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WorksheetsPrinciples of Accounts Revision Game #2
Total questions: 40
Worksheet time: 30mins
Which of the following best describes “Accounting”?
Assuming accountability for all aspects of the firm’s management.
Co-ordinating and interpreting financial data for use in management decision-making
Keeping an accurate account of the firm’s business dealings with debtors and creditors
Keeping accounts up-dated to ensure the firm makes maximum profits
Which of the following statements describe the purpose of accounting?
I. Keeping proper records of business transactions
II. Keeping proper control of the finances of the business
III. Assisting management in making decisions
IV. Using the accounting transactions to make proper decisions
I and II only
II and IV only
I. II and III only
I, III and IV only
Which of the following are functions of the bookkeeper?
I. Analyzing
II. Interpreting
III. Posting
IV. Recording
II and III only
III and IV only
I, II and III only
I, II and IV only
Which of the following expresses the balance sheet equation?
Liabilities = Assets – Capital
Liabilities = Assets + Capital
Assets = Liabilities – Capital
Capital = Assets + Liabilities
The principle of double entry book-keeping states that:
Every debit entry has a corresponding debit entry
Every debit entry has a corresponding credit entry
Every credit entry has a corresponding credit entry
Every debit entry has a corresponding creditor entry
The accounting cycle entails the following procedures: Which of the following is the correct sequence in which the procedures should be followed.
I. Posting to the ledger
II. Making adjusting and closing entries
III. Journalizing
IV. Preparation of final account
V. Extracting a trial balance
III, I, II, V, IV
III, I, V, II, IV
I, III, V, II, IV
III, I, V, IV, II
Another name for the owner’s equity or net worth of a business is the:
Income
Assets
Capital
Liabilities
If assets amount to $5 950, Creditors $900 and bank overdraft $800, then capital is:
$6 050
$5 850
$7 650
$4 250
A firm’s balance sheet shows the following figures; use these to answer the next two questions
Fixed Assets $6 000
Current Assets $4 000
Creditors $4 500
Debtors $2 000
Bank overdraft $800
Owner’s equity is equal to:
$6 700
$8 300
$17 300
$11 500
A firm’s balance sheet shows the following figures
Fixed Assets $6 000
Current Assets $4 000
Creditors $4 500
Debtors $2 000
Bank overdraft $800
If the proprietor introduced $800 more cash into the firm, the effect of this transaction would be to:
increase cash; increase bank
increase cash; increase capital
increase cash; decrease bank
increase capital; decrease cash
What is the minimum number of entries usually affected by a business transaction?
One
Three
Two
Four
Which of the following best describes a debtor? Someone:
To whom the business owes money
Who has bought goods for cash
To whom the business has given a discount
Who owes money to the business
Which of the following best describes a creditor? Someone who:
Is owed a sum of money by the business
Has given a discount to the business
Owes money to the business
Has bought goods on credit
Which of the following is NOT a fixed asset?
Equipment
Bank
Land
Machinery
Which of the following are current assets?
I. Bank
II. Cash
III. Prepaid expenses
IV. Prepaid revenues
I, II and IV only
II, III and IV only
I, II and III only
III and IV
The XYZ Company received a cheque from C Blake. How must this transaction be recorded in XYZ’s book?
I. Credit the cash account
II. Credit C. Blake’s Account
III. Debit XYZ’s Bank Account
IV. Debit the cash account
II and IV only
I and IV only
I and III only
II and III only
Which of the following best describes the meaning of ‘Purchases’?
Goods bought for resale
Goods paid for
Items bought
Goods bought on credit
A proprietor withdraws cash from his business for his own use. The entries are:
A. Dr. Cash a/c Cr Bank a/c
C. Dr. Drawings a/c Cr. Cash a/c
D. Dr. Bank a/c Cr Cash a/c
B. Dr. Cash a/c Cr. Drawings
Which of the following should not be called ‘sales’?
Goods sold for cash
Office fixtures sold
Goods sold for credit
Sale of items previously included in 'Purchases'
Cash received as commission is recorded as
D. Dr. Cash a/c ; Cr. Commission
Dr. Commission a/c ; Cr. Profit & Loss a/c
Dr. Profit & Loss a/c ; Cr. Commission a/c
Dr. Commission a/c ; Cr. Cash a/c
Which of the following items are examples of current liabilities?
I Mortgages
II Accounts Payables
III Accrued wages
I, II and III
I and II only
I and III only
II and lII only
When the debit and credit sides of the trial balance agree, this means that
The addition of the trial balance is correct
All transactions have been posted
The debit and credit balance of each account is correct
All transaction have been recorded with equal debits and credits
Which of the following entries should be used to post Sales Returns?
Debit Sales Returns Account; Credit the account of the person returning the goods
Debit Sales Returns Account; Credit Sales Account
Dr. Sales Return Account; Credit Sales Returns Account
Debit the account of the person returning the goods; Credit the Sales Returns Account
In drawing up a trial balance, which of following items will NOT appear on the debit side?
debtors
capital
drawings
vehicle expenses
In preparing its final accounts, a business omitted to include Returns Inwards. Which of the following items will be affected by this omission?
I. Net Sales
II. Net Purchases
III. Gross Profit/Loss
I, II and III
II and III only
I and III only
I and II only
In the Trading Account, return outward is deducted from
Purchases
Carriage inwards
Sales
Carriage outwards
A net loss is the result when
Purchases are more than sales
Gross profit is less than expense
Sales are more than purchases
Expenses are less than the gross
Which of the following sets of accounts will contain debit entries in the trial balances?
Discounts received, stock, purchases returns, salaries
Wages due, rent, purchases returns, discount allowed
Salaries due, discount received, sales returns, stock
Sales returns, wages paid, machinery, discount allowed
The account which discloses the net profit/loss is called the
Profit and Loss Account
Appropriation Account
Trading Account
Cash Account
Sales is normally transferred to the
Manufacturing Account
Appropriation Account
Trading Account
Profit and Loss Account
Which of the following are ALL components of the Income Statement?
Non-current liabilities, Capital, Expense
Net sales, Cost of sales, Net profit
Net current assets, Gross profit, Cost of Sales
Gross profit, Current assets, Current liabilities
The balances listed below appear in a trader’s trial balance. The item that is to be included in the Profit and Loss Account is
Drawings $20
Carriage Outwards $50
Duty paid on Purchases $15
Returns Outwards $60
If a proprietor brings in more money into his business by way of a cheque, which of the following indicates the correct effect on the accounts?
+ Capital; + Bank
– Capital; - Bank
+ Capital; - Bank
– Capital; + Bank
Using the information below, what will be the cost of goods sold?
Carriage inwards $125
Sales $5 500
Returns inwards $365
Purchases $4 520
Closing stock $900
$3 620
$3 745
$4 645
$4 985
Which of the following group of persons monitors a company’s financial statements to discover a desirable rate of return on capital?
Suppliers
Customers
Employees
Investors
Which of the following terms describes a report which indicates whether the business has made a profit or loss?
Ledger
Trial Balance
Income Statement
Balance Sheet
What is the inventory at the end of January?
Inventory at January 1, 1999 $1 500
Purchases during the month $1 200
Cost of goods sold $1 400
$1 300
$ 300
$ 700
$ 500
In the Trading Account, Carriage inwards is added to
Sales
Gross Profit
Opening Stock
Purchases
Mr. Henry’s books disclosed the following details:
Opening Stock: $760
Purchases: $3 890
Returns on purchases: $750
Closing stock: $870
What is the cost of goods sold
$4 530
$3 030
$6 270
$4 750
Given the following, what is the amount of capital? Assets: Premises $20 000; Stock $8 500; Cash $100. Liabilities: Creditors $3 000; Loan from A. Adams $4 000.
A. $21 100
C. $32 400
D. $21 400
B. $21 600
