Accounting Quiz only lth

Which one of the following can be recorded on credit balance of the payables ledger account?

• The company made the purchase returns to supplier

• The company purchases goods and pays in cash

• The company takes the settlement discount

• The company purchases goods on credit

Which TWO of the following are shown in credit side of the trial balance?

• Drawings

• Payables

• Sales

• Irrecoverable debts

What should an accountant do if a reliable estimate of probable outflow of resources to settle a present obligation can not be made in accordance with IAS 37 - "Provisions, contingent liabilities and contingent assets"?

• It shall be recognised as a liability

• It shall be recognised as a provision

• It shall be disclosed as a contingent liability

• None of the above

Which of the following events after the reporting period would normally qualify as non adjusting events according to the IAS 10- Events after the reporting period?

• An irrecoverable debt suddenly being paid.

• The bankruptcy of a credit customer with a balance outstanding at the end of the reporting period.

• A change in the rate of tax, applicable to the previous year.

• A sudden decline in the value of property held as a long-term asset.

Which of the following statements apply when producing a consolidated statement of financial position?

(i)            All intra-group balances should be eliminated.

(ii)          Intra-group profit in year-end inventory should be eliminated.

(iii)         Closing inventory held by subsidiaries needs to be included at fair value.

• (i) only

• (iii) only

• (i) and (ii) only

• (i), (ii) and (iii)

According to the IAS 2, the following statements about the valuation of inventory are Incorrect:

Inventory items are normally to be valued at the higher of cost and net realisable value

The cost of goods manufactured by an entity will include materials and labour only

• True

• False

According to the IAS 16, the depreciation method should be reviewed periodically. If there has been a significant change in the expected pattern of economic benefits from those assets, the method should be changed to suit this new pattern.

• True

• False

Is the following statement about prepayments and accruals true or false?

“Prepayments and Accruals are examples of applying the concept of cash basis in accounting”.

• True

• False

The following statement is true or false?

A purchase return of $50 has been wrongly posted to the debit of the sales returns account, but has been correctly entered in the supplier's account. Therefore, the trial balance is $50 higher on the debit side.

• True

• False

Is the following statement about the presentation of trade receivables in SoFP true or false?

Trade receivables in the statement of financial position are shown net of any receivables allowance.

• True

• False