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WorksheetsREVISION 1 : TOPIC 7,8&9[AR,INVENTORIES & NCA]
Total questions: 20
Worksheet time: 10mins
When the allowance method is used to account for uncollectible accounts, Bad Debt Expense is debited when
a sale is made.
an account becomes bad and is written off.
management estimates the amount of uncollectibles.
a customer's account becomes past-due.
When an account becomes uncollectible and must be written off,
Bad Debt Expense should be credited.
Allowance for Doubtful Accounts should be credited.
Sales Revenue should be debited.
Accounts Receivable should be credited.
Two methods of accounting for uncollectible accounts are the
allowance method and the accrual method.
direct write-off method and the accrual method.
direct write-off method and the allowance method.
allowance method and the net realizable method.
Two bases for estimating uncollectible accounts are:
percentage of current assets and percentage of sales.
percentage of assets and percentage of sales.
percentage of receivables and percentage of sales.
percentage of receivables and percentage of total revenue.
What are the double entries to record bad debt?
dr. Bad Debt, cr. Allowance for Doubtful Debts
dr. Profit and Loss, cr. Bad Debt
dr. Bad debt, cr. Profit and Loss
dr. Bad debt, cr. Accounts Receivable
What are the double entries to record a decrease in allowance for doubtful debts?
dr. Accounts Receivables, cr. Allowance for doubtful debts
dr. Bad debts, cr. Allowance for doubtful debts
dr. Allowance for doubtful debts, cr. Decrease in Allowance for doubtful debts
dr. Allowance for doubtful debts; cr. Accounts Receivables
dr. Decrease in Allowance for doubtful debts, cr. Allowance for doubtful debts
What do we mean by inventories?
Inventories are goods purchased for own used and held in a company warehouse
Inventories are goods and services sold to customers in normal business operation
Inventories are goods purchased for resale in the normal course of business
Inventories are goods purchased for resale within the two years it was acquired
In perpetual inventory system
the balance is adjusted at the end of the accounting period
the balance of goods is constantly moving
the ending inventory is only updated when the physical inventory is conducted
is suitable for a small business
In the first-in, first-out (FIFO) method
the last units acquired are the first units to be sold
the last units acquired are the last units to be sold
the first units acquired are the first units to be sold
the first units acquired are the last units to be sold
The most outdated purchases included in the inventory value is found in the _________________ method.
standard costs
weighted average
last-in, first-out (LIFO)
first-in, first-out (FIFO)
The inventory of a business will increase when there are :
sales and sales returns
purchase and purchase returns
sales and purchase returns
purchase and sales returns
Physical stock count will be made at the end of each accounting period to enable the determination of cost of goods sold. This statement is suitable for
Periodic inventory system
Perpetual inventory system
Inventory record will be updated continuously after each purchase or sale, these is an advantages of
Periodic inventory system
Perpetual inventory system
Depreciation is a process of
asset devaluation
cost accumulation
cost allocation
asset valuation
Which of the following expenses could considered as capital expenditure?
petrol costs for motor van
depreciation of motor van
repairs to motor van
installation of air-condition unit on motor van
The Net book value of depreciable asset is the difference between
depreciation and accumulated depreciation
cost and accumulated depreciation
cost and depreciation expense
none of above
Intangible non-current assets
cannot be substantially touched but are significant to the company
can be converted to cash within one year
are to be used in a daily operation and to pay ongoing expenses
include accounts receivable, inventory, prepaid expenses and cash
How does depreciation in the reducing balance method affect the statement of profit or loss and other comprehensive income?
large amount at the beginning of the period and reduced from time to time
consistent amount from the year it is acquired until the end of its useful life
small amount is charge at the beginning of the period and increased as time goes by
the amount is divided by the useful life of the asset
The book value of a fixed asset is always equal to its fair market value.
TRUE
FALSE
If the cash proceeds from the sale of a fixed asset exceed its book value, a gain on disposal occurs.
TRUE
FALSE
