On 1 May 20X9 Marshall's cash book showed a cash balance of $224 and an overdraft of $336. During the week ended 6 May the following transactions took place.

May 1 - Sold $160 of goods to P Dixon on credit.

May 1 - Withdrew $50 of cash from the bank for business use.

May 2 - Purchased goods from A Clarke on credit for $380 less 15% trade discount.

May 2 - Repaid a debt of $120 owing to R Hill, taking advantage of a 10% cash discount. The payment was by cheque.

May 3 - Sold $45 of goods for cash.

May 4 - Sold $80 of goods to M Maguire on credit, offering a 12.5% discount if payment made within 7 days. May 4 - Paid a telephone bill of $210 by cheque.

May 4 - Purchased $400 of goods on credit from D Daley. May 5 - Received a cheque from H Larkin for $180. Larkin has taken advantage of a $20 cash discount offered to him.

May 5 - Sold $304 of goods to M Donald on credit.

May 5 - Purchased $135 of goods from Honour Co by cheque.

May 6 - Received a cheque from D Randle for $482.

May 6 - Purchased $100 of goods on credit from G Perkins.

What is the total of the purchases day book?

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?

Mew Ling has the following transactions:

1. Receipt of cash from R Singh in respect of an invoice for goods sold three weeks ago

2. Receipt of cash from S Kalu for cash sales

What are the ledger entries required to record the above transactions?

How is the total of the sales day book recorded in the nominal ledger?

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.

An accountant has inserted all the relevant figures into the trade payables account, but has not yet balanced off the account.

Assuming there are no other entries to be made, other than to balance off the account, what is the closing balance on the trade payables account?

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?

Opening and closing inventories are both $3,000. What is the gross profit for March 20X8?

William's trial balance at 30 September 20X5 includes the following balances:

Trade receivables $75,943

Receivables allowance $4,751

How should these balances be reported in William's statement of financial position as at 30 September 20X5?

A trial balance is made up of a list of debit balances and credit balances.

Which of the following statements is correct?

At 30 November 20X5 Jenny had a bank loan of $8,500 and a balance of $678 in hand in her bank account.

How should these amounts be recorded on Jenny's opening trial balance at 1 December 20X5?

Which ONE of the following statements does NOT describe a way in which an effective accounting system facilitates the provision of useful accounting information?

What figure should be included in the financial statements for inventories at 30 June 20X3?

Which of the following costs may be included when arriving at the cost of finished goods inventory for inclusion in the financial statements of a manufacturing company?

What should the inventory value be according to IAS 2 Inventories after considering the above items?

In preparing its financial statements for the current year, a company’s closing inventory was understated by $300,000.

What will be the effect of this error if it remains uncorrected?

Which of the following statements about IAS 2 Inventories is correct?

What is the correct inventory valuation for inclusion in the financial statements?

What is the value of inventory at the year end?sells three products – Basic, Super and Luxury. The following information was available at the year end.

Basic Super Luxury

$ per unit $ per unit $ per unit

Original cost 6 9 18

Estimated selling price 9 12 15

Selling and distribution costs 1 4 5

units units units

Units of inventory 200 250 150

What is the value of inventory at the year end?

An inventory record card shows the following details.

February 1 50 units in stock at a cost of $40 per unit

7 100 units purchased at a cost of $45 per unit

14 80 units sold

21 50 units purchased at a cost of $50 per unit

28 60 units sold

What is the value of inventory at 28 February using the FIFO method?

IAS 2 Inventories defines the items that may be included in computing the value of an inventory of finished goods manufactured by a business.

Which one of the following lists consists only of items which may be included in the statement of financial position value of such inventories, according to IAS 2?

The closing inventory of X amounted to $116,400 excluding the following two inventory lines:

1. 400 items which had cost $4 each. All were sold after the reporting period for $3 each, with selling expenses of $200 for the batch.

2. 200 different items which had cost $30 each. These items were found to be defective at the end of the reporting period. Rectification work after the statement of financial position amounted to $1,200, after which they were sold for $35 each, with selling expenses totalling $300.

Which of the following total figures should appear in the statement of financial position of X for inventory?

The inventory value for the financial statements of Q for the year ended 31 December 20X4 was based on an inventory count on 4 January 20X5, which gave a total inventory value of $836,200.

Between 31 December and 4 January 20X5, the following transactions took place:

$

Purchases of goods 8,600

Sales of goods (profit margin 30% on sales) 14,000

Goods returned by Q to supplier 700

What adjusted figure should be included in the financial statements for inventories at 31 December 20X4?

A company has decided to switch from using the FIFO method of inventory valuation to using the average cost method (AVCO).

In the first accounting period where the change is made, opening inventory valued by the FIFO method was $53,200. Closing inventory valued by the AVCO method was $59,800.

Total purchases and during the period were $136,500. Using the continuous AVCO method, opening inventory would have been valued at $56,200.

What is the cost of materials that should be included in the statement of profit or loss for the period?

Which one of the following statements about the use of a continuous inventory system is INCORRECT?

The information below relates to inventory item Z.

March 1 50 units held in opening inventory at a cost of $40 per unit

17 50 units purchased at a cost of $50 per unit

31 60 units sold at a selling price of $100 per unit

Under AVCO, what is the value of inventory held for item Z at the end of March 31?

A firm has the following transactions with its product R.

1 January 20X1 Opening inventory: nil

1 February 20X1 Buys 10 units at $300 per unit

11 February 20X1 Buys 12 units at $250 per unit

1 April 20X1 Sells 8 units at $400 per unit

1 August 20X1 Buys 6 units at $200 per unit

1 December 20X1 Sells 12 units at $400 per unit

The firm uses periodic weighted average cost (AVCO) to value its inventory. What is the inventory value at the end of the year?

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?

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?

A business commenced with capital in cash of $1,000. Inventory costing $800 plus sales tax is purchased on credit, and half is sold for $1,000 plus sales tax, the customer paying in cash The sales tax rate is 20%.

What would the accounting equation after these transactions show?

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%

Discount is a percentage of the cost that is __________ from the total

A firm has the following transactions with its product R.

1 January 20X1 Opening inventory: nil

1 February 20X1 Buys 10 units at $300 per unit 11 February 20X1 Buys 12 units at $250 per unit

1 April 20X1 Sells 8 units at $400 per unit

1 August 20X1 Buys 6 units at $200 per unit

1 December 20X1 Sells 12 units at $400 per unit

The firm uses FIFO to value its inventory. What is the inventory value at the end of the year?

On 30 September 20X1 part of the inventory of a company was completely destroyed by fire.

The following information is available:

– Inventory at 1 September 20X1 at cost $49,800

– Purchases for September 20X1 $88,600

– Sales for September 20X1 $130,000

– Inventory at 30 September 20X1 – undamaged items $32,000 – Standard gross profit percentage on sales 30%

Based on this information, what is the cost of the inventory destroyed?

According to IAS 2 Inventories, which TWO of the following costs should be included in valuing the inventories of a manufacturing company ?

1. Carriage inwards

2. Carriage outward

3. Depreciation of factory plant

4. General administrative overheads

Which 1 of the following statements about sales tax

is/are true?

1.Sales tax is an expense to the ultimate consumer of the goods purchased

2. Sales tax is recorded as income in the accounts of the entity selling the goods

A company values its inventory using the FIFO method. At 1 May 20X5 the company had 700 engines in inventory, valued at $190 each. During the year ended 30 April 20X6 the following transactions took place:

20X5

1 July - Purchased 500 engines at $220 each 1 November Sold 400 engines for $160,000

20X6

1 February - Purchased 300 engines at $230 each 15 April Sold 250 engines for $125,000

What is the value of the company’s closing inventory of engines at 30 April 20X6?

The annual sales of a company are $235,000 including sales tax at 17.5%. Half of the sales are on credit terms, half are cash sales. The receivables in the statement of financial position are $23,500.

What is the output tax?

The closing inventory at cost of a company at 31 January 20X3 amounted to $284,700.

The following items were included at cost in the total:

1. 400 coats, which had cost $80 each and normally sold for $150 each. Owing to a defect in manufacture, they were all sold after the reporting date at 50% of their normal price. Selling expenses amounted to 5% of the proceeds.

2. 800 skirts, which had cost $20 each. These too were found to be defective. Remedial work in February 20X3 cost $5 per skirt, and selling expenses for the batch totalled $800. They were sold for $28 each.

What should the inventory value be according to IAS 2 Inventories after considering the above items?

Which of the following statements about the valuation of inventory are correct, according to IAS 2 Inventories?

1. Inventory items are normally to be valued at the higher of cost and net realisable value.

2. The cost of goods manufactured by an entity will include materials and labour only. Overhead costs cannot be included.

3. LIFO (last in, first out) cannot be used to value inventory.

4. Selling price less estimated profit margin may be used to arrive at cost if this gives a reasonable approximation to actual cost.

A company with an accounting date of 31 October carried out a physical check of inventory on 4 November 20X3, leading to an inventory value at cost at this date of $483,700.

Between 1 November 20X3 and 4 November 20X3 the following transactions took place:

1. Goods costing $38,400 were received from suppliers.

2. Goods that had cost $14,800 were sold for $20,000.

3. A customer returned, in good condition, some goods which had been sold to him in October for $600

and which had cost $400.

4. The company returned goods that had cost $1,800 in October to the supplier, and received a credit note for them.

What figure should appear in the company's financial statements at 31st Oct. 2013 for closing inventory,

based on this information?

Which TWO of the following errors would cause the total of the debit column and the total of the credit column of a trial balance not to agree?

1. A transposition error was made when entering a sales invoice into the sales day book

2. A cheque received from a customer was credited to cash and correctly recognised in receivables

3. A purchase of non-current assets was omitted from the accounting records

4. Rent received was included in the trial balance as a debit balance