NEW
Font size
WorksheetsQuiz 1 FA1
Total questions: 50
Worksheet time: 2hrs 50mins
Kew has an overdraft of $ 4,400 at 1 June 2015. The following four transactions occurred during June. Kew allows its customers up to 60 days to pay their invoices.
The following 4 transactions is occurred:
3 June, Kew sold goods worth $ 10,000 on credit to a customer who always takes the full credit period.
10 June, Kew paid a supplier $ 8,000.
20 June, Kew made a cash sale of goods with a list price of $ 12,000 less 5% trade
discount.
23 June, Cash was received from a customer who has been in dispute with Kew. The
original invoice was for $ 6,000, but Kew agreed to accept half the invoice value to settle the dispute.
What was Kew’s bank balance at 30 June 2015?
$ 2,000
$ 2,600
$ 10,800
$ 12,000
Victoria & Co wishes to buy goods from Paddington & Co.
Which of the following is the most likely flow of documents to complete the purchase?
Purchase order, delivery note, goods received note, cheque requisition, invoice.
Purchase order, delivery note, goods received note, invoice, cheque requisition.
Goods received note, purchase order, delivery note, invoice, cheque requisition.
Purchase order, goods received note, delivery note, cheque requisition, invoice.
Which of the following statements best explains the purpose of the journal?
It is a record of all transactions included in the ledger accounts.
It is a record of all cash transactions included in the ledger accounts.
It is a record of all cash transactions included in the ledger accounts.
It is a record of all transactions included in the ledger accounts which have not been captured in other books of prime entry.
Which of the following is not an effective security procedure?
key must be inserted in to the cash register before it will operate. Keys are held by authorised personnel.
Cash is counted by a responsible person who works on the cash register.
The cash reconciliation should be performed by a responsible person who neither operates the cash register nor counts the cash.
Cash should be banked as promptly as possible.
Which document lists the invoices, credit notes and amounts paid by a business and is issued by a supplier to customers, usually on a monthly basis?
Delivery note.
Purchase order.
Quotation.
Statement.
Pimlico & Co owes Vauxhall for goods it recently purchased. Pimlico & Co are settling the
invoice early and will pay the discounted amount.
What is the correct double entry for this in Pimlico & Co’s books?
Debit Vauxhall, Credit Bank, Credit Discount received.
Debit Vauxhall, Debit Discount received, Credit Bank.
Debit Bank, Credit Revenue, Credit Pimlico & Co.
Debit Bank, Debit Revenue, Credit Pimlico & Co.
The opening balance at 1 June 2018 on Northolt’s receivables ledger showed total amounts
owed as $ 6,478. During June Northolt made sales of $ 53,998, half of these sales were for
cash. At 30 June 2018 Northolt's customers owed $ 10,492.
How much cash did Northolt receive from its customers during June 2018?
$58,012
$49,984
$31,013
$22,985
Sarah calculated that her cash book balance was a debit balance of $ 230 at 31 December 2014, but her bank statement balance at that date was a different amount. Items that may
affect the bank statement balance at that date were as follows:
i. A cheque that Sarah paid into the bank for $ 250 was still outstanding.
ii. A cheque for $ 85 paid by Sarah to Molly had not yet been presented at the bank.
iii. Sarah had forgotten to record a cash withdrawal of $ 70
iv. Sarah bank statement included bank charges of $ 25 which had been deducted from her account.
What was the balance on Sarah’s bank statement at 31 December 2014?
$ 325
$ 65
$ 10
$ 30
What legislation prevents the unnecessary retention of personal information?
Contract law.
Data protection law.
Document retention law.
Sale of goods legislation.
Which of the following is revenue expenditure in a business which has a large fleet of motor vehicles?
i. Purchase of a new delivery van.
ii. Redecorating the transport manager's office.
iii. Paying the road fund licenses for the fleet of vehicles.
iv. Purchase for a new exhaust for a van.
All four expenses.
(ii), (iii) and (iv)
(i) and (ii)
(iii) only.
What is the purpose of a remittance advice?
To pay a supplier.
To remind a customer to pay.
To match a customer's payment with the invoices paid.
To send goods back to a supplier.
Which of the following will a bank refuse to accept?
An unsigned cheque.
A crossed cheque made out to the person presenting it.
An account payee cheque paid in by the named person.
A large deposit of notes and coins.
What are the accounting entries to record the transfer of surplus petty cash no longer required into the bank account of a business?
Dr Bank, Cr Petty cash
Dr Bank, Cr Sales
Dr Sales, Cr Bank
Dr Petty cash, Cr Bank
Which method of payment would be used to make an immediate internet purchase?
Cash.
Cheque.
Credit card.
Credit transfer.
Which of the following is capital expenditure?
A debt owed to a supplier.
A bank loan.
The purchase cost of a new machine.
Employee salary costs.
The following information has been extracted from a trader’s wages records for April.
i. Employees’ pension contributions $ 783
ii. Gross basic wages $ 10,163
iii. Income tax $ 2,150
iv. Employer’s pension contributions $ 1,011
What will be the total charge for wages in the final accounts?
$ 10,946
$ 11,174
$ 13,096
$ 13,324
Which of the following categories of account would you expect to have a debit balance when you extract a trial balance from the nominal ledger?
i. Asset accounts.
ii. Liability accounts.
iii. Income accounts.
iv. Expense accounts.
(i) and (iii)
(i) and (iv)
(ii) and (iii)
(ii) and (iv)
The balance on an accounts payable control account at 1 April 2015 was $ 18,420. During
the month the business made purchases on credit of $ 27,400. Unpaid payables at 30 April
2015 were $ 9,250. During April 2015 credit notes amounting to $ 2,610 were received from
suppliers.
What payments were made to accounts payables during April 2015?
$15,260
$20,810
$33,960
$39,180
The entries in an accounts receivable control account were as follows:
Balance brought forward $ 3,500
Sales $ 250,000
Bank $ 225,000
Returns inwards $ 2,500
Irrecoverable debts $ 3,000
What was the closing balance on the accounts receivable control account?
$ 23,000
$ 25,500
$ 26,000
$ 28,000
Which of the following are used in determining irrecoverable debts?
An aged payables analysis.
An aged receivables analysis.
A bank statement.
A supplier statement.
A business that is registered for sales tax purchases goods from a supplier. How would the purchase be recorded in the general ledger?
Debit Purchases, Credit Accounts payables, Credit sales tax.
Debit Purchases, Credit Accounts payables, Debit sales tax.
Credit Purchases, Debit Accounts payables, Credit sales tax.
Credit Purchases, Debit Accounts payables, Debit sales tax.
Which of the following is correct in relation to the trade receivables control account?
i. The gross value of goods returned by credit customers is debited to the trade receivables control account.
ii. Trade discounts to credit customers are excluded from the trade receivables control account.
iii. Contras between the trade receivables’ and trade payables’ control accounts are debited to the trade receivables control account.
(i) and (ii) only
(i) only.
(ii) only.
(ii) and (iii) only
A supplier of computer equipment allows its customers to deduct 3% from the invoice
amount if they pay within 14 days of the invoice date.
What is this an example of?
An irrecoverable debt.
A trade discount.
A cash transaction.
An early settlement discount.
Michael is a salesperson who is paid according to the number of sales he makes. His salary
is a percentage of the gross sales.
By what method of remuneration is Michael paid?
Bonus.
Commission.
Overtime.
Salary.
A summary of the transactions of Witney & Co, which is registered for sales tax at 17.5%,
showed the following for the month of November 2014:
Outputs of $ 122,610 (inclusive of sales tax) and Inputs of $ 78,857 (exclusive of sales tax) At 1 November 2014, Witney owed sales tax of $ 7,200 and during November paid $ 6,800.
What is the balance of sales tax owing at 30 November 2014?
$ 4,461
$ 4,861
$ 9,000
$ 9,400
Sally started in business as a sole trader, selling flowers. She introduced $ 2,200 of her savings into the business and her car, which is worth $ 750.
What journal entry is required to record this?
Debit Motor vehicles, Debit Bank, Credit Capital.
Debit Motor vehicles, Credit Capital, Credit Bank.
Debit Bank, Credit Motor Vehicles, Credit capital.
Debit Capital, Credit Motor vehicles, Credit Bank.
Which of the following documents would you NOT expect to come across in dealing with sales to customers?
Purchase order.
Delivery note.
Goods received note.
Statement.
Which of the following should be classified as assets in a business that sells scaffolding equipment?
Bank overdraft.
Accounts receivable.
Accounts payable.
Bank loan.
Christina withdraws $ 300 from her business bank account for petty cash. How should this be recorded in the general ledger?
Debit Bank, Credit Petty cash
Debit Petty Cash, credit Bank
Debit Petty Cash, credit Capital
No record is necessary
Sock, a business registered for sales tax, purchased goods from a supplier for $ 6,000 plus
sales tax of $ 1,050. Some of the goods were found to be faulty, and Sock returned onethird
of the goods to the supplier. The supplier subsequently issued a credit note for the
goods returned.
How should the credit note be recorded by Sock?
Debit Supplier account $ 2,000, Dr sales tax $ 350, Cr Purchases returns $ 2,350
Debit Supplier account $ 2,350, Cr Purchases returns $ 2,000, Cr Sales tax $ 350
Debit Purchases returns $ 2,000, Dr Sales tax $ 350, Credit Supplier account $ 2,350
Debit Purchases $ 2,350, Credit Supplier account $ 2,350
Which of the following errors would NOT be made using computerised accounts?
Error of commission.
Error of principle.
Omitting an entire transaction.
Only completing one half of the double entry.
What is an accounts receivable ledger?
An account for recording total sales.
An account for recording the total of transactions with credit customers.
A set of accounts for recording the transactions with individual credit customers.
A set of accounts for recording the cash and credit transactions with individual customers.
What is the double entry required to post the sales day book totals to the nominal ledger?
Debit Cash, Credit Sales
Debit Accounts receivable, Credit Sales
Debit Cash, Credit Sales
Debit Accounts receivable, Credit Cash
The following totals appear on a page of the purchases day book.
Suppliers = $ 4,865
Sales tax = $ 792
Total = $ 5,657
What entry should be posted to the purchases account from the day book?
Debit Purchases $ 4,865
Debit Purchases $ 5,657
Credit Purchases $ 4,865
Credit Purchases $ 5,657
For what reason does a business try to ensure a division of duties in the accounts department?
To reduce the risk of fraud.
To prevent individuals from being overworked.
To make supervision easier.
To improve the cover for absentees.
Nigel has discovered a mistake in recording a sales return transaction from the sales returns
day book to the nominal ledger. He had debited the accounts receivables account and credited the sales returns account.
Which book of prime entry should be used to record the correction of the error?
Sales returns day book.
Journal.
Cash book.
Sales day book.
Which of the following is a secure form of paying salaries in a large organisation?
BACS.
Cash.
Standing order.
Direct debit.
Terry has bought a car on credit for his business. Which components of the accounting
equation will change as a result of this transaction?
Assets and capital.
Capital and liabilities.
Assets and liabilities.
Assets, capital and liabilities.
What is the impact upon the net assets of a business when an expense is incurred but not yet paid?
The net assets of the business remain unchanged.
The net assets of the business will be reduced.
The net assets of the business will be increased.
It is not possible to determine the impact upon net assets without further information.
Fork Co offers its credit customers a settlement discount of 5% for payment within 10 days
of the invoice date. Fork Co is preparing an invoice for a credit customer who purchased
goods with a list price of $1,000. This customer is also eligible for 10% trade discount. It is
highly probable that the customer will take advantage of the early settlement terms and
pay within 10 days.
What will be the total due on the invoice sent to the customer?
$ 1,000
$ 900
$ 855
$ 950
After carrying out a bank reconciliation, which one of the following items could require an entry in the cash book?
i. Credit transfers shown in the bank statement.
ii. Dishonoured cheque.
Item (i) only
Item (ii) only
Items (i) and (ii)
Neither (i) nor (ii)
Which one of the following statements is true?
Cash purchases are credited to the purchases account.
Cash sales are debited to the sales revenue account.
Settlement discounts received are debited to the trade payables control account.
Settlement discounts received re credited to the trade payables control account.
In reconciling a business cash book with the bank statement, which of the following items could require a subsequent entry in the cash book?
Errors:
1. Cheques presented after the date of the bank statement.
2. A cheque from a customer that has been dishonoured.
3. An error by the bank.
4. Bank charges.
5. Deposits credited after the date of the bank statement.
6. Standing order payment entered in the bank statement.
Items 2, 3, 4 and 6 only.
Items 1, 2, 5 and 6 only.
Items 2, 4 and 6 only.
Items 1, 3 and 5 only.
Knife Co offers its credit customers a settlement discount of 10% for payment within 10
days of the invoice date. Knife Co is preparing an invoice for a credit customer who has
purchased goods for $ 2,000. This customer is also eligible for 5% trade discount. It is highly
probable that the customer will not take advantage of the early settlement terms and pay
after 30 days in accordance with normal credit terms.
What will be the total due on the invoice sent to the customer?
$ 2,000
$ 1,800
$ 1,900
$ 1,710
When carrying out a reconciliation of the accounts receivables control account balance with
the total of balances on the accounts in the receivables ledger, Frances identified the
following two errors.
i. In the sales day book for one day, the total was overcast by $ 560. (The total was added up incorrectly, and was too high by $ 560.)
ii. A total of $ 830 of receipts in the cash book had been entered in the receivables’ ledger control account as $ 380.
By how much did the balance on the accounts receivable control account differ from the
total of the individual receivables ledger account balances?
A. The accounts receivable control account balance was higher than the total of the ledger account balances by $ 110
A. The accounts receivable control account balance was higher than the total of the ledger account balances by $ 1,010
A. The accounts receivable control account balance was lower than the total of the ledger account balances by $ 110
A. The accounts receivable control account balance was lower than the total of the ledger account balances by $ 1,010
Dan is a trainee accountant. He has made the following attempt at a bank reconciliation statement.
Overdraft in the bank statement = $ 43,700
Add: deposits not credited by the bank = $ 52,900
Less: outstanding cheques to suppliers = ($ 7,800)
Overdraft in the cash book = $ 88,800
What is the correct balance on the cash book?
$ 88,800 overdraft, as stated.
$ 17,000 overdraft.
$ 1,400 overdraft.
$ 1,400 cash in bank.
Which pair of the following account balances would you expect to appear on the same
side of a trial balance?
Purchases and petty cash.
Office equipment and accounts payable.
Accounts receivables and sales.
Telephone expenses and accounts payable.
William operates an imprest system for petty cash, and the float in petty cash is topped up
to $ 250 at the end of each month.
During April, $ 25 was paid into petty cash by employees paying for private use of the office photocopier and a cheque for $ 20 was cashed for an employee out of petty cash. During April, cheques for $ 340 were drawn by William for petty cash.
How much cash was paid out for petty cash expenses during April?
$ 295
$ 345
$ 355
$ 385
A business has an accounts receivable control account and an accounts payable control
account in its general ledger. A trial balance has been extracted, but the debit and credit
totals are not equal.
Which ONE of the following errors might be the cause of this failure to balance?
The purchase of a new computer has been debited to the computer repairs and maintenance account.
A cheque from Crow, who is also a supplier to the business, has been credited to the accounts payable ledger account of Crow.
Sales returned by Jackdaw have been debited to the accounts receivable ledger account of Jackdaw.
The cost of purchasing new telephone equipment has been credited to the telephone expenses account.
A business has an opening balance on the sales tax account showing a receivable of $ 590
and a closing balance also showing a receivable of $ 460. During the period there were
standard rated outputs of $ 4,200 and standard rated inputs of $ 6,000 both exclusive of
sales tax. The standard rate of sales tax is 17.5%.
How much was the sales tax repayment received during the period?
$ 185
$ 445
$ 1,365
$ 1,930
