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WorksheetsPRE-UPS 2(TOPIC 3,5,6 AND 7)
Total questions: 50
Worksheet time: 34mins
A staff who wishes to obtain authorization for payment will present
Invoice
cheque
Payment voucher
receipt
Which of these is NOT a use of source documents?
They act as proof to show that the transaction recorded in the books of accounts occurred.
They help in the preparation of the financial statements.
They provide better internal control and reporting.
The help in determining loyal customers
A document sent from a seller to a buyer when the buyer has been undercharged is called
debit note
deduction note
access note
credit note
Issued by the buyer to the seller that contains information about the goods to be purchased.
Delivery Notes
Payment Voucher
Credit Notes
Purchase Order
A form issued by the bank for any transaction of deposits or withdrawals of money from customers.
Bank Statement
Bank Slip
Cheque Stubs
Payment Voucher
This document is issued by the seller when goods have been returned by the purchaser due to thier being damaged, faulty or supplied to the wrong sprecification, or when an overcharge has been made in an invoice.
Debit Note
Credit Note
Invoice
Receipt
A ledger that is summarized in a single general ledger account.
Controlling Ledger
Subsidiary Ledger
Accounts Payable
Sub account
Gross profit will result if :
operating expenses are less than net income
net sales are greater than operating expenses
net sales are greater than cost of goods sold
operating expenses are greater than cost of goods sold
A list of assets, liabilities and an owner’s equity of a business entity as of a specific date is known as
a statement of profit or loss
a statement of financial position
a statement of comprehensive income
trial balance
The following items are recorded in the general journal except :
purchase of non-current assets on credit
purchase of goods on credit from supplier
withdrawal of goods by the owner for personal used
opening entries, adjusting entries and closing entries
Prepaid expenses are
paid and recorded in an asset account before they are used or consumed.
paid and recorded in an asset account after they are used or consumed.
incurred but not yet paid or recorded.
incurred and already paid or recorded.
Unearned revenues are
revenues for services already performed, and recorded as liabilities, before they are received.
revenues for services performed but not yet received in cash or recorded.
Revenues for services already performed and received in cash, and recorded as revenues when received.
revenues not recorded as revenues until services are performed.
Depreciation expense for a period is the
original cost of an asset – accumulated depreciation.
book value of the asset ÷ useful life.
portion of an asset’s cost that expired during the period.
market value of the asset ÷ useful life
Unearned revenue is classified as
an asset account.
a contra-revenue account.
a liability account.
a revenue account.
Entries that are made at the end of a period to correct accounts before financial statements are prepared.
Closing entries
Adjusting entries
Reversing entries
Journal entries
Accrued expenses are
Expenses from an earlier accounting period that remain unpaid in the current period
Always recorded in cash basis accounting
Generally not due to be paid until a future period
Another name for account receivable
Accrued revenue are
Credited to account receivable
Earned in this period but not yet received
Always recorded in cash basis accounting
Another name for Account Payable
Which one of the following is not characteristic of capital expenditure
Any expenditure incurred to acquire
an asset and make it ready for its
intended use
Improve the efficiency or substantial
working life of the asset
The benefit of which is received over
a period of more than one year.
Decrease the business profit
What type of accounts are Accumulated Depreciation and Allowance for Doubtful Accounts?
Liability
Owner's Equity
Contra Asset
Asset
Entries that are made at the end of a period to correct accounts before financial statements are prepared.
Closing entries
Adjusting entries
Reversing entries
Journal entries
Bank reconciliation statement compares a bank statement with _________
Cash Payment Journal
Cash Receipt Journal
Financial Statements
Cashbook
What is “Deposit in transit” in bank reconciliation?
Added to Bank Balance
Subtracted from Bank Balance
Subtracted from the Cash Book Balance
Added to Cash Book Balance
‘NSF’ marked in cheque sent back by the bank indicates
Cheque has been forged
A bank couldn’t verify the identity
No sufficient money
A cheque cannot be cashed because it’s illegal
Bank service charge:
Add to Book Balance
Deduct from Book Balance
Add to Bank Balance
Deduct from Bank Balance
A company wrote a cheque for RM76 and it cleared the bank for RM76. However, the company recorded the cheque in its Cash account as RM67. How is the difference of RM9 handled on the bank reconciliation?
Add to Book Balance
Deduct from Book Balance
Add to Bank Balance
Deduct from Bank Balance
A company had a receipt of RM989 and correctly prepared its bank deposit slip for RM989. However, the company recorded the receipt in its Cash account as RM998. How is the difference of RM9 handled on the bank reconciliation?
Add to Book Balance
Deduct from Book Balance
Add to Bank Balance
Deduct from Bank Balance
What type of cheques is that which is issued by a firm but not deposited to the bank
Uncredited cheques
Outstanding cheques
Uncollected cheques
Bounced cheques
A bank statement
allows a depositor know the financial position of the bank as of a certain date.
is a credit reference letter written by the depositor's bank.
is a bill from the bank for services rendered.
shows the activity which increased or decreased the depositor's account balance.
A company had a receipt of RM474 and correctly prepared its bank deposit slip for RM474. However, the company recorded the receipt in its cash account as RM747. How is the difference handled on the bank reconciliation?
Deducted from balance of cash book
Added to balance of bank statement
Deducted from balance of bank statement
Added to balance of cash book
No reconciliation needed
The bank charged a company RM20 for cheque book service. Which reconciliation should be done?
Deducted from balance of cash book
Added to balance of bank statement
Deducted from balance of bank statement
Added to balance of cash book
No reconciliation needed
How to reconcile when an accountant of a company debited the amount of RM100 in cash book account, whereas in bank statement, the amount stated at the debit side too? (assumption; all information in bank is correct)
Deducting RM100 from bank statement balance
Deducting RM100 from cash book balance
Deducting RM200 from bank statement balance
Deducting RM200 from cash book balance
No reconciliation needed
In cash book, the favourable balance indicates
Credit Balance
Debit Balance
Bank Overdraft
Adjusted Balance
A bank statement
allows a depositor know the financial position of the bank as of a certain date.
is a credit reference letter written by the depositor's bank.
is a bill from the bank for services rendered.
shows the activity which increased or decreased the depositor's account balance.
On the bank statement, cash deposited by the company is known as
Credit
Debit
Liability
Expense
Bad Debt Expense will be reported in Statement of Profit or Loss under which category?
Cost of Goods Sold
Net Sales
Other Expenses
Operational Expenses
On which Financial Statement would you expect to find Allowance for Doubtful Accounts?
Statement of Financial Position
Statement of Comprehensive Income
Statement of Owner's Equity
Statement of Profit or Loss
% of provision X net credit sales = ?
beginning balance of Bad Debt Expense
beginning balance of Allowance for Doubtful Accounts
Bad Debt Expense
ending balance of Allowance for Doubtful Accounts
% of provision X ending balance of Accounts Receivable = ?
beginning balance of Bad Debt Expense
beginning balance of Allowance for Doubtful Accounts
Bad Debt Expense
ending balance of Allowance for Doubtful Accounts
Under allowance method, the journal entry to write off an uncollectible account is:
Allowance for Doubtful Accounts Dr. & Accounts Receivable Cr.
Accounts receivable Dr. & Allowance for Doubtful Accounts Cr.
Bad Debts Expense Dr. & Accounts Receivable Cr.
Accounts Receivable Dr. & Bad Debts Expense Cr.
Under the allowance method, writing off an uncollectible account
affects only Statement of Financial Position accounts.
affects both Statement of Financial Position and income statement accounts.
affects only income statement accounts.
is not acceptable practice.
What effect does bad debts have on Accounts Receivable?
it increases Accounts Receivable
it decreases Accounts Receivable
it has no effect on Accounts Receivable
nothing happen to Accounts Receivable
Accounts Receivable is a current asset. Under which classification is Allowance for Doubtful Accounts?
A contra account to Accounts Receivable
Operational Expenses
Other Expenses
A contra account to Sales
When an account becomes uncollectible and must be written off,
Bad Debt Expense should be credited.
Allowance for Doubtful Accounts should be credited.
Sales Revenue should be debited.
Accounts Receivable should be credited.
Two bases for estimating uncollectible accounts are:
percentage of current assets and percentage of sales.
percentage of assets and percentage of sales.
percentage of receivables and percentage of sales.
percentage of receivables and percentage of total revenue.
The direct write-off method of accounting for bad debts
uses an allowance account.
uses a contra-asset account.
does not require estimates of bad debt losses.
is the preferred method under generally accepted accounting principles.
Bad debts can be classified as:
a current asset
a current liability
an expense
a revenue
Under allowance method, the correct journal entry to reinstate a previously written off account is:
Allowance for Doubtful Accounts Dr.; Bad Debts Expense Cr.
Accounts Receivable Dr.; Allowance for Doubtful Accounts Cr.
Allowance for Doubtful Accounts Dr.; Accounts Receivable Cr.
Accounts Receivable Dr.; Sales Cr.
To record estimated uncollectible accounts using the allowance method, the adjusting entry would be a
debit to Accounts Receivable and a credit to Allowance for Doubtful Accounts.
debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts.
debit to Allowance for Doubtful Accounts and a credit to Accounts Receivable.
debit to Loss on Credit Sales Revenue and a credit to Accounts Receivable.
The bank charged a company RM20 for check book service. Which reconciliation should be done?
Deducted from balance of cash book
Added to balance of bank statement
Deducted from balance of bank statement
Added to balance of cash book
No reconciliation needed
How to reconcile when an accountant of a company debited the amount of RM100 in cash book account, whereas in bank statement, the amount stated at the debit side too? (assumption; all information in bank is correct)
Deducting RM100 from bank statement balance
Deducting RM100 from cash book balance
Deducting RM200 from bank statement balance
Deducting RM200 from cash book balance
No reconciliation needed
