WorksheetsFinancial Statements for Sole-proprietorship
Total questions: 25
Worksheet time: 33mins
What is a Sole Proprietorship?
Business owned by president
Business owned by several companies
Business owned by one person
Business owned by a company
Which of the following is a disadvantage to a sole-trader?
Easy to set up
No need to share profits with anyone
Has no one to share responsibility with
Low initial start-up costs
Which of the following are classified as current assets in a business?
(a) Cash at bank
(b) Money owed by customer
(c) Prepaid expense
(d) Accrued expense
(a), (b) and (c)
(a), (c) and (d)
(a), (b) and (d)
(b), (c) and (d)
Which of the following is a non-current asset in the statement of financial position?
Cash at bank
Closing inventory
Trade receivables
Motor Vehicle
What does a sole-trader discover from the contents of their income statement?
Amount spent on non-current assets
Annual drawings
Bank account balance
Profit or loss for the year
Which of the following accurately represents the statement of financial position for a sole-trader?
assets = liabilities - capital
capital = assets + liabilities
capital = assets - liabilities
liabilities = capital - assets
Carly's trial balance for 31 December 2020 includes the following balances:
Sales $3,200
Inventory at 1 January 2020 $200
Purchases $1,800
Expenses $800
Inventory at 31 December 2020 $300
What is her profit for the year?
$400
$500
$700
$1,500
What is shown as a liability in a statement of financial position?
bank overdraft
fixtures and fittings
inventory
prepaid rent
The following information is available for a sole-trader for the year ended 30 September 2020.
Sales $59,200
Inventory at 1 October 2019 $2,500
inventory at 30 September 2020 $3,800
Purchases $28,600
What is the gross profit for the year?
$24,300
$29,300
$30,600
$31,900
Susan receives a cheque from a tenant on 10 December 2019. This is rent due to the business for the period 1 January to 31 March 2020.
How is this treated in Susan's financial statements for the year ended 31 December 2019?
accrued expense
accrued income
prepaid expense
prepaid income
Which one of the following falls under Other Payables in a Statement of Financial Position?
Unpaid rent
Unpaid rent received
Prepaid electricity bill
Accrued discount received
Find the correct answer for part (i).
Arina purchased a motor vehicle costing $23 000 on 1 August 2019. She decided to depreciate the motor vehicle using the straight line method at 20% per annum.
Depreciation on the motor vehicle of $4 600 was charged to the Income statement for the year ended 31 July 2020.
How much was charged to the Income statement for the year ended 31 July 2021 for depreciation on the motor vehicle?
$3 680
$4 600
$8 280
$9 200
Which of the following are expenses? Indicate with a tick ( / ).
Premises
Accrued wages
Decrease in provision for doubtful debts
Depreciation charge
Carriage outwards
Sales are $50 000, expenses are $10 000 and profit for the year is 10% of sales.
What is the gross profit?
$5 000
$15 000
$35 000
$45 000
Prepare the Statement of financial position for the following business.
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Find the correct answer for part (ii).
Find the correct answer for part (iii).
Find the correct answer for part (iv).
Find the correct answer for part (v).
Find the correct answer for part (vi).
Find the correct answer for part (vii).
Irrecoverable debts is an item under which category?
Asset
Liability
Revenue
Expense
Calculate whether there is an increase or a decrease in provision for doubtful debts, provided the following information:
Trade receivables $4 000
Provision for doubtful debts at 1 Jan 2020 $500
Provision for doubtful debts at 31 December 2020 was estimated at 10% of trade receivables
Increase in PFDD of $400
Decrease in PFDD of $400
Increase in PFDD of $100
Decrease in PFDD of $100
Where do we record provision for depreciation of a non-current asset?
Statement of Financial Position
Sales journal
Cash Book
Accruals concept
