Amalgamated Components was a private company until it admitted additional shareholders by selling shares on the Stock Exchange.

Amalgamated Components can now be described as a

(A) Partnership

(B) Statutory Corporation

(C) Public Limited Company

(D) Private Limited Company

Cash Sales $10,000

Credit Sales $45,000

Stock at Hand $40,000

Drawings $8000

Cash Purchase $12000

Credit Purchase $20200

From the information above, what is the correct closing total for the Sales Account?

(A) $47 000

(B) $49 000

(c) $55 000

(D) $59 000

Which of the following would NOT appear in a cash book?

(A) Payment for goods $100

(B) Goods sold on credit $100

(C) Goods sold for cheque $100

(D) Goods bought for cash $100

The balance of an Accounts Payable's Account is entered in the balance sheet under the heading

(A) capital

(B) fixed assets

(C) current assets

(D) liabilities

The MAIN purpose of preparing -financial statements is to

(A) determine gross Profit

(B) make informed financial decisions

(C) meet the objectives of the business

(D) determine whether capital has increased

In order to avoid writing numerous cheques for small amounts, a firm may set up a

(A) general ledger

(B) general journal

(C) petty cash fund

(D) standing order with a bank

A businessman offers a discount for prompt payment for goods purchased. Under which column in his Three-Column Cash Book, would this be entered?

(A) Bank

(B) Cash

(C) Discount allowed

(D) Discount received

When a proprietor withdraws cash or other assets from a business. what effect does it have on drawings or capital?

(A) Capital is decreased.

(B) Capital is increased.

(C) Drawings are decreased.

(D) Neither drawings nor capital is affected.

The Trial Balance is prepared by using balances from the

(A) Ledger

(B) Journal

(C) Sales book

(D) Purchases book

Which of the following is NOT a nominal account?

(A) Furniture

(B) Commission

(C) Carriage Inwards

(D) Discount Allowed

The formula for working capital is

(A) current assets less current liabilities

(B) fixed assets less current liabilities

(C) fixed assets less current assets

(D) total assets less total liabilities

Depreciation in accounting terms can be defined as the

(A) increase in value of an asset over time

(B) money saved to replace a fixed asset

(C) cost of using a fixed asset for an accounting period

(D) straight line method or reducing balance method used by a business

When a Trial Balance fails to agree, the difference is entered in the

(A) Control Account

(B) Provision Account

(C) Reserve Account

(D) Suspense Account

How does an increase in bad debts affect a sole trader's financial statements?

(A) Increases the net profit

(B) Decreases the gross profit

(C) Increases the gross profit

(D) Decreases the net Profit

Which of the following accounts shows how profits and losses are shared among partners?

(A) Current

(B) Appropriation

(C) Profit and Loss

(D) Income and Expenditure

According to the Partnership Act, if there is no Deed of Partnership, the amount of profit to be received by EACH partner would be

(A) in equal shares

(B) 5% of net profit

(C) 5% on capital invested

(D) in proportion to capital invested

A standing order of $25 for insurance appears in the debit column of the bank statement. This amount does not appear in the cash book. How is this item treated in order to update the cash book?

(A) Credit the bank account with $25.

(B) Debit the bank account with $25.

(C) Add $25 to the bank statement balance.

(D) Subtract $25 from the bank statement balance

Control accounts are kept in order to assist management in

(A) limiting expenditure

(B) limiting drawings

(C) increasing profits

(D) locating errors

If the members of a business organization form its management and credit committees, the entity (or organization) can best be described as a

(A) sole trader

(B) partnership

(C) corporation

(D) co-operative

Which of the following is NOT considered for a source document for the payroll?

(A) Clock card

(B) Attendance register

(C) Medical certificate

(D) Electronic time card

ln a co-operative society, the daily affairs are administered by

(A) the chairman of the board

(B) a majority of shareholders

(C) all members meeting together

(D) persons elected or appointed to do SO

When a company declares a dividend of 15%, the dividend warrant sent to a shareholder who owns 1,500 ordinary $1 shares is

(A) $100

(B) $225

(C) $1,500

(D) $1,515

The Trading and Profit and Loss Account is used when a cooperative is

(A) paying dividends

(B) providing services

(C) setting aside revenues

(D) buying and selling goods

The reward of profit received by a shareholder in a limited company is called

(A) interest

(B) drawings

(C) dividend

(D) commission

A business with more than one owner records the division of profit in which of the following accounts?

(A) Capital Account

(B) Trading Account

(C) Appropriation Account

(D) Profit and Loss Account

The main reason why a sole proprietor may consider joining with one or more persons to form a partnership is

(A) the business would attract more customers

(B) the business would be recognized by the government

(C) he can work less if many people are involved in the business

(D) the business would get additional capital and management skills

In a partnership, which of the following transactions is compulsory?

(A) Paying of salaries

(B) Interest on capital

(C) Interest on drawings

(D) Sharing of profits or losses

Which of the following items can be used to adjust the Cash Book balance before preparing a Bank Reconciliation Statement?

(A) Direct transfers and bank lodgements

(B) Direct transfers and dishonoured cheques

(C) Bank lodgements and unpresented cheques

(D) Dishonoured cheques and unpresented cheques

How does an increase in bad debt affect a sole trader's financial statements?

(A) Decrease the gross profit

(B) Increase the gross profit

(C) Decrease the net profit

(D) lncrease the net profit

A debt is considered a 'bad debt' if the debtor

(A) pays late

(B) fails to pay

(C) clears the debt in parts

(D) does not use money to pay

When money is taken from cash and paid into a bank account, the recording is referred to as

(A) the imprest

(B) a contra entry

(C) cash takings

(D) personal drawings

Which of the following is NOT a nominal account?

(A) Furniture

(B) Commission

(C) Carriage Inwards

(D) Discount Allowed

The purpose of an appropriation account is to

(A) show how the net profit is distributed in a partnership or co-operative

(B) change capital expenditure as agreed upon in the Articles of Association

(C) enter all capital and revenue expenditure as stipulated in the Partnership Act

(D) make appropriate changes related to net profit as agreed upon in the Articles of Association

Inventory at 01 January 2014 $1500

Purchases during the month $1200

Cost of good sold $1400

What is the inventory at the end of January?

A. $300

B. $500

C. $700

D. $1300

A customer who owed $20 000

returned goods valued at $3000.

He then settled his outstanding balance by paying $ 15 300

The discount allowed to this customer is

A. $7,700

B. $4,700

C. $3,000

D. $1700

At the end of the year the capital of a business was $33 000. At the beginning of the year the capital was $28 000. During the year the owner withdrew $2000 for personal use. What is his net profit for the year?

A. $ 5000

B. $ 7000

C. $30 000

D. $61 000

Eastman Kodak Company reports land on its balance sheet at the amount paid to acquire it, even though the estimated fair market value is greater.

Yahoo, Inc. recognizes depreciation expense for a machine over the 2-year period during which that machine helps the company earn revenue.

_______________ graphic representation of a general ledger account, and is used to analyze transactions.

_______________ graphic representation of a general ledger account, and is used to analyze transactions.

How do you increase the revenues account?

How do you increase a payable account?

Money owed to a vendor for merchandise, equipment, or other supplies is called:

Which of the following can be found on both the income statement and on the balance sheet

Office equipment was purchased for $155,000. Its useful life is 5 years and the residual value is $20,000.

What is the depreciation expense for the second year?

Office equipment was purchased for $155,000. Its useful life is 5 years and the residual value is $20,000.

The total net book value at the beginning of year 4 is

Credit Committee is A group of people responsible for assessing the credit standing and ability to repay debt of prospective borrowers of a lending institution.

If the members of a business organization form its management and credit committees, the entity (or organization) can best be described as a

Control accounts(Sales and Purchases control)are kept in order to assist management in

Mrs Allen invested $20 000,Mrs Brown invested $5000 and Mr Cable invested $5 000 in the same business. The loss sustained during the year was $ 1000.

The Partnership Agreement is silent on the item of losses, although profits are to be split in the ratio 2:2:1 in favor of Allen, Brown and Cable respectively.

How much of the loss must be borne by Mr Cable?

Edward Broomes has just started a business. He owns a motor car valuing $20,000 and a truck valuing $45,000. He decides to bring the truck into the business. In determining the total value of the business’s fixed assets he does not include the value of the motor car. Which accounting concept is Edward Broom observing?

[ONLY THE TRUCK]

Fruit and Cake are in partnership. At the end of the trading period Fruit has a debit balance of $1 525 on her account. What is the significance of the balance on Fruit’s current account?

[Think about the nature of Capital Accounts, think about how they work before answering. Which side the owners contribute from and which side they receive from]

Nate began his retail business with $80 000 capital. Drawings during the year amount to $15 000 and his closing capital was $70 600.

What was the amount of his net profit?

An asset purchased for $1,000 is depreciated at 10% per annum using the diminishing balance method.

What would be the value of the asset at the beginning of the third year?

From which of the following items in the Trading Account should Return Outwards be deducted?

John Jones buys goods on credit from Henry Stokes for $15.

The correct entry for recording this transaction in the books of Henry Stokes is a

A trade discount can be described as an amount deducted from the

If a buyer’s invoice has been overstated the seller should send him a

In a partnership a partner, Mr. B., takes home merchandise costing $80.

This amount should be charged to

Which of the following items can be used to adjust the Cash Book balance before preparing a Bank Reconciliation Statement?

Which of the following groups of accounts are found in the Purchases Ledger control A/C?