Quiz Part 1 (FA1)

Charlotte started a new business on 1 October 20X7. In the year ended 30 September 20X8, she introduced capital of $30,000 and paid $500 per month from her business bank account to her personal bank account. On 30 September 20X8, the net assets of the business were $15,800.

What is the profit or loss of the business in the year ended 30 September 20X8?

• $39,800 loss

• $39, 800 profit

• $8,200 loss

• $8,200 profit

Ravi is preparing his monthly internal accounts and is considering who will use this information.

Which TWO of the following are the most likely users of this information?

• Shareholders

• Management

• Tax authorities

• Suppliers

• Employees

Hanna buys goods on credit with a list price of $800. She pays the supplier early and is given a prompt payment discount of 5%.

What is the correct journal to record the prompt payment discount in the books of Hanna?

• DR Discounts received $40, CR Trade Payables $40

• DR Trade Payables $40, CR Discounts received $40

• DR Bank $40, CR Discounts received $40

• DR Discounts received $40, CR Bank $40

On 1 January 20X5, Hiroto's business had net assets of $42,622. During the year, his business made a profit of $10,400 and he donated a private car to the business with a value of $2,000 The net assets of the business at 31 December 20X5 are $48,782.

What is the amount of drawings taken by Hiroto in the year ended 31 December 20X5?

• $14,560

• $6,240

• $4,240

• $2,240

Which TWO of the following would be a debit balance on a ledger account within a business's general ledger?

• Buildings

• Overdraft

• Drawings

• Capital

• Revenue

What is the principal use of the statement of financial position?

• To report the assets, liabilities and capital of a business at a point in time.

• To report a reliable valuation of the business at a point in time.

• To report how much profit or loss the business has made during the period.

• To report the movements of cash in and out in the business over the period.

Binta has opening net assets of $149,421. She paid $8,000 from her personal bank account into her business bank account in the first month of the year and transferred $56,000 from the business bank account to her personal bank account on the last day of the accounting period. The net assets at the end of the period were $140,347.

What is Binta's profit for the accounting period?

• $17,074

• $38,926

• $46,926

• $57,074

Sakura buys goods for her business with a list price of $1,000 on credit. When they are delivered, she inspects them and finds that 20% of the goods received are faulty. She returns the faulty goods to the supplier.

Which of the following is the correct journal to record the return of the faulty goods?

• DR Purchases $1,000, CR Trade Payables $1,000

• DR Trade Payables $200, CR Purchases $200

• DR Purchases $200, CR Trade Payables $200

• DR Cash $1,000, CR Purchases $1,000

Lin has net assets in her business on 30 June 20X4 of $70,281. The business had net assets on 1 July 20X3 of $64,988. During the year ended 30 June 20X4, the business made a profit of $12,493 and Lin took drawings of $1,000 per month in the period.

What amount of additional capital did Lin introduce into the business in the year ended 30 June 20X4?

Please enter your answer in the box below (numbers only) for the value in $.)

Which TWO of the following phrases would be part of the recognition criteria of a liability?

• Control is retained.

• Probable inflow of resources.

• Future obligation.

• Present obligation.

• An outflow of resources.