Free Printable POA Mock Examinations

1.

Owner's equity can decrease when....

a)

the business sells its motor van and deposits the proceeds into the busness' bank account

b)

the business repays a bank loan

c)

the proprietor draws out business cash to pay for a personal loan

d)

the proprietor draws out from the business bank account for office use

2.

Which of the following is not an expense?

a)

Carriage on Purchases

b)

Carriage on Sales

c)

Discount Allowed

d)

Discount Received

3.

Which of the following is NOT shown in the Profit and Loss account

a)

Carriage on Purchases

b)

Carriage on Sales

c)

Discount Allowed

d)

Discount Received

4.

What is the name of the book of original entry used to record the sale of fixed assets on credit?

a)

General Journal

b)

Returns Outwards Journal

c)

Sales Journal

d)

Sales Returns Journal

5.

Rate of turnover is given by.....

a)

sales divided by stock

b)

cost of sales divided by average stock

c)

sales at cost divided by closing stock

d)

sales divided by purchases

6.

A supplier's account in the books of a business shows a credit balance of $780. What does this mean?

a)

The business owes the supplier $780

b)

The business has paid the supplier $780

c)

The supplier owes the business $780

d)

The supplier has paid the business $780

7.

The Cash Book shows an overdrawn balance of $920 but the Bank Statement showed a credit balance $1 120. Which of the following could have caused the difference?

a)

A credit transfer of $2 040

b)

A standing order of $200

c)

An uncredited deposit of $2 040

d)

An unpresented cheque $200

8.

The discount received $35 was wrongly recorded as discount allowed. What is the effect on the net profit ?

a)

Net Profit is overstated by $35

b)

Net Profit is overstated by $70

c)

Net Profit is understated by $35

d)

Net Profit is understated by $70

9.

$57 paid for rent was entered in both the Rent Account and the Bank Account as $75. What are the double entries required to correct these errors?

a)

Debit Bank $18 Credit Rent $18

b)

Debit Bank $57 Credit Rent $18

c)

Debit Rent $18 Credit Bank $18

d)

Debit Rent $57 Credit Bank $57

10.

A fixed asset which has a book value of $4 600 is sold for

$3 900. This will result in.....

a)

Gain of $700

b)

Gain of $3 900

c)

Loss of $700

d)

Loss of $3 900

11.

Which of the following items cannot be recorded in the Partnership Profit and Loss Appropriation Account?

a)

Drawings by partner

b)

Interest on Capital

c)

Interest on Drawings

d)

Partners Salaries

12.

A machine which cost $20 000 has an estimated life of 9 years and a scrap value of $2 000. What is the annual depreciation calculated on a straight line basis.

a)

$1 000

b)

$2 000

c)

$18 000

d)

$20 000

13.

The maximum number of partners in a partnership is

a)

5

b)

10

c)

20

d)

50

14.

The method of computing depreciation based on the net book value of an asset at the beginning of an accounting period is also known as

a)

Straight Line method

b)

Reducing Balance method

c)

Revaluation method

d)

Usage method

15.

Which of the following statements is correct?

a)

assets + liabilities = capital

b)

assets - liabilties = capital

c)

assets + capital = liabilities

d)

liabilities - assets = capital

16.

Which of the following is NOT a fixed asset?

a)

Fixtures and Fittings

b)

Motor Vehicles

c)

Premises

d)

Stock

17.

When a customer has been overcharged, the seller would send the customer a

a)

Credit Note

b)

Debit Note

c)

Invoice

d)

Statement of Account

18.

When a creditor's account is settled by cheque, the firm's

a)

assets and liabilities decrease

b)

assets and liabilities increase

c)

assets and liabilities remain unchanged

d)

assets increase and liability decrease

19.

The trial balance shows a provision for bad debt of $380 and debtors $8 000. If the provision for bad debts to be 5% of the debtors, what would be the amount recorded in the Profit and Loss Account?

a)

$20 (Dr)

b)

$20 (Cr)

c)

$400 (Dr)

d)

$400 (Cr)

20.

Why do firms give cash discount?

a)

to discourage credit transactions

b)

to encourage prompt payment

c)

to increase transactions

d)

to increase turnover

21.

A firm purchased goods on credit at list price $1 600 less 25% trade discount 1/4 of the goods purchased were returned later. What is the amount due to the supplier?

a)

$800

b)

$900

c)

$1 000

d)

$1 200

22.

Which of the following is shown on the credit side of Trial Balance

a)

capital

b)

drawings

c)

purchases

d)

sales returns

23.

Net Profit is determined the

a)

balance sheet

b)

profit and loss account

c)

trading account

d)

trial balance

24.

Which of the following does not appear in the Balance Sheet?

a)

bank overdraft

b)

cash at bank

c)

closing stock

d)

opening stock

25.

From the following information, calculate the owner's equity of the firm:

$

Motor Vehicle 7 000

Land & Building 20 000

Cash in hand 300

Stock 3 000

Debtors 900

Creditors 500

Bank Overdraft 700

a)

$29 100

b)

$30 000

c)

$30 700

d)

$32 400

26.

An invoice is sent to the buyer because

a)

Goods have been sold on a cash basis

b)

Goods have been damaged

c)

Goods have been purchased on credit

d)

Goods have been overcharged

27.

The Sales Ledger of a business contains

a)

Creditors accounts

b)

Debtors accounts

c)

Sales account

d)

Sales returns account

28.

The source document of the Returns Inwards Journal is the

a)

debit note

b)

credit note

c)

invoice

d)

receipt

29.

Which of the following is a credit item in the Trial Balance

a)

Carriage Inwards

b)

Carriage Outwards

c)

Return Inwards

d)

Return Outwards

30.

Which of the following should NOT be classified as current liability?

a)

Accrued expenses

b)

Bank overdraft

c)

3 year Bank Loan

d)

Trade Creditors

31.

Which of the following best describes unpresented cheques?

a)

cheques issued by the bank but nor recorded in firm's books

b)

cheques issued by the firm but yet to be recorded in the bank statement

c)

cheques received by the firm but yet to be recorded in the bank statement

d)

cheques received by the bank but yet to be recorded in the firm's books

32.

A firm returned goods which were bought earlier on credit from Ian Paul. What entry must be made in the firm's books to record this transaction?

a)

DEBIT Ian Paul CREDIT Goods

b)

DEBIT Goods CREDIT Ian Paul

c)

DEBIT Ian Paul CREDIT Returns Outward

d)

DEBIT Returns Outward CREDIT Ian Paul

33.

A supplier offers the following discounts. Trade discounts of 20% off list price and cash discounts of 5%.

What is the lowest amount that will be paid for goods with a list price of $6400?

a)

$4 800

b)

$4 864

c)

$4 964

d)

$5 120

34.

Which transaction will entered in the Sales Journal?

a)

Carriage on Sales

b)

Sale of fixed assets

c)

Sale of goods for cash

d)

Sale of goods on credit

35.

A credit entry is used to record

a)

a decrease in capital

b)

a decrease in revenue

c)

a increase in capital

d)

an increase in expenses

36.

Goods for re-sale are bought for cash. What are the entries in the books of the purchaser?

DEBIT CREDIT

a. Cash Purchaser

b. Cash Supplier

c. Purchaser Cash

d. Supplier Cash

a)

a

b)

b

c)

c

d)

d

37.

Which of the following items will not appear in a Purchases Ledger Control Account?

a)

discount received

b)

interest charged on overdue account

c)

refund for overpayment

d)

returns outwards

38.

What is the effect of treating revenue expenditure as capital expenditure?

a)

fixed assets are increased

b)

fixed assets are reduced

c)

gross profit is increased

d)

net profit is increased

39.

The acid test ratio is the ratio of

a)

Cash to creditors and accruals

b)

Cash and bank to current liabilities

c)

Cash, Bank and debtors to creditors and accruals

d)

Cash, bank and stock to creditors and prepayments

40.

If current liabilities exceed current assets, there is a

a)

negative owner's capital

b)

positive owner's capital

c)

negative working capital

d)

positive working capital

41.

The procedure to write off a bad debts is

a)

DEBIT debtors CREDIT Bad Debt Provision

b)

DEBIT Profit and Loss CREDIT Bad debts

c)

DEBIT Bad Debt Provision CREDIT Profit and Loss

d)

DEBIT Bad debts CREDIT Debtors

42.

An employee's pay before tax deductions is known as

a)

Total pay

b)

Net pay

c)

Gross Pay

d)

Take home pay

43.

A suspense account is opened when

a)

an error is discovered in the ledger

b)

the trial balance cannot be made to balance

c)

the trial balance does not agree with the balance sheet

d)

the balance sheet cannot be made to balance

44.

Gross Profit is the difference between

a)

sales and cost of purchases

b)

Purchases and sales

c)

net sales and cost of sales

d)

sales and net purchases

45.

At the end of the accounting period a partner's drawings should be transferred to the

a)

debit of his capital account

b)

credit of his current account

c)

debit of his current account

d)

credit to his capital account

46.

An organisation purchased an asset for $20 000 and depreciates it at 20% per annum per reducing balance. The amount of the depreciation for the third year would be

a)

$2 000

b)

$2 560

c)

$3 200

d)

$4 000

47.

A business has assets valued at $225 000and liabilities at $97 000. The owner values the business at $150 000. What is the goodwill?

a)

$22 000

b)

$53 000

c)

$73 500

d)

$128 000

48.

A business carried on by two or more persons with a view of sharing profit is called a

a)

private company

b)

public limited company

c)

partnership

d)

proprietorship

49.

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

a)

commission

b)

interest

c)

drawings

d)

dividend

50.

Which of the following account balances are transferred to the trading account of a sole trader?

I Furniture and Fittings

II Stock

III Purchase Returns

IV Cash

V Sales

a)

I, II and IV only

b)

II, III and IV only

c)

II, III and V only

d)

I, IV and V only

51.

P. Hunte has a manufacturing business; his raw material cost $1 900. Rates and rent total $2 000 and factory wages amount to $2 500. The number of units produced is 640. What is the cost of one unit?

a)

4

b)

6

c)

10

d)

13

52.

The information below was extracted from the Cash Book of Candy Shack:

Balance per Cash Book $560

Total Unpresented cheques $120

Lodgement not entered on

the Bank Statement $150

a)

$120

b)

$150

c)

$340

d)

$530

53.

Which of the following will be recorded as Capital Expenditure?

a)

purchase of equipment

b)

payment of rent for the building

c)

payment of repairs to office machine

d)

purchase of drinks for the office party

54.

A person who lends money on interest to a Limited Liability Company is called a

a)

Debenture Holder

b)

Shareholder

c)

Stockholder

d)

Director

55.

A Limited liability company os owned by:

a)

the State

b)

private shareholders

c)

the public at large

d)

a limited numbers of partners

56.

Tom, Percy and John formed a partnership and agreed that profits were to be shared in the ratio 1:1:2 respectively. The net profit for the year was $18 900. What is John's share of the profit?

a)

$4 725

b)

$9 450

c)

$14 175

d)

$18 900

57.

Which of the following would be recorded in the Cash Book?

I Bank reconciliation statement

II Cash and Bank transactions

III Discounts received and discounts allowed

IV Items sold on credit

a)

I and III only

b)

II and III only

c)

II and IV only

d)

IIII and IV only

58.

How is prime cost calculated?

a)

Direct materials + carriage outwards + other direct costs

b)

Direct materials + carriage inwards + other direct costs

c)

Direct materials + carriage inwards + indirect expenses

d)

Direct materials + carriage outwards + indirect expenses

59.

Your gross pay is $525.50. Your net pay is $446.75. How much money was deducted from your pay check?

a)

$ 972.25

b)

$ 70.00

c)

$ 78.75

60.

The purpose of the Appropriation account is to

a)

show how net profit is distributed in a partnership or a cooperative

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

POA Mock Examinations - Paper 1

Total questions: 60

Worksheet time: 1hrs 2mins

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