2. Which of the followings are potential users of financial statements?

3. Which of the following expenses is included in cost of sales?

4. Ann downloads a report of her bank transactions for the day. The report shows a deposit of £150 which the computerised accounting system has not been able to match to a transaction. Which of the following transactions may have resulted in the cash receipt?

5. The usefulness of information is assessed in terms of its

Which of the following statements about bank reconciliations are correct?

1. All differences between the cash at bank account and the bank statement must be corrected by means of a journal entry.
   
   

2. In preparing a bank reconciliation, cheques received from credit customers before the period end but credited by the bank after the period end should reduce an overdrawn balance in the bank statement.
   
   

3. Bank charges not yet entered in the cash at bank account should be dealt with by an adjustment to the balance per the bank statement.
   
   

If cheque received from a credit customer is dishonoured after date, a credit entry in the cash at bank account is required.

The credit side of a trial balance totals £400 more than the debit side. Which of the following errors would fully account for the difference?

8. Which of the following are source documents that contain information that will be entered into a business’s accounting system?

Which of the following documents would be issued by a supplier if it was discovered it had overcharged its customer by £400?

The ICAEW Code of Ethics only applies to the paid activities of the professional accountant.

A business in its first period of trading charges £4,000 of sales tax on its sales and suffers £3,500 of sales tax on its purchases which include £250 sales tax on business entertaining. What is the amount owed to tax authorities?

A sales tax registered trader has recorded the following transactions during the accounting period.
(1) Standard rated sales 200,000
(2) Purchases 150,000

Included in purchases are the purchases of a motor car for £20,000, a photocopier for £8,000 and entertaining expenses of £5,000. Sales tax is not recoverable on the motor car or entertainment expenses. All figures are given inclusive of sales tax at 17.5%. How much input tax can be reclaimed by the trader?

An error has led to Erica’s trial balance falling to balance. This could have been caused by an error of commission. True or False?

 The balances in the receivables ledgers when added should be equal to the receivable ledger control account.

Commissions paid to sales representative need to be included in cost of purchase.

 When a debt written off as irrecoverable in one accounting period is subsequently paid in a later accounting period, the original entry to write-off should simply be reversed.

 Joe buys goods worth £3,500 from Eddie. On £2,000 worth, he gets trade discount of 20%, no trade discount is available on the rest. However Joe always makes sure that he pays within 10 days in order to obtain Eddie's settlement discount of 5%. How much will Joe pay Eddie?

 The petty cash float in a business has an imprest amount of £200. At the end of March vouchers in the petty cash box totaled £136 and the amount of cash remaining in the box was £54. Which of the following explains the difference?

 When a purchase invoice is received from a supplier which of the following documents would the invoice be checked to?

 Under this principle, some costs are initially recognized as assets and recognized only as expenses when the related revenue is recognized.

 This qualitative characteristic requires at least two items.

 A person claimed damages from your entity due to some faulty goods & legal procedures are going on. If he/she becomes successful, there is a possibility to impose £1000 penalty on your entity. Whether this £1000 will be treated as a liability for your company now.

 For accounting purpose, the proprietor is a separate and distinct entity from the business.

 Materiality is an entity-specific aspect of which qualitative characteristic?

Which of the following is an item of capital expenditure?

 A company's trial balance failed to agree, the totals being: Debit £815,602 / Credit £808,420. Which of the following errors could fully account for the difference?

When doing bank reconciliation, adjustments have to be made for timing differences. Which one of these constitutes a timing difference?

The receivables ledger at 1 May had balances of £32,750 debit and £1,275 credit. During May, sales of £125,000 were made on credit. Receipts from receivables amounted to £122,500 and discounts of £550 were allowed. Refunds of £1,300 were made to customers. The net closing debit balance at 31 May on the receivables control account was:

 On 01 January 2019, you received a bill of £600 for electricity for the Quarter ended 31 December 2018. State the correct journal entry.

Muse plc begins trading on 1 January 20X8 and has zero inventories at that date. During 20X8 it makes purchases of £455,000, incurs carriage inwards of £24,000, and carriage outwards of £29,000. Closing inventories at 31 December 20X8 are valued at £52,000. In the statement of profit or loss for the year ended 31 December 20X8 the cost of sales figure is:

What will be the appropriate accounting treatment to unsold goods held at the year end?

The cash book is the book of original entry for…

Joe buys goods worth £3,500 from Eddie. On £2,000 worth, he gets trade discount of 20%, no trade discount is available on the rest. However Joe always makes sure that he pays within 10 days in order to obtain Eddie’s settlement discount of 5%. How much will Joe pay Eddie?

Bill, a sole trader, set up business on 1 October 20X8 with £30,000 of his own money. During the year to 30 September 20X9 he won £50,000 on the lottery and paid £30,000 of this into his business. He took cash drawings of £5,000 during the year and at 30 September 20X9 the net assets of the business totalled £59,000. What was the profit or loss of the business for the year ended 30 September 20X9?

 A purchase daybook is a record of data extracted from which of the following documents?

Jenny’s payable ledger shows opening balance of £600 on August 01. During the month she purchased goods worth £1200 on credit & £500 on cash. Beside she paid £1000 to suppliers. What will be the amount of the closing balance of her payable ledger?

 The closing inventory of Epsilon amounted to £284,000 at cost on 30 September 20X1, the date of the statement of financial position. This total includes the following two inventory lines.
(1) 500 items which had each cost £15 each and which were included at £7,500. These items were found to have been defective at the date of the statement of financial position. Remedial work after that date cost £1,800 and they were then sold shortly afterwards for £20 each. Selling expenses were £400.
(2) 100 items which had cost £10 each. After the date of the statement of financial position they were sold for £8 each, with selling expenses of £150.
The figure which should appear in Epsilon’s statement of financial position for inventory is:

 At the year end, Jason discovered that he has some unsold goods in his warehouse which was purchased at £1,500 in total & relevant selling price is £1,800. Due to sudden economic recession he felt that he may only recover £1,300 by selling them. What should be the value of this closing inventory?

Property, plant and equipment is treated as ______ in the SFP.

Revenue is recognised as control is passed. Which of the following best describes control with respect to revenue recognition?

 A person claimed damages from your entity due to some faulty goods & legal procedures are going on. If he/she becomes successful, there is a possibility to impose £1000 penalty on your entity. Whether this £1000 will be treated as a liability for your company now.

Purchases from a supplier on credit is a liability.

 A business in its first period of trading charges £4,000 of sales tax on its sales and suffers £3,500 of sales tax on its purchases which include £250 sales tax on business entertaining. What is the amount owed to tax authorities?

 Trial balance is a method used to test the accuracy of the accounting records.

One of the main objectives of preparing financial statements is

 When performing a reconciliation between the bank statement and the cash book, which of the following would require an entry in the cash book?

When an entity returns goods to a supplier it will expect to receive from the supplier...

The cost of employer's NI is part of a company's ...

 The cash book is the book of original entry for...

 A purchase daybook is a record of data extracted from which of the following documents?

Which of the following statements is incorrect about trial balance?

 If a supplier's credit note of £130 has been entered as an invoice in the purchases day book, but has been correctly entered in the supplier's payables ledger account, the totals of the debit column and the credit column on the subsequently extracted trial balance would:

A bank statement shows a balance of £1,200 in credit. An examination of the statement shows a £500 cheque paid in per the cash book but not yet on the bank statement and a £1,250 cheque paid out but not yet on the statement. In addition the cash book shows deposit interest received of £50 but this is not yet on the statement. What is the balance per the cash book?

When doing bank reconciliation, adjustments have to be made for timing differences. Which one of these constitutes a timing difference?

CÂU HỎI 17
Muse plc begins trading on 1 January 20X8 and has zero inventories at that date. During 20X8 it makes purchases of £455,000, incurs carriage inwards of £24,000, and carriage outwards of £29,000. Closing inventories at 31 December 20X8 are valued at £25,000. In the statement of profit or loss for the year ended 31 December 20X8 the cost of sales figure is:

 For Morgan plc the direct production cost of each unit of inventory is £46. Production overheads are £15 per unit. Currently the goods can only be sold if they are modified at a cost of £27 per unit. The selling price of each modified unit is £80 and selling costs are estimated at 10% of selling price. At what value should each unmodified unit of inventory be included in the statement of financial position?

CÂU HỎI 19
At 31 December 20X2 a company's receivables totalled £400,000 and an allowance for receivables of £50,000 had been brought forward from the year ended 31 December 20X1. It was decided to write off debts totalling £38,000 and to adjust the allowance for receivables to £36,200. What charge for irrecoverable debts should appear in the company's statement of profit or loss for the year ended 31 December 20X2?

 At 30 September 20X0 a company has receivables totaling £350,000 and an allowance for receivables of £22,000 brought forward from the previous year. It has been decided to write off receivables totaling £27,500. An allowance of £22,575 is required at 30 September 20X0. The total charge for irrecoverable debts in the company's statement of profit or loss for the year ended 30 September 20X0 will be:

The first step in the process of preparing the financial statements is to open up another ledger account, called the statement of profit or loss.

 Reconciliation between the control account total and the receivables ledger will help to detect errors, thus providing an important control.

Which of the business may have more than one owner?

 Which of the following is correct?

 These are the year end balances for Josie's business. Sales £54,000 Purchases £21,000 Inventory £9,500 Cash £27,250 Receivables ? Motor vehicle £7,500 Payables £5,500 Capital £18,500 If the trial balance balances, what is the missing figure for receivables?

 Which of the following items could appear on the credit side of a receivables control account?

These are the year end balances for Josie's business. Sales £540,000 Purchases £210,000 Inventory £95,000 Cash £272,500 Receivables ? Motor vehicle £75,000 Payables £55,000 Capital £185,000 If the trial balance balances, what is the missing figure for receivables?

Sales returns of £460 have inadvertently been posted to the purchase returns, although the correct entry has been made to the accounts receivable control. A suspense account needs to be set up for how much?

 Platoon plc is preparing its financial statements for the year ended 30 April 20X1, having prepared an initial trial balance. Purchases in the period were £686,880. Inventories were valued at £18,081 on 1 May 20X0, and at £18,647 on 30 April 20X1. In Platoon plc’s statement of profit or loss for the year ended April20X1, the figure for cost of sales will be:

 A person claimed damages from your entity due to some faulty goods & legal procedures are going on. If he/she becomes successful, there is a possibility to impose £1000 penalty on your entity. Whether this £1000 will be treated as a liability for your company now.

The balance of the cash book need not be equal to the balance in the nominal ledger cash account.

 The closing inventory balance is included in the extended trial balance.

In a period of rising prices, the FIFO method of charging inventory issues to production will give a lower gross profit figure than the AVCO method.

 Opening inventory is brought forwarded from previous year’s statement of financial position & remain as current asset in current year.

 If there are relatively small amount of inventory, they should be counted every day.

In double-entry bookkeeping, which of the following statements is correct?

When performing a reconciliation between the bank statement and the cash book, which of the following would require an entry in the cash book?

 Discount received from suppliers that is recorded initially in the cash book is debited to:

Which of the following statements is incorrect about trial balance?

 As at 31 December 20X1 a company's bank statement shows an overdraft of £1,500. The statement includes bank charges of £30 which have not yet been recorded in the company's cash book. On 29 December 20X1 the company had paid a cheque of £500 to a supplier and banked £200 received from a trade receivable; neither of these items appear in the bank statement.

 A company's trial balance failed to agree, the totals being: Debit £815,602 / Credit £808,420. Which of the following errors could fully account for the difference?

A bank statement shows a balance of £1,200 in credit. An examination of the statement shows a £500 cheque paid in per the cash book but not yet on the bank statement and a £1,250 cheque paid out but not yet on the statement. In addition the cash book shows deposit interest received of £50 but this is not yet on the statement. What is the balance per the cash book?

 Jay has been in trading for several years. The materials he uses in his business are subject to regular price rises. He is unsure how to value his inventory and is trying to decide whether to use FIFO or AVCO. Which of the following statements is correct?

 At 30 June 20X4 a company's allowance for receivables was £39,000. At 30 June 20X5 trade receivables totalled £157,000. It was decided to write off debts totalling £37,000 and to adjust the allowance for receivables to £24,000. What figure should appear in the statement of profit or loss for irrecoverable debts expense for the year ended 30 June 20X5?

 A person claimed damages from your entity due to some faulty goods & legal procedures are going on. If he/she becomes successful, there is a possibility to impose £1000 penalty on your entity. Whether this £1000 will be treated as a liability for your company now.

 The Accounting Equation must always be in balance?

 Closing inventory is a debit in the statement of profit or loss.

 When performing a reconciliation between the bank statement and the cash book, which of the following would require an entry in the cash book?

 At the year end, Jason discovered that he has some unsold goods in his warehouse which was purchased at £15,000 in total & relevant selling price is £18,000. Due to sudden economic recession he felt that he may only recover £13,000 by selling them. What should be the value of this closing inventory?

 When an entity returns goods to a supplier it will expect to receive from the supplier...

At 1 July 20X2 the receivables allowance of Q plc was £18,000. During the year ended 30 June 20X3 debts totaling £14,600 were written off. It was decided that the receivables allowance should be £16,000 as at 30 June 20X3. What amount should appear in Q plc's statement of profit or loss for irrecoverable debts expense for the year ended 30 June 20X3?

Arrow plc had a receivables balance of £7,050 at 31 December 20X0. During the year £500 was received in respect of a debt previously written off, and a specific debt of £495 was allowed for. The allowance brought down as at 1 January 20X0 was £1,000. In respect of irrecoverable debts for the year ended 31 December 20X0 Arrow plc will:

 When petty cash is topped up to the imprest amount, the credit entry is made to:

 Which of the following statements is incorrect about trial balance?

 When two digits in an amount are accidentally recorded the wrong way round, there is an ______.

 When doing bank reconciliation, adjustments have to be made for timing differences. Which one of these constitutes a timing difference?

Closing inventories are treated as,

During 20X5 Bow plc received £500 from a customer in respect of a balance that had previously been written off, and allowed for a debt of £100. The allowance brought down as at 1 January 20X5 was £1,000. At the year end the dishonour of a cheque received for £280 needs to be accounted for, and the debt related to it needs to be written off. What is the irrecoverable debts debit or credit in the statement of profit or loss for the year ended 31 December 20X5?