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Assessment Paper 1 - POA

Total questions: 60

Worksheet time: 29mins

Name
Class
Date
1.

All are examples of current assets except

a)

bank

b)

debtors

c)

loans

d)

inventory

2.

What is the correct order for current assets in the balance sheet?

a)

cash, bank, debtors, stock

b)

stock, debtors, bank, cash

c)

stock, bank, cash, debtors

d)

debtors, stock, bank, cash

3.
According to which principle the same accounting methods should be used each year :
a)
prudence
b)
full disclosure materiality
c)
materiality
d)
consistency
4.

Which one is right?

a)

Asset = Owner's equity + Liability

b)

Asset = Owner's equity - Liability

c)

Asset + Owner's equity = Liability

d)

Asset + Owner's equity = expense

5.

All businesses are started with the aim of making ...

a)

Capital

b)

sound investments on the stock market

c)

A profit

d)

their owners popular

6.

Accounting is the process that involves

a)

revealing how much money is in the bank

b)

budgeting what will be spent only

c)

reporting to stakeholders about potential profits

d)

preparing/presenting, analysing and interpreting financial statements

7.

Two common financial statements prepared are the

a)

Trading and Profit and Loss Account and Balance Sheet

b)

Balance Sheet and Suspense Account

c)

Cash Book and Trading and Profit andLoss Account

d)

Control Account and Balance Sheet

8.

Following the correct accounting procedures, according to moral values and company ethical standards when available is __________________________________.

a)

ACCOUNTING ETHICS

b)

ENRON

c)

ARTHUR ANDERSEN

d)

BERNIE MADOFF

9.

Taking items from your employer is considered to be unethical behavior.

a)

True

b)

False

10.

A conflict of interest is a conflict between self-interest and

a)

professional obligation.

b)

unfair practices

c)

a personal obligation.

d)

another person’s self-interest

11.
The __________concept states that businesses should be treated as if they will continue to stay in business.
a)
going concern
b)
business entity
12.
The accounting principles that states companies and owners should be account for separately..
a)
Business entity concept
b)
Going concern concept
13.

Owners equity just refer to the Capital of the owner

a)

True

b)

False

14.

A decrease to Accounts Payable is a

a)

debit

b)

credit

15.

An asset account is increased with a _________.

a)

debit

b)

credit

16.

The normal balance for Building is a __________.

a)

debit

b)

credit

17.

An increase to a revenue account is a ____________.

a)

debit

b)

credit

18.

A financial statement that reports assets, liabilities, and owner's equity on a specific date.

a)

Income Statement

b)

Statement of Owner's Equity

c)

Balance Sheet

d)

Statement of Cashflows

19.

What are the items (accounts) shown in the Income Statement?

a)

Revenues and Expenes

b)

Assets, Liabilities and Capital

c)

Beginning Capital, Net Income and Withdrawals

20.

The Right-hand side of a "T" account is called _______.

a)

debit

b)

credit

21.

Sales revenue is a/an ____________.

a)

Expense

b)

Income

c)

Asset

d)

Liability

22.

Salaries expense is a/an ___________.

a)

Expense

b)

Income

c)

Asset

d)

Liability

23.

Fixtures and fittings is a/an ___________.

a)

Non-current asset

b)

Current asset

24.

Cost of sales is a/an _______________.

a)

Income

b)

Asset

c)

Expense

d)

Liability

25.

Cash at bank (overdraft) is a/an ________________.

a)

Non-current asset

b)

Current asset

c)

Non-current liability

d)

Current liability

26.

Discount allowed is a/an ______________.

a)

Expense

b)

Asset

c)

Income

d)

Liability

27.

Trade receivables is a/an ___________.

a)

Income

b)

Current asset

c)

Non-current asset

d)

Current liability

28.
One of these statements about the profit and loss account is correct - which one?
a)
It helps measure the success of a business
b)
It shows the assets and liabilities at a point in time.
c)
It measures the net cash flow of a business
d)
It provides evidence about a firm's liquidity.
29.
The formula of sales revenue less cost of goods sold enables you to calculate
a)
Net profit
b)
Operating profit
c)
Retained profit
d)
Gross profit
30.
Which of these actions might improve gross profit but increase overheads?
a)
Increase the shareholder dividend by 10%
b)
Increase advertising for a new product
c)
Negotiate better prices from a supplier
d)
Increase selling prices by 5%
31.
The trading account on a P&L shows
a)
How net profit is distributed
b)
The difference between a firm's sales revenue and direct costs of trading
c)
The amount of profit or loss made
d)
The expenses, interest and tax
32.

The profit and loss account is also known as the income statement.

a)

TRUE

b)

FALSE

33.

COGS (or cost of sales when referring to services) is workedout by the formula:

a)

= Opening stock + Purchases - Closing stock

b)

= Sales revenue - Cost of goods sold

34.

Sales revenue is the income earned from selling goods and services over a given period.

a)

yes

b)

no

35.

gross profit is the direct cost of producing or purchasing the goods that were sold during that period.

a)

TRUE

b)

FALSE

36.

...........................are the indirect or fixed costs of production, e.g. administration charges, management salaries, insurance premiums (for buildings, vehicles and stock) rent of land and property, and stationery costs.

a)

Expenses

b)

dividends

37.

...........................are the indirect or fixed costs of production, e.g. administration charges, management salaries, insurance premiums (for buildings, vehicles and stock) rent of land and property, and stationery costs.

a)

Expenses

b)

dividends

38.

Purchase goods on credit from Sofea.

a)

Sales Journal

b)

Purchase Journal

c)

Cash Book

d)

Purchase Return Journal

39.

Cash sales to Aminah

a)

Cash Book

b)

Sales Journal

c)

Purchase Journal

d)

Sales Return Journal

40.

Sold goods on credit to Sun Shine Trading

a)

Sales Journal

b)

Purchase Journal

c)

Sales Return Journal

d)

Cash Sales

41.

Sold goods on credit to Sun Shine Trading

a)

Sales Journal

b)

Purchase Journal

c)

Sales Return Journal

d)

Cash Sales

42.

Which of the following is not a Book of Prime Entry?

a)

Sales Journal

b)

Cashbook

c)

Purchases Journal

d)

Sales Ledger

43.

Which of the following is not a Book of Prime Entry?

a)

Sales Journal

b)

Cashbook

c)

Purchases Journal

d)

Sales Ledger

44.

Cashbook is used to record all cash and bank transactions

a)

True

b)

False

45.

A credit customer returned some damaged goods to the business.

a)

Sales Return Journal

b)

Purchase Return Journal

c)

Purchase Journal

d)

Sales Journal

46.

A receipt is used as a source document for

a)

Credit sales

b)

Credit purchases

c)

Payment of cash

d)

Return of goods to supplier

47.

A cheque counterfoil is the source document for

a)

Return inwards

b)

Return outwards

c)

Payment of cash

d)

Payment of cheque

48.

A cheque counterfoil is the source document for

a)

Return inwards

b)

Return outwards

c)

Payment of cash

d)

Payment of cheque

49.

An article is subject to a 20% trade discount. Its list

price is $600. What is the sale price?

a)

$120

b)

$480

c)

$580

d)

$720

50.

A retailer purchases goods worth $3 000. He receives

30 per cent trade discount and 5 per cent cash

discount. How much should he pay for the goods?

a)

$1 995

b)

$2 095

c)

$2 100

d)

$2 850

51.

On January 12, 1994, a merchant purchased goods

amounting to $120 on the following terms: 5% cash

discount if paid within 30 days. He settled his debt

on February 28, 1994. How much did he pay?

a)

$112

b)

$114

c)

$120

d)

$126

52.

Sell assets on credit

a)

Sales Journal

b)

Purchases Journal

c)

Cash Book

d)

General Journal

53.

owner brings in cash into the company

a)

Sales Journal

b)

Purchases Journal

c)

Cash Book

d)

Special Journal

54.

Buy the goods on a credit basis

a)

Sales Journal

b)

Purchases Journal

c)

Cash Book

d)

General Journal

55.

The main objective of preparing a trial balance is to verify the – – – – accuracy of accounting entries.

(a)  

56.

Returns Outwards A/c generally has a – – – – balance.

(a)  

57.

Returns Outwards A/c generally has a – – – – balance.

(a)  

58.

A Trial Balance is a list of balances of ledger accounts & cash book

a)

True

b)

False

59.
The difference between total revenue and total expenses when total expenses is greater.
a)
Net loss
b)
Net Income
c)
Gross Profit
d)
Asset Income
60.
A financial statement showing the revenue and expenses for a fiscal period.
a)
Income Statement
b)
Balance Sheet
c)
Work Sheet
d)
Trial Balance

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