The following extracts are from the statements of financial position of Charlton co. $

Property plant and equipment - 56,000

Inventory - 29,000

Trade receivable - 14,000

Cash and cash equivalents - 7,000

Long term borrowings - 20,000

Trade payable - 10,000

Taxation payable - 2,000

What is the current ratio of chartlon co (rounded to two decimal places)?

What is accounting concepts means that the financial statements must reflects the underlying commercial reality of a transaction ?

Which TWO of the following should be included in a statement of profit or loss?

1. Bank overdraft

2. Capital introduced

3. Rent received for the year

4. Trade receivable

5. Employees salaries for the year

6. Drawings taken from the business

. Windham co has incurred the followings costs in relation to its new product the winder

$6,000 in January 20X5 evaluate two potential prototype for the winder

$12,000 in February 20X5 to test the technical feasibility of the two winder prototypes before the selection of final model

$25,000 in April 20X5 for the producing the first batch of winder for resale

$2,000 in April 20X5 for registering the patent for winder

What amount should be expensed as research costs?

Gorden has enterd goods sold toR Brown in the account of R BROWNE.

What type of error has Gorden made?

What impact do the followings have on profit in the statement of profit or loss?

1. Recovery of debt previously written off

2. Decrease in allowances for receivables

Roger is preparing his financial statements for the year ended 31^st October 20X8 Roger has included within his expenses office rental of $36,000 paid on 1 February 20X8 for the year followings 20 months?

What is reflects of this error on Roger’s net profit ?

The debit and credit columns of XYZ ‘s trial balance did not agree A debit balance of $25,950 was entered in a suspense account and the following error were subsequently identified

(1) A cheque received for $1900 had been correctly posted to the cash account and posted to the receivables ledger as $9,100

(2) Rent paid of $6,500 had been posted correctly to the cash account posted to the rent expenses account as $650

(3) No entries had been made to reflect a cash sale of $1000

What is the remaining debit balance on the suspense account after making adjustments for the above error ?

Lan record his transactions in his daybooks.

Which TWO of the followings transactions should be recorded in the journal?

(a) An increase in the allowance for receivable

(b) The depreciation charge for the year

(c) A large purchase of goods for resale credit

(d) Goods sold that have been rejected and returned by credit customers

At the beginning of the day, David’s ledger account for cash at bank shows a debit balance of $500. During the day the following transactions occur.

(1) Amanda paid him $400 by direct bank transfer for goods received

(2) He invoiced Jamie $350 for goods delivered that day

(3) He paid for an invoice which totalled $ 600, before taking advantage of an early settlement discount of 4%

What should be the balance on David’s cash at bank account at the end of the day?

Yakuci sells all goods on credit and is currently preparing its financial statements for the year ended 31 December 20X6 .from the records that have been kept, the following information is available.

(1) Trade receivable at the start of the year were $102,400

(2) Trade receivable at the end of the were $133,900

(3) Discount allowed to credit customers were $3,400 for the (not expected to be taken when invoice was first issued)

(4) Cash received from credit customers was $124,600 for the year

(5) The profit mark –up on goods sold was 25% throughout the year

What was the gross profit for the year?

Which of the following describes a retained earning reserve?

W Co purchased some plant and machinery on 1january 20X1 at a cost of $ 24,000 the plant

had an estimated useful life of eight years and a nil residual value.

At 31 December 20X1 what are the balances on the ledger accounts for plant cost accumulated depreciation accounts?

According to the definition of an asset in the IASB’s Conceptual Framework for Financial

Reporting, which TWO of the following transactions would results in an asset being

recognised in Joe’s accounts?

(1) Joe has ordered some items of inventory which will not be delivered until next month

(2) Joe has purchased an item of machinery which has been delivered and he agrees to pay for it

in three months time.

(3) Joe’s father has given him a $5,000 cash contribution to his business with no obligation for

Joe to repay in the future

(4) Joe has promised to pay $50 to Andrew for delivering goods to customers

At 1 April 20X8 Cole Co had $ 300,000 6% loan note in issue on 1 June 20X8 code issued a

$500,000 9% loan note. on 1 January 20X9 Cole repaid the $300,000 6% loan note in full

What figure should appear in the statements of profit or loss finance cost for the year ended 31 march20X9?

One week prior to the end of the financial year, Allden Co was notified that a customer was taking legal action against them, claiming that goods they supplied were the wrong specification .the amount of the claim was $60,000. Allden Co’s lawyers have said that the like hood of the claim succeeding was remote.

What are the disclosure requirements in the year end financial statements relating to this claim in accordance with IAS 37 Provision, Contingent Liabilities and Contingent Assets?

A company disposed of a motor vehicle on 1 January 20X7 which originally cost $ 12,000 when bought on 1 January 20X4 it had been depreciated at 25% on a straight –line basis. The motor vehicle was traded in for a new one costing $ 20,000 with the balance of $ 18,400 being paid by cheque.

What is the loss on disposal of the old motor vehicle?

Ronnie uses the average cost (AVCO) method for inventory valuation.

What amount should be included in cost of sales for october20X6?

The receivable ledger control account of a business showed a closing balance for the year of 420,000 which did not agree with the total of the list of individual ledger balance at the yearend subsequent checks revealed the following:

(1) The sales day book had been overcast by $15,000

(2) A debit balance that been extracted from the sales ledger of $10,000 had been incorrectly recorded in the list of balances as a credit balance

What was the total of the individual receivables ledger balance before the errors were discovered?

In respect of analysis of published financial statement, which of the following statements are True?

1. Investors can make comparisons between different comapanies

2. Management can make operational decisions about different internal departments

3. Employees can make decisions about their job security and future prospects

4. Suppliers can make decisions about offering credit to a company

off an irrecoverable debt Which two of the following transactions would effect both cash and profit equally when initially rerecorded?

1.Receiving interest from bank

2. Purchase of furniture for cash

3. Paying staff salary by cheque

4. Writing

Which two of the following accounting errors would lead to the trail balance not balancing and a suspense account being required ?

1. The stationery account had been understated by Rs.1000

2. A credit purchase for Rs.2,500 had been debited to the purchases account as Rs.5,200 and credited to the accounts payable ledger control account as Rs.5,200

3. An accrued expense had been entered correctly in the expenses account, but shown in the trial balance as a prepayment

4. The purchase of a computer for Rs.5,000, which is for business use, had been incorrectly debited to the purchase account, but correctly recorded in cash

A building was purchased on 1 January 20X1 for Rs.3,00,000 and had a useful life of 40 years. On 1 January 20X5 the building was revalued by a professional surveyor to Rs.4,50,000 and had a remaining useful life of 50 years. Directors decided to incorporate the revalued amount into the financial statements.

What is the depreciation charge for the building for the year ended 31 December 20X5?

Which two of the following material events after the reporting period are adjusting events according to IAS 10 Events after the Reporting Period?

a) A 15% shareholding was acquired in STU for Rs.10m

b) Inventories, which were included in the statement of the financial position at cost of Rs.10,000 were sold for Rs.7,000

c) An accident occurred in the company’s factory, injuring five employees

d) A legal claim, against which a provision of Rs.50,000 had been made, was settled for Rs.40,000

On 1 May 20X1 Bobbin Co had a debit a balance on its cash account of Rs.5,830. During May the following transactions took place : Rs.

Cash Purchases - 5,000

Credit Purchases - 4,200

Cash paid to Credit Suppliers - 8,850

Cash Sales - 8,000

Credit Sales - 12,520

Cash received from Credit Customers -10,810

Cash refund from a Suppliers - 210

Cash refund to a Customer - 305

What was the balance on Bobbin’s cash account as at 31 May 20X1?

A Company’s bank statement showed a credit balance of Rs.900, whilst the cash book showed a credit balance of Rs.100. the difference is caused by unpresented cheques.

How should the bank balance be shown in the company’s statement of financial position?

Which FOUR of the following should be listed as a credit on a trail balance?

a) Receivable allowance

b) Share capital

c) Sales returns

d) Purchase returns

e) Interest received

f) Carriage outwards

g) Receivables

h) Carriage inwards

On 1 January 20X7, Don, a limited company, has the following capital structure :

Rs.’000

Ordinary share capital Rs,2 each 10,000

Share premium 2,000

On 31 December 20X7, the company made a rights issue on a three for five basis at a premium of Rs.1

What is the capital structure at 31 December 20X7 after the right issue?

Gearing looks at the level of debt within an entity.

Which of the following would explain a reduction in gearing?

SPC Co. Purchased a piece of equipment to use within the business. The invoice showed :

Rs.

Net 50,000

Sales tax at 20% 10,000

Gross 60,000

The sales tax is irrecoverable.

SPS Co. also incurred delivery costs of Rs.2,780, installation cost Rs.5,400 and staff training cost Rs.1,800.

What is the total amount to be recognised on the statement of financial position for the piece of equipment ?

Riley follows an average cost method of valuing his closing inventory.

What is the value of Riley’s closing inventory at the end of the week ?

The business made a net profit of Rs.25,000 for the year and the owner introduced Rs.60,000 during the year.

How much did the owner withdraw from the business during the year?

Gamma Co’s receivables control account at 30 June 20X9 is as follows :

What is the balance form receivables in the trial balance at 30 June 20X9?

This is an extract from Kamal’s trial balance for the year end 30 June 20X8 :

Depreciation expense is split equally between cost of sales and distribution expenses.

What should be the cost of sales figure shown in Kamal’s statement of profit or loss for the year ended 30 June 20X8 ?