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WorksheetsAS Accounting Revision Quiz 3
Total questions: 21
Worksheet time: 28mins
Which accounting treatments illustrate the use of the matching concept?
1 comparing the receipts and payments in the cash book to obtain the balance of inventory at net realisable value rather than cost
2 using the FIFO method of inventory valuation each year
3 charging depreciation on non-current assets
1, 2 and 3
1 and 3 only
2 only
3 only
A company provides the following information.
budgeted overheads $136 000
budgeted labour hours 10 568
actual overheads $146 000
actual labour hours 10 110
What is the overhead absorption rate per labour hour?
$12.87
$13.45
$13.82
$14.44
Actual output exceeds budgeted output.
Which cost is higher than budgeted?
fixed costs per unit
total fixed costs
total variable costs
variable costs per unit
A business absorbs overheads based on machine hours.
During the last quarter it had the following budgeted and actual results.
actual overheads $118 505
actual machine hours 6 230
budgeted overheads $126 725
budgeted machine hours 6 850
By how much were overheads over or under absorbed?
over absorbed by $3250
over absorbed by $8220
under absorbed by $3250
under absorbed by $8220
How is the issue of inventory from stores valued when using FIFO?
It is calculated using the average purchase price of goods.
It is calculated using the price paid for the earliest delivery of goods.
It is the same as the current replacement cost.
It is the same as the most recent price paid for the goods.
Samuel manufactures a single product. Total cost per unit is $70 when production is 100 units per week, and $62.50 when production is 160 units per week.
What are the total fixed costs per week?
$450
$750
$1200
$2000
Which item is a direct cost?
cost of production materials
factory supervisor’s salary
machine cleaning materials
stores staff wages
X and Y are in partnership. They admit Z as a new partner. The profit sharing ratio will be 2 : 1 : 1 respectively. Goodwill is valued at $100 000. Goodwill is not to be retained in the books of account.
Other assets are revalued at $40 000 in excess of their net book value.
Z introduces $250 000 cash and office equipment valued at $30 000.
What is Z’s capital account balance after his admission?
$255 000
$265 000
$305 000
$315 000
A partnership revalues its non-current assets upwards.
What are the ledger entries to record this?
debit non-current assets
credit bank
debit non-current assets
credit partners’ capital accounts
debit non-current assets
credit partners’ current accounts
debit non-current assets
credit revaluation reserve
Why is goodwill adjusted in the books of account when a new partner is admitted?
A more accurate value of non-current assets is shown in the statement of financial position.
Original partners can be credited for their efforts in building up the partnership business.
Partners can take higher drawings as a result of their share of the goodwill.
The new partner knows how much they have to introduce as capital.
A trader provides the following financial information for the year ended 31 December.
gross margin 20%
cost of goods sold $220 000
drawings $7 000
profit for the year $28 000
How much are expenses?
$9000
$16 000
$20 000
$27 000
The table shows transactions relating to a product during July. There was no opening inventory.
Of the remaining units, 8 are damaged and therefore have no value.
What is the profit for July?
$68
$100
$148
$180
The draft financial statements of a business show a profit for the year of $64 000 before taking account of the following:
1 the reduction of the provision for doubtful debts by $300
2 the purchase of office stationery costing $2400 which has not been entered in the books; only one-sixth of this stationery was used by the year end.
What is the corrected profit for the year?
$61 900
$63 900
$64 100
$64 300
A business provides the following information.
revenue $140 000
opening inventory $22 000
closing inventory $24 500
purchases $120 000
Goods are sold at cost plus 25%.
The owner has taken goods for own use but has not recorded these as drawings.
What is the value of the goods taken for own use?
$5500
$10 500
$12 500
$17 500
A trial balance showed a provision for doubtful debts as $1350. Trade receivables were $50 320 which included a debt of $500 which was irrecoverable.
Which entry was required in the provision for doubtful debts account if the closing balance was to be 5% of trade receivables?
$1141 credit
$1141 debit
$1166 credit
$1166 debit
The picture shows balances related to Ladha’s business.
What was Ladha’s profit for the year ended 31 March 2016?
$12 000
$32 000
$36 000
$56 000
6 A suspense account shows a debit balance of $350.
What could have caused this?
A purchase of $350 was debited to the rent account.
A purchase of $350 was omitted from the purchases journal.
A sale of $350 was debited to the sales account and credited to the sales ledger control account.
The sales journal was overcast by $350.
A purchases ledger control account was prepared but contained a number of errors (see picture).
What was the correct balance carried down?
$47 100
$48 400
$60 840
$67 840
Why is a sales ledger control account used?
1 to control discounts received
2 to ensure credit customers pay promptly
3 to provide a trial balance figure for trade receivables
1 and 2
1 only
2 and 3
3 only
During the year ended 31 December 2012 a business purchased a vehicle for $23 500. On 30 September 2015 it was sold for $3500. Depreciation was charged at 20% per annum using the straight line method. A full year’s depreciation was charged in the year of purchase and the year of disposal.
What was the profit or loss on disposal of the vehicle?
$1200 loss
$1200 profit
$5900 loss
$5900 profit
Which item should be treated as capital expenditure?
cost of carriage on the purchase of a non-current asset
cost of replacement of part of a non-current asset
depreciation of a non-current asset
repairs to a non-current asset
