods taken from inventory for personal use

• D personal expenses paid using business cash

Which statement correctly describes the accounting equation?

• A capital = assets – liabilities

• B capital = assets + liabilities

• C capital = current assets – current liabilities

• D capital = current assets + current liabilities

What could a credit balance on a ledger account represent?

• A accrued income

• B asset

• C expense

• D 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?

• A bank statement

• B cheque counterfoil

• C paying-in slip

• D petty cash voucher

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

• A credited to the customers’ personal accounts

• B credited to the sales account

• C debited to the customers’ personal accounts

• D debited to the sales account

A customer paid $15 600 to a supplier after receiving a cash discount and a trade discount of 20%. What was the amount of the invoice entered in the purchases journal?

• A $12 480

• B $15 600

• C $16 000

• D $20 000

A trader maintains a petty cash book using the imprest system. The imprest amount is $120. The petty cash transactions during the month of June were: receipt from a customer $21, payments stationery $25, postage $10, cleaning $20, payment to a supplier $40. How much was given to the petty cashier on 1 July to restore the imprest?

• A $46

• B $74

• C $95

• D $120

Paula’s trial balance contains errors. What is the corrected trial balance total?

• A $23 500

• B $24 500

• C $25 500

• D $26 500

The following entry was made in a journal to record the correction of an error. Which error has been corrected?

• A A cheque, $160, was credited to Wasim’s account but no debit entry was made.

• B A cheque, $160, was debited to the bank account but no credit entry was made.

• C A cheque paid to Wasim, $160, was credited to his account and debited to the bank.

• D A cheque received from Wasim, $160, was credited to his account and debited to the bank.

Which statement correctly describes a suspense account?

• A It is an account opened to check for errors in a trial balance.

• B It is a permanent account used to correct the statement of financial position.

• C It is a temporary account used to correct errors of complete reversal.

• D It is an account that is opened when the totals of a trial balance disagree.