Which groups of people are most likely to be interested in the financial statements of a sole trader?

1 Shareholders of the company

2 The business’s bank manager

3 The tax authorities

4 Financial analysts

Which of the following statements is/are true?

1 A supplier of goods on credit is interested only in the statement of financial position, ie an indication of the current state of affairs.

2 The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions.

Which of the following are advantages of trading as a limited liability company?

1 Operating as a limited liability company makes raising finance easier because additional shares can be issued to raise additional cash.

2 Operating as a limited liability company is more risky than operating as a sole trader because the shareholders of a business are liable for all the debts of the business whereas the sole trader is only liable for the debts up to the amount he has invested.

Which of the following best describes corporate governance?

Which accounting concept should be considered if the owner of a business takes goods from inventory for his own personal use?

Sales revenue should be recognised when goods and services have been supplied; costs are incurred when goods and services have been received.

Which accounting concept governs the above?

Which accounting concept states that omitting or misstating this information could influence users of the financial statements?

Which of the following accounting concepts means that similar items should receive a similar treatment?

Listed below are some characteristics of financial information.

1 Relevance

2 Consistency

3 Faithful representation

4 Accuracy

Which of these are qualitative characteristics of financial information according to the IASB's Conceptual Framework for Financial Reporting?

A business can make a profit and yet have a reduction in its bank balance. Which ONE of the might cause this to happen?

The net assets of Altese, a trader, at 1 January 20X2 amounted to $128,000. During the year to 31 December 20X2 Altese introduced a further $50,000 of capital and made drawings of $48,000. At 31 December 20X2 Altese's net assets totalled $184,000.

What is Altese's total profit or loss for the year ended 31 December 20X2?

Jones Co has the following transactions:

1. Payment of $400 to J Bloggs for a cash purchase

2. Payment of $250 to J Doe in respect of an invoice for goods purchased last month What are the correct

ledger entries to record these transactions?

Which of the following documents should accompany a return of goods to a supplier?

Which of the following are books of prime entry?

1 Sales day book

2 Cash book

3 Journal

4 Purchase ledger

In which book of prime entry will a business record debit notes in respect of goods which have been sent back to suppliers?

Which of the following would be recorded in the sales day book?

Which one of the following statements about an imprest system of petty cash is correct?

Which one of the following provides evidence that an item of expenditure on petty cash has been approved or authorised?

Smith Co has the following transactions:

1. Purchase of goods on credit from T Rader: $450

2. Return of goods purchased on credit last month to T Rouble: $700 What are the correct ledger entries to record these transactions?

Are the following statements about debit entries true or false?

1 A debit entry in the cash book will increase an overdraft in the accounts.

2 A debit entry in the cash book will increase a bank balance in the accounts.

You are given the following information:

Receivables at 1 January 20X3 $10,000

Receivables at 31 December 20X3 $9,000

Total receipts during 20X3 (including cash sales of $5,000) $85,000

What are sales on credit during 20X3?

A business sells $100 worth of goods to a customer, the customer pays $50 in cash immediately and will pay the remaining $50 in 30 days' time.

What is the double entry to record the purchase in the customer’s accounting records?

Tin Co purchases $250 worth of metal from Steel Co. Tin Co agrees to pay Steel Co in 60 days time.

What is the double entry to record the purchase in Steel Co’s books?

W is registered for sales tax. The managing director has asked four staff in the accounts department why the output tax for the last quarter does not equal 20% of sales (20% is the rate of tax). Which one of the following four replies she received was not correct?

The following information relates to Eva Co's sales tax for the month of March 20X3: $

Sales (including sales tax) 109,250

Purchases (net of sales tax) 64,000

Sales tax is charged at a flat rate of 15%. Eva Co's sales tax account showed an opening credit balance of $4,540 at the beginning of the month and a closing debit balance of $2,720 at the end of the month.

What was the total sales tax paid to regulatory authorities during the month of March 20X3?

Alana is not registered for sales tax purposes. She has recently received an invoice for goods for resale which cost $500 before sales tax, which is levied at 15%. The total value was therefore $575.

What is the correct entry to be made in Alana’s general ledger in respect of the invoice?

Information relating to Lauren Co's transactions for the month of May 20X4 is shown below: $

Sales (including sales tax) 140,000*

Purchases (net of sales tax) 65,000

Sales tax is charged at a flat rate of 20%. Lauren Co's sales tax account had a zero balance at the beginning of the month and at the end of the month.

* Lauren Co's sales for the month of $140,000 included $20,000 of sales exempt from sales tax.

What was the total sales tax paid to regulatory authorities at the end of May 20X4 (to the nearest $)?

Trade receivables and payables in the financial statements of a sales tax registered trader will appear as described by which of the following?

Which of the following correctly describe the entry in the sales account for a sale for a sales tax registered trader?

Sales (including sales tax) amounted to $27,612.50, and purchases (excluding sales tax) amounted to $18,000. What is the balance on the sales tax account, assuming all items are subject to sales tax at 17.5%?