SKANS School of Accountancy Rawalpindi

FA1 Mock 3 Total Marks: 100 Passing Marks: 60 Time

Allowed: 2 Hours

Attempt all questions:

1) Vic's receivables ledger balances add up to $50,000 which does not

agree with his trade receivables control account.

(1 A bank credit transfer from a credit customer of $750 was not recorded in the
) receivables ledger
(2 A contra entry of $2,000 was entered into the control account but not in the
) receivables and payables ledgers
What should the total of the balances on his receivables ledger be after correcting
the following errors?
$49,25
0
$50,00
0
$52,75
0
$47,25
0

2) Which of the following is an asset?

An overdraft

Money owed by a business

The capital of a business

Machinery owned by a
business

3) Which of the following is the correct entry to record a credit transaction

entered into with a supplier?
Dr Payables Cr Purchases

Dr Sales Cr Receivables

Dr Purchases Cr Payables
 Dr Receivables Cr Sales

4) Which of the following would be on the credit side of the trade payables
control account?
Contras with the trade receivables control
account

Payments to suppliers

Purchase returns

Purchases

5) Bharvinda offers customers a 5% settlement discount if they pay within

ten days.
In which book of prime entry will this discount be recorded?
Sales day book

Purchase day book

Cash receipts book

Cash payments
book

6) Which of the following is correct?

Capital - Liabilities =
Assets
Liabilities - Capital =
Assets
Assets - Capital =
Liabilities
Assets + Liabilities =
Capital

7) What document is a proof of payment?

Delivery
note

Advice note

Invoice

Receipt
8) Which of the following is the correct double entry to record discounts
given by a supplier?
Dr Payables Cr Discounts allowed

Dr Payables Cr Discounts
received

Dr Discounts Cr Payables
received

Dr Discounts Cr Payables
allowed

9) Warren had a positive cash balance of $430.60 in his cash book. When
performing a bank reconciliation he discovered that he had not recorded a
standing order payment of $80.
After this error has been corrected what will be the balance both in his
cash book and on his bank statement?
Dr Cash book $510.60 Cr Bank statement $510.60

Cr Cash book $510.60 Dr Bank statement $510.60

Cr Cash book $350.60 Dr Bank statement $350.60

Dr Cash book $350.60 Cr Bank statement $350.60

10) Which of the following accounts is an expense account?

Ebeneezer (a
customer)

Rent paid

Discounts received

Kamalar (a supplier)

11) Shazheena offers a 2% trade discount to all customers but increases

this trade discount to 7% if a customer's purchases exceed $5,000. She
sells goods to Alan with a list price of $5,200.
What will be the total on the invoice she sends to Alan? (Ignore sales tax.)
$5,08
6
$5,09
6
 $4,94
0
$4,83
6

12) Which of the following errors would require a suspense account in

order for the trial balance $520052 to balance?
A debit balance of $7,300 for motor expenses in the trial balance actually
related to the purchase of a motor van

A purchase invoice of $562 has been omitted from the books of prime entry

Discounts allowed of $2600 have been recorded as a credit balance in the trial
balance
The sales day book has been overstated by $3,200

13) Which business document authorises a payment to a supplier?

Advice note

Remittance advice

Internal cheque
requisition

Purchase requisition

14) Farsa returned some goods to Kerry, a credit supplier, because they
were unsuitable.
Which of the following would correctly document the return?
(1 Farsa sends Kerry a debit note
)
(2 Farsa sends Kerry a credit note
)
(3 Kerry sends Farsa a debit note
)
(4 Kerry sends Farsa a credit note
)
1 and
3
2 and
4
2 and
3
 1 and
4

15) How should the total of the discounts column on the cash payments
side of the cash book be posted to the general ledger?
Dr Receivables control Cr Discounts allowed

Dr Payables control Cr Discounts received

Dr Discounts received Cr Payables control

Dr Discounts allowed Cr Receivables control

16) May has just purchased goods for resale from a supplier for $315. She
has agreed to pay for them in 30 days time.
Which of the following is the correct entry for May to record this transaction?
Dr Purchases $315 Cr Payables $315

Dr Sales $315 Cr Receivables $315

Dr Receivables $315 Cr Sales $315

Dr Payables $315 Cr Purchases $315

17) The following statements relate to an aged receivables analysis:

(1 An aged receivables analysis is a report listing all the suppliers of a business,

) how much they are owed and for how long the amount has been outstanding

(2 An aged receivables analysis is a report that is useful for identifying late payers
) and for providing information on debt collection efficiency to the management

Which of the above statements is/are correct?

Statement 1
only
Statement 2
only

Both statements

Neither
statement

18) What does a paying-in slip give details of?

 The invoice a customer is paying

The cheques paid out to suppliers

The quantities of cash and cheques paid into the

bank

The credit card payments made by customers

19) The balance on the payables ledger control account is $3,300 but the
total of the individual trade payables ledger account is $4,900.
Which of the following could account for the difference?
The purchase day book is overcast by $1,600

A balance of $1,600 owing to Bob Smith omitted from the total of the individual
ledger accounts

Discounts received of $1,600 omitted from the control account

Discounts received of $1,600 omitted from the individual accounts

20) The following statements relate to the coding of transactions:

(1 Faceted codes are made up of a number of sections, each section of the code
) representing a different feature of the item

(2 Sequence codes include a descriptive element to make it easy to find the right
) code
Which of the above statements is/are correct?
Both statements

Neither
statement
Statement 1
only
Statement 2
only

21) With an imprest system of petty cash which of the following is correct?
Vouchers + Cash held =
Imprest
Cash held + Imprest =
Vouchers
Imprest + Vouchers = Cash
held
 Cash held - Vouchers =
Imprest

22) Which of the following types of account would normally have credit
balances in a trial balance?
(1 Asset accounts
)
(2 Liability accounts
)
(3 Income accounts
)
(4 Expense accounts
)
1 and
4
2 and
4
2 and
3
1 and
3

23) Which department within an organisation is MOST affected by data

protection legislation?
Product research and
development

Treasury

Human resources

Purchasing

24) When a cheque is crossed A/C payee which of the following is true?
It can be cashed by any type of business

It does not have to go through the clearing system

It can be endorsed

It must be paid into the account of the person named on the

cheque

25) Which of the following describes a sales invoice?

A written statement of the amount of money that has been paid by the
 customer

A document sent to a potential customer quoting the price for goods

A written request for payment from a supplier giving details of items

purchased
A written request to a credit customer for payment giving details of items
sold

26) Xyon buys machinery from Zavlax for $10,000 agreeing to pay in 30
days' time.
What is the correct double entry to record this transaction in Xyon's
books?
Dr Machinery Cr Payables

Dr Machinery Cr Cash

Dr Purchases Cr Cash

Dr Purchases Cr Payables

27) Dean owed Hedley $192.00 but was declared bankrupt and was only
able to pay his credit suppliers $0.30 for every $1 outstanding.
How should Hedley record the payment from Dean in his ledger?
Dr Cash $57.60 Dr Irrecoverable $134.4 Cr $192.0
debts 0 Receivables 0

Dr Irrecoverable $57.60 Cr Receivables $57.60

debts

Dr Irrecoverable $134.4 Cr Payables $134.4

debts 0 0

Dr Cash $57.6 Dr Irrecoverable $134.4 Cr $192.0

0 debts 0 Payables 0

28) Juliette paid a supplier $240 after taking advantage of a 5%

settlement discount received. She also made a credit purchase from
another supplier on the same day.
Which two books of prime entry would the above transactions be recorded
in?
Cash receipts book and sales day book

Cash payments book and purchase day

book
 Cash receipts book and purchase day
book
Cash payments book and sales day
book

29) Which of the following employee related expenses would be paid out
of petty cash?
The purchase of a car to be driven by the sales director

Payment of monthly salaries for the production staff

Payment of pensions contributions

Payments of taxi journeys for employees occasionally

working late

30) Which double entry would record a credit transaction with a customer?
Dr Purchases Cr Payables

Dr Sales Cr Receivables

Dr Payables Cr Purchases

Dr Receivables Cr Sales

31) Sogo Co has credit accounts set up with all of its suppliers.
Which of the following are reasons why a particular supplier account may
not reconcile to the supplier's statement?
(1 Sogo Co recently sent a payment by cheque in the post to the supplier
)
(2 The supplier recently sent Sogo Co a credit note which Sogo Co has not
) recorded on the supplier account

(3 The supplier recently purchased goods from Sogo Co and has entered a contra
) on Sogo Co's customer account. Sogo Co has not entered the same contra

(4 There is a dispute between Sogo Co and the supplier over a particular invoice
) which both parties have recorded in their accounts

1, 2 and 4

1 and 2
only

1, 2 and 3
 3 and 4

32) Johan had a debit balance in his cash book of $2,312 but his bank
statement showed he was in credit by $3,425.
Which of the following would explain the difference?
Outstanding lodgements of
$1,113
Unpresented cheques of
$1,113
Outstanding lodgements of
$5,737
Unpresented cheques of
$5,737

33) In the trade receivables control account which of the following would
be on the debit side?
Discounts
allowed
Irrecoverable
debts

Cash received

Sales

34) Barik purchased items of stationery paying by cheque.

What is the double entry to record this?
Dr Stationery Cr Bank

Dr Stationery Cr Petty cash

Dr Bank Cr Stationery

Dr Petty cash Cr Stationery

35) To make the trial balance balance a suspense account has been
opened showing a credit balance of $560.
Which one of the following could be the reason for the suspense account?
Opening inventory of $560 omitted from the trial balance

A bank overdraft of $280 shown as a positive cash balance

 Purchase of a van for $560 recorded as a motor expense

Receivables recorded in the trial balance as $3,620 instead of

$4,180

36) Bertha had a credit balance of $4,697 on her suspense account. The
following errors were then discovered:

(1 Inventory of $2,672 had been omitted from the trial balance

)
(2 Capital brought forward of $10,000 had been included on the debit side of the
) trial balance
(3 A cash payment of $2,600 had been included twice in the cash account
)
After adjusting for the above errors what is the outstanding balance on the
suspense account?
$15,231
Dr
$10,031
Dr

$5,375 Cr

$14,769
Cr

37) At the beginning of May Barbara has receivables in total of $42,390.

During May she has the following transactions:

$
Sells good on credit 12,38
0
Makes cash sales 3,890
Receives cash from credit 8,490
customers
Writes off irrecoverable debts 695
Returns from credit customers 426
What is the balance on Barbara's receivables account at the end of May?
$2,769

$49,04
9
 $6,659

$45,15
9

38) Anton is employed at an annual salary of $20,800. He is contracted to

work 40 hours per week, 52 weeks a year (including five weeks paid
holiday). If overtime has to be worked the first six hours of overtime in
any week are not paid for. Any overtime in excess of six hours in a week is
paid for at time and a half.

During one week Anton worked nine hours of overtime.

What will be Anton's overtime pay for the week?
$45

$13
5

$30

$44
5

39) The sales ledger control account had a balance of $32,920 but the list
of customer balances totalled $35,760.
Which of the following would explain the difference?
A contra of $2,840 with the purchase ledger has not been done in the control
account
A customer balance of $2,840 has been omitted from the list of customer
balances

The sales day book total is understated by $2,840

The trade receivables column of the cash receipts book is understated by

$2,840

40) Which of the following would normally be on the same side in the trial
balance?
Sales and drawings

Receivables and purchases

Loan liabilities and interest expense

Payables and discounts allowed

41) Gustav is invoicing a customer for goods with a list price of $8,000.
The customer is given:

(1 A trade discount of 10%

)
(2 A settlement discount of 5% if the invoice is paid within 28
) days
How much should the customer pay if payment in full is made in 21 days?
$6,84
0
$8,00
0
$7,20
0
$7,60
0

42) Nanette works for Piroz and is paid a basic wage of $1,000 a week.
Piroz operates the following bonus scheme:

(1 Each employee gets a bonus of $4 for every unit they produce in excess of
) 2,000 units for the week
(2 If total production is more than 15% higher than the target production for that
) week an additional bonus of 8% of the basic wage for the week is paid to
each employee

In week 26 the target set by Piroz was 40,000 units and actual production was
39,200 units. Nanette produced 2,600 of these.
What is Nanette's bonus for week 26?
$3,400

$3,480

$2,400

$2,480

43) The balance on the list of supplier balances of $15,950 does not
agree with the purchase ledger control account. It is subsequently found
that a credit note issued by a supplier for $680 was missed from the list
of balances and that the purchase day book was undercast by $1,220.
What is the corrected total on the purchase ledger control account?
$16,63
0
$17,85
0
$15,27
0
$16,49
0

44) Malcolm purchased goods from Wendy with a value of $4,900. He

paid cash of $2,900 immediately and agreed to pay the rest in 30 days.
What is the correct double entry to record this transaction in Wendy's accounts?
Sales Cr $2,900 Cash Cr $2,000 Receivables Dr $4,900

Sales Dr $2,000 Cash Dr $2,900 Receivables Cr $4,900

Sales Dr $4,900 Cash Cr $2,900 Receivables Cr $2,000

Sales Cr $4,900 Cash Dr $2,900 Receivables Dr $2,000

45) Pavan has a year end of 30 November 20X8. On 30 November 20X8

she buys a car on credit to use solely in her business.
Which parts of the business' accounting equation will the purchase of the
car change on 30 November 20X8?
Assets and Profit

Assets and
Liabilities

Capital and Profit

Capital and
Liabilities

46) Javesh has a basic salary of $3,200 for November. His income tax on the salary
is $640 and he pays state benefit contributions of $290. His employer also pays
state benefit contributions of $340 and pension contributions for Javesh of $160.
How much will Javesh receive as his net pay for November?
 $2,270

$1,930

$2,770

$1,770

47) Which one of the following is a reason for preparing a receivables

ledger reconciliation?
To check the calculation of gross
profit
To confirm the accuracy of
postings

To identify overdue accounts

To calculate discounts allowed

48) On 1 December 20X8 Pavel received a loan of $5,000 to help finance

his business. He paid interest of 5% for the year on 30 November 20X9.
Which of the following is the correct treatment for the interest expense?
Dr Loan Cr Bank

Dr Bank Cr Interest expense

Dr Bank Cr Loan

Dr Interest expense Cr Bank

49) At the beginning of October Simon has total trade receivables of

$26,700. During October he has the following transactions:

$
Credit sales 75,50
0
Cash receipts from 80,00
customers 0
Sales returns 700
Irrecoverable debts 2,000
What is the balance on Simon's trade receivables account at the end of
October?
$19,50
0
$23,90
0
$20,90
0
$28,50
0

50) The following has been extracted from Gordon's purchase returns day
book:

Purchase Sales tax Total

returns
$15,260 $2,670.50 $17,930.50
How should this be recorded in Gordon's ledgers?
Dr Purchase $17,930. Cr Sales $2,670.5 Cr Payables $15,26
returns 50 tax 0 0

Dr Purchase $15,26 Dr Sales $2,670.5 Cr Payables $17,930.

returns 0 tax 0 50

Dr Payables $17,930. Cr Purchase returns $17,930.

50 50

Dr Payables $17,930. Cr Sales $2,670.5 Cr Purchase $15,26

50 tax 0 returns 0