QUESTION#1

Kevin operates his petty cash with an imprest of $120. At the end of one particular
week he had vouchers in the petty cash tin of $17.45, $32.16 and $21.94. No other
transactions took place.
In order to restore the petty cash balance what journal entry should Kevin post?
Dr Bank $71.55 Cr Petty cash $71.55

Dr Petty cash $71.55 Cr Bank $71.55

Dr Petty cash $48.45 Cr Bank $48.45

Dr Bank $48.45 Cr Petty cash $48.45

QUESTION#2

The following statements relate to the reconciliations to external documents:

(1) It is not possible to reconcile individual supplier balances to external documents

(2) Errors made by the bank which are discovered during a bank reconciliation mujst be
updated in the business's own accounting system
Which of the above statement(s) is/are correct?
Neither statement 1 nor statement 2
Statement 2 only
Statement 1 only
Both statement 1 and statement 2

QUESTION#3

Simon was owed $496.70 from Trevor. He subsequently found out that Trevor had
gone bankrupt and could not pay. Simon therefore wanted to write off Trevor's debt.
What would be the correct double entry to write off Trevor's debt?
Dr Receivables $496.70 Cr Irrecoverable debts $496.70

Dr Receivables $496.70 Cr Sales $496.70

 Dr Sales $496.70 Cr Receivables $496.70

Dr Irrecoverable debts $496.70 Cr Receivables $496.70

QUESTION#4

Chen commenced in business, creating and selling baked goods. They have a single
supplier and it allows a 30-day credit term. Sales are made from a retail unit and are
paid for immediately by customers.
How would you describe the nature of Chen’s business transactions?
Credit purchases and cash sales
Cash purchases and credit sales
Credit purchases and credit sales
Cash purchases and cash sales

QUESTION#5

Xiaosheng has purchased goods on credit from Yanlin. Yanlin has agreed that, should
Xiaosheng pay for these goods within 14 days of receipt, a 5% discount will be applied.
Which of the following correctly describes the type of discount from Xiaosheng’s
point of view, assuming that the invoice is paid within 14 days of receipt of
goods?
A trade discount allowed
A trade discount received
A settlement discount received
A settlement discount allowed

QUESTION#6

Laurie, who is registered for sales tax, purchased furniture for their business using cash.
The furniture had a price of $200, excluding sales tax. Sales tax is 20%.
How should this transaction be recognised in Laurie’s general ledger accounts
(to the nearest $)?
 Dr Furniture and fittings $200
Dr Sales tax account $40
Cr Bank $240

Dr Bank $200
Cr Furniture and fittings $167
Cr Bank $33

Dr Bank $240
Cr Furniture and fittings $200
Cr Bank $40

Dr Furniture and fittings $167

Dr Sales tax account $33
Cr Bank $200

QUESTION#7

Tanveer uses a computerised accounting system. Both the sales and purchases
systems are integrated to the accounting system. The bank and inventories systems are
not integrated.
Which of the following records are updated when an invoice is processed in the
purchases system?

(1) Trade payables general ledger account

(2) Detailed stock listing
(3) Bank general ledger account
(4) Detailed listing of suppliers and their individual balances

1, 2 and 4
1 and 4 only
1 and 3
1 and 2 only
QUESTION#8

When reviewing the year-end bank statement, Bobby discovered that an electronic
payment to a new employee had been omitted from the accounting records.
Which of the following manual journal entries will correctly account for the
payment to the new employee?
Dr Staff costs
Cr Bank

Dr Bank
Cr Staff Costs

Dr Staff costs
Cr Suspense account

Dr Suspense account
Cr Staff costs

QUESTION#9

Which of the following accounts would show a credit balance?

Account 1: Total Dr $400 Total Cr $200

Account 2: Total Dr $200 Total Cr $100
Account 3: Total Dr $300 Total Cr $300
Account 4: Total Dr $200 Total Cr $300

Account 4 only
Accounts 3 and 4
Accounts 2 and 3
Accounts 1 and 2

QUESTION#10

Which of the following should be reported in the statement of profit or loss?

 Revenue
Trade receivables
Non-current assets
Trade payables

QUESTION#11

Warren is a window cleaner. He cleaned Millie's windows and she paid him $10 in
cash.
What kind of transaction is this?
Purchase of a service by Millie
Purchase of goods by Warren
Sale of a service by Millie
Sale of goods by Warren

QUESTION#12

Which of the following would be classified as expenditure which should be

charged to profit or loss?

(1) Rental income

(2) Purchase of machine
(3) Purchase of goods which were later sold
(4) Employees' wages
2 and 4
1 and 3
3 and 4
1 and 2

QUESTION#13

Tarik posted goods he purchased for his own use into the business purchases account.
Which of the following journals will correct this error?
Dr Sales Cr Drawings

Dr Drawings Cr Sales

Dr Purchases Cr Drawings

Dr Drawings Cr Purchases

QUESTION#14

Bo is registered for sales tax and the rate is 20%. They made a cash sale to Xue of $60,
including sales tax.
Which of the following correctly shows how this transaction is treated in Bo's
general ledger accounts?
Sales of $60 and a cash receipt for the same amount
Sales of $50, sales tax of $10 and a cash receipt of $60
Sales of $72 and a cash receipt for the same amount
Sales of $60, sales tax of $12 and a cash receipt $72

QUESTION#15

Which of the following journal entries for a business is/ are correct?

(1) Returns accepted by its supplier:

Dr Trade payables
Cr Purchases / Purchase returns
(2) Discounts allowed:

Dr Trade payables
Cr Discounts allowed

1 only
2 only
 1 and 2
Neither 1 nor 2

QUESTION#16

What is the correct double entry to write off an irrecoverable receivables

balance?
Dr Trade receivables Cr Irrecoverable debt expense

Dr Irrecoverable debt expense Cr Trade receivables

Dr Trade payables Cr Irrecoverable debt expense

Dr Irrecoverable debt expense Cr Trade payables

QUESTION#17

Ade has commenced in business and wishes to arrange Bankers Automated Clearing
System (BACS) payments through their bank to deal with the following payments:

(1) Monthly salaries

(2) Direct debits
(3) Supplier payments

Which of the above payments would be appropriate for processing through

BACS?
3 only
1 and 2 only
2 and 3 only
1, 2 and 3

QUESTION#18

The following extract of account codes is taken from a business's accounting records:
Current assets (account numbers 20000 to 25999)
Bank 20000
Cash 21000
Petty cash 22000
Trade receivables 23000
Other receivables 24000
Inventories 25000

Current liabilities (account numbers 40000 to 44999)

Trade payables 40000
Other payables 42000
Bank overdraft 44000
Which of the following would be an appropriate account code for Parkers, a credit
customer?
25545
23274
40402
44564

QUESTION#19

Cash sales of $15,800 have been correctly entered in the cash account but entered as
$18,500 in the sales account.
What is the double entry to correct this transaction?
Dr Sales $2,700 Cr Cash $2,700

Dr Cash $2,700 Cr Sales $2,700

Dr Suspense account $2,700 Cr Sales $2,700

Dr Sales $2,700 Cr Suspense account $2,700

QUESTION#20

Which of the following entries correctly records a purchase of materials on

credit?
Dr Purchases Cr Cash

Dr Purchases Cr Trade payables

Dr Cash Cr Purchases

Dr Trade payables Cr Purchases

QUESTION#21

At the start of the year Bharvinder had an interest free loan of $20,000. During the year
he repaid $10,000.
Which parts of the accounting equation will change as a result of the loan
repayment?
Assets and liabilities
Liabilities and profit
Capital and liabilities
Capital and assets

QUESTION#22

Alvin received a supplier statement from Darcy showing that Alvin owed Darcy
$21,980. Alvin's records showed that he only owed Darcy $20,140.
Which of the following could be responsible for the discrepancy?
Darcy has recorded a payment made by Alvin twice in error
Darcy has performed a contra against a balance she owes to Alvin
Darcy has issued a credit note to Alvin which he has not yet received
Alvin has made a payment not yet received by Darcy

QUESTION#23
Alex holds the following information:

(1) Customer and supplier invoices for three years

(2) Customer complaint forms for one year
(3) Tax information for six years
What is this policy known as?
Document security policy
Compliance policy
Data protection policy
Retention policy

QUESTION#24

Which of the following would appear on a supplier's statement?

(1) Invoices issued during the period

(2) Trade discounts given during the period
(3) Credit notes issued during the period
(4) Payments made during the period

1 and 4 only
2 and 3 only
1, 3 and 4 only
1, 2, 3 and 4

QUESTION#25

Which of the following correctly represents the accounting equation?

Capital $22,000 Assets $27,000 Liabilities $49,000

Capital $49,000 Assets $22,000 Liabilities $27,000

Capital $49,000 Assets $27,000 Liabilities $22,000

 Capital $27,000 Assets $49,000 Liabilities $22,000

QUESTION#26

Chidi’s trade payables general ledger account for June 20X4 is summarised as follows:

Trade payables general ledger account

Description Dr Description Cr
$ $
Opening balance 620

Cash paid 1,430 Purchases 1,290

Closing balance 480

Total 1,910 Total 1,910

What amount does Chidi owe to their suppliers at 30 June 20X4?

$1,910
$1,430
$1,290
$480

QUESTION#27

Nusrat, who is registered for sales tax, purchased a computer using cash. The
computer had a list price, excluding sales tax, of $300 but the supplier offered a trade
discount of 10%. Sales tax is 20%.
What is the manual journal entry to recognise the computer in Nusrat’s
accounting system?
Dr Computer equipment - $300
cost
Dr Sales tax account $60
 Cr Bank $270

Dr Computer equipment - $360

cost
Cr Bank $360

Dr Computer equipment - $270

cost
Dr Sales tax account $54
Cr Bank $324

Dr Computer equipment - $270

cost
Cr Bank $270

QUESTION#28

Esther received $4,418 from a customer to whom she had sold goods on credit for
$3,760 plus sales tax of $658.
What is the double entry for this receipt in the accounts of Esther?
Dr Sales $3,760 Cr Cash $3,760

Dr Cash $4,418 Cr Trade receivables $4,418

Dr Trade receivables $4,418 Cr Cash $4,418

Dr Cash $3,760 Cr Sales $3,760

QUESTION#29

Which of the following are reasons for performing a reconciliation of the detailed
listing of supplier accounts to the individual supplier statements?

(1) To check that all credit purchases from individual supplier have
been included
(2) To check that all payments for individual cash purchases have
been deducted
(3) To check that all payments for individual credit balances have
been deducted
(4) To check that all returns to individual credit suppliers have been
deducted
1, 3 and 4
1, 2 and 3
1 and 4 only
1 and 3 only

QUESTION#30

The following is an extract from a ledger account:

Cash ledger
$ $
9 Oct Sales 1,270 26 Oct Purchases 587
19 Sales 1,959
Oct
30 Sales 1,035
Oct
What is the closing balance on the cash account?
Debit balance of $4,264
Debit balance of $3,677
Credit balance of $3,677
Credit balance of $4,264

QUESTION#31

Joanna has instructed her bank to make regular payments to a specific charity. The
cash goes straight from her account and the charity cannot amend the amount paid.
What method of payment is Joanna using?
 Direct debit
Standing order
Petty cash payment
BACS payment

QUESTION#32

When performing a bank reconciliation, which of the following would require

adjustments to the bank ledger account?

(1) Unpresented cheques

(2) Bank charges not yet accounted for
(3) Outstanding lodgements
(4) Standing order payments not accounted for

2 and 4
1 and 4
1 and 3
2 and 3

QUESTION#33

Which of the following checks should the petty cashier make prior to paying out
petty cash?

(1) That the claim is supported by appropriate documentation

(2) That the claim has been authorised by an appropriate signature
(3) The credit rating of the business receiving the payment
(4) That the amount is within the petty cash limit

1 and 2 only
1, 2 and 4
 2 and 3
3 and 4

QUESTION#34

The bank statement of Hugo showed a debit balance of $12,800. The bank
reconciliation showed there were outstanding lodgements of $3,400 and unpresented
cheques of $4,700.
What is the correct amount of cash that should be recorded in Hugo's accounts?
$14,100 Dr
$11,500 Dr
$11,500 Cr
$14,100 Cr

QUESTION#35

Manfred runs his own business and operates an imprest system of petty cash
maintaining a float of $200. At the end of November there is cash of $37.20 and
vouchers of $162.80.
How much will Manfred need to pay into petty cash to maintain the float?
$125.60
$162.80
$37.20
$200

QUESTION#36

The following is extracted from the trial balance at the year end:

$
Capital 9,000
Sales 32,000
Purchases 26,000
Trade receivables 23,000
Inventories 14,000
Trade payables 12,000
Bank overdraft ?
What is the figure for the bank overdraft?
$12,000
$22,000
$28,000
$10,000

QUESTION#37

Eddy has purchased a van for his delivery business and paid by cheque. Eddy uses
account codes in his ledgers. His account codes include:

Bank B2150
Motor Vehicles M4270
Purchases P3820
Which of the following is the correct double entry to record the transaction to the
correct accounts?
Dr P3820 Cr B2150

Dr B2150 Cr M4270

Dr M4270 Cr B2150

Dr B2150 Cr P3820

QUESTION#38

A transaction has been recorded in the ledger of Samir as follows:

Equipment
$ $
19 Oct Bank 16,800
 Bank
$ $
19 Oct Equipment 16,800

What was the transaction?

Banking of the proceeds from the sale of equipment
Purchase of equipment paid for by bank transfer
Purchase of equipment on credit
Receipt of a bank loan to purchase equipment

QUESTION#39

The following information for wages and salaries has been taken from the accounts of
Roman:

$
Wages and salaries (gross) 65,708
Income tax 15,770
Employer's pension contributions 5,257
Employee's pension contributions 3,942

There are no statutory or non-statutory deductions other than the above.

What is Roman's total wages and salaries expense?
$65,708
$74,907
$90,677
$70,965

QUESTION#40
Jan is employed at an annual salary of $18,720. She is contracted to work 30 hours per
week, which equates to 1,560 hours per year. She is not paid for the first seven hours of
overtime worked in a week. Any overtime in excess of seven hours in a week is paid at
double time.

During one week Jan worked 12 hours of overtime.

What will be Jan's overtime pay for the week?
$288
$480
$120
$60

QUESTION#41

Jasminder had correctly recorded a wages and salaries expense of $32,000 in her
accounts. She only has two employees who each earn a gross salary of $14,000 per
annum.
Which of the following could explain the difference between the gross salaries
and total wages and salaries in the accounts?
Employee pension contributions
Employee income tax payments
Pension contributions paid by Jasminder on behalf of her employees
Jasminder's drawings

QUESTION#42

Velma sent an invoice to Marion for goods purchased. Velma subsequently issued a
debit note to Marion.
Which of the following would explain the issue of the debit note?
The invoice should have been sent to a customer called Maureen not Marion
The invoice was incorrectly totalled and overstated by $500
Packing and posting costs payable by the customer were omitted from the invoice
Marion has refused some of the goods as they were faulty

QUESTION#43
Which of the following transactions will be recognised in the bank general ledger
account?
A manual journal entry for a depreciation charge
Supplier invoice input to the purchases system
Sales invoice issued from the sales system
A manual journal entry for bank charges

QUESTION#44

Which of the following items would appear on opposite sides of the trial balance?
Sales and capital
Trade receivables and purchases
Motor vehicles and inventory
Trade payables and expenses

QUESTION#45

Qui maintains a detailed account for each of their suppliers. At year end, the account of
one supplier showed a credit balance of $45,000. A review of the account revealed two
errors:

(1) A purchase invoice for $6,300 was entered in the computerised

accounting system as $3,600
(2) A manual journal entry for a $1,200 settlement discount received
was debited to sales and credited to trade payables

The sum of the detailed accounts agrees in full with the trade payables general ledger
account.

What is the adjusted balance on this supplier’s individual account after the above
errors have been corrected?
$43,500
$45,300
$46,500
$44,700
QUESTION#46

Jenny has trade receivables of $92,320 at the start of November. During November
she had the following transactions:

$
Cash sales 15,200
Cash receipts from customers 46,420
Credit sales 38,170
Irrecoverable debts written off 2,600
What is Jenny's trade receivables balance at the end of November?
$81,470
$84,070
$99,270
$96,670

QUESTION#47

Xena buys goods from Alex for $20,800 on credit. She subsequently returns goods
worth $3,100 and pays him $9,200.
In Xena's list of individual supplier accounts, what is Alex's balance as a result of
these transactions?
$8,500 Dr
$8,500 Cr
$26,900 Dr
$26,900 Cr

QUESTION#48

Rodger is registered for sales tax which is charged at 17.5%. A customer is invoiced for
goods with a list price of $240,000. The customer is given a trade discount of 25%.
How much sales tax should be included on the invoice?
 $26,809
$31,500
$35,745
$42,000

QUESTION#49

Efe entered a $1,100 supplier invoice as $1,010 in the purchases module of their
computerised accounting system.
What type of error has Efe made?
Compensating error
Error of principle
Error of single entry
Transposition error

QUESTION#50

Which of the following are valid reasons for having a formal document retention
policy?

(1) To help minimise costs associated with maintaining business records

(2) To ensure that all business records are kept for the maximum time possible
(3) To help locate business records
(4) To ensure the trial balance balances

1 and 4
1 and 3
2 and 4
2 and 3