Accounting Quiz Year 1

A motor vehicle was purchased for $12 000 on 1 January 2015. Its estimated residual value was $7000 and expected life 5 years. Depreciation was calculated on a month-by-month basis using the straight-line method. It was sold on 30 June 2017 and there was a loss on disposal of $2560. What were the sale proceeds?

• $3440

• $4352

• $6440

• $6940

The following information relates to a motor vehicle part-exchanged for a new vehicle in the year.

The balance payable for the new vehicle was paid from the business bank account. How much was the payment from the bank account?

• $9000

• $10 000

• $15 000

• $20 000

A trader bought a machine on 1 January 2015. He depreciated it at the rate of 10% per annum using the straight-line method, and he sold it on 1 January 2017 for $4000. The profit on disposal was $200. How much had the machine cost on 1 January 2015?

• $4560

• $4750

• $5040

• $5250

Which statement identifies why depreciation is provided on non-current assets?

• so that the cost is allocated to periods that benefit from them

• so that the realisation concept is applied

• so that there is enough cash in the business to replace them

• so that they are shown at market value

A used motor vehicle was part exchanged for a new motor vehicle. The balance of the purchase cost of the new motor vehicle was settled by cheque. What were the entries to record the part-exchange value?

• debit bank and credit disposal

• debit bank and credit motor vehicles

• debit motor vehicles and credit bank

• debit motor vehicles and disposal

The bank statement of a business shows a credit balance of $1570 at 31 December. The following differences were discovered on comparing the cash book with the bank statement.

A direct debit of $230 was shown as $320 in the cash book. What is the updated cash book balance at 31 December?

• $930

• $1020

• $2030

• $2120

At the financial year end of a business, the following information is available.

What is the current balance in the cash book?

• $400 credit

• $400 debit

• $550 credit

• $550 debit

Amit compared his bank statement with his cash book.

How did Amit deal with the items revealed by this comparison?

• updating his cash book :

  bank charges

  including in bank reconciliation statement :

  timing differences and bank errors

• updating his cash book :

  bank charges and bank errors

  including in bank reconciliation statement :

  timing differences

• updating his cash book :

  timing differences and bank errors

  including in bank reconciliation statement :

  bank charges

• updating his cash book :

  timing differences

  including in bank reconciliation statement :

  bank charges and bank errors

What do the debit side closing balance carried down and the credit side opening balance brought down represent in a sales ledger control account?

• debit side closing balance carried down :

  owing from customers
  

  credit side opening balance brought down :

  owing from customers

• debit side closing balance carried down :

  owing from customers

  credit side opening balance brought down :

  owing to customers

• debit side closing balance carried down :

  owing to customers

  credit side opening balance brought down :

  owing from customers

• debit side closing balance carried down :

  owing to customers

  credit side opening balance brought down :

  owing to customers

A company's trial balance includes a suspense account. It was found that the only errors were

discounts received for $240 and discounts allowed of $312. which had both been entered on the incorrect sides of the respective ledger accounts.

What is the double entry required to clear the suspense account balance?

• dr. Discounts Allowed $312
  cr. Discounts Received $240

  cr. Suspense $72

• dr. Discounts Allowed $624
  cr. Discounts Received $480

  cr. Suspense $144

• dr. Discounts Received $240

  dr. Suspense $72

  cr. Discounts Allowed $312
  

• dr. Discounts Received $480

  dr. Suspense $144

  cr. Discounts Allowed $624