WESTLAKE SECONDARY SCHOOL

Ordinary Level Accounting

Student Name(s):

Student Surname:
Date:

Muiltiple Choice
Time : 50 minutes

Instructions:
1. Candidates should attempt ALL questions

2. ALL questions carries equal marks.

3. Make sure to tick or mark the correct answer.

4. Marks will not be awarded if you tick or mark 2 or more answers.

Topics: Double Entry Bookkeeping and Accounting Procedures

1. Jill has received her bank statement from the bank.

Which of the following does she need to record when updating her cash book? (1 mark)
A. a bank charge
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B. a bank error
C. an uncredited deposit
D. the bank statement balance

2. According to the bank column in his cash book, Bob had $420 in the bank on 31
October. On that same date, the statement from the bank showed a credit balance of
$495 for the account.

Bob found that a bank charge for $37 had not been recorded in the cash book, and also
that a cheque he had written to a supplier for $112 had not yet been debited by the bank.

What is the bank balance that Bob should show in his statement of financial position
for 31 October? (1 mark)
A. $383 asset
B. $420 liability
C. $457 asset
D. $607 liability

3. Seung provided the following information on 31 October. (1 mark)

bank error credit transfer

A bank reconciliation statement bank reconciliation statement
B bank reconciliation statement updated cash book
C updated cash book bank reconciliation statement
D updated cash book updated cash book
4. The bank account in Ina’s cash book showed a debit balance of $230. After
comparing her cash book to the bank statement, she used the information in the bank
statement to update the cash book with the following items. (1 mark)

bank interest paid $23

credit transfer from a credit customer $80
credit transfer to a credit supplier $110
What was the debit balance on the bank account after Ina updated her cash book?
A. $63
B. $177
C. $223
D. $237

7. In a trader’s cash book, the balance of the bank column was $780 debit.

When the trader received his bank statement, he discovered that the following items
did not appear on it. (1 mark)

cheque not yet credited $650

cheque not yet presented $55
What was the balance on the trader’s bank statement?
A. $185 credit
B. $185 debit
C. $1375 credit
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D. $1375 debit

5. The bank column in Arthur’s cash book showed a debit balance of $5167. Arthur
discovered the following when he compared his cash book with his bank statement. (1
mark)

uncredited deposits $512

unpresented cheques $407
a standing order paid in error by the bank $66
What was the closing balance shown on Arthur’s bank statement?
A. $4996 credit
B. $4996 debit
C. $5338 credit
D. $5338 debit

6. The balance of cash at bank shown in Edith’s cash book is $2300. The bank
statement she received showed the balance to be $2620 at the same date. (1 mark)

Which one of the following could explain the difference?

A. cheques to suppliers, $160, not yet presented to the bank
B. payment from a customer, $160, entered on the wrong side of the cash book
C. bank charges, $320, not in the cash book
D. receipts from customers, $320, banked but not yet entered in the bank statement

7. Which of the following is not a reason for preparing a monthly sales ledger control
account? (1 mark)
A. checking each entry recorded in the trade receivables’ accounts in the sales ledger
B. preventing and reducing fraud, as the control account and sales ledgers are prepared
by different people
C. providing a summary of the trade receivables’ transactions during the month
D. proving that the sales ledger entries are arithmetically correct

8. Why is a purchases ledger control account prepared? (1 mark)

A. to enable the income statement to be prepared quickly
B. to ensure that all purchases ledger accounts are accurate
C. to provide a summary of transactions with credit suppliers
D. to show the amount owed to each trade payable

9. Which of the following statements about a purchases ledger control account is not
correct? (1 mark)
A. It assists in the location of errors.
B. It ensures deadlines are met to receive cash discounts.
C. It helps to prevent fraud.
D. It provides a quick total of trade payables.

10. Bheka is preparing his sales ledger control account. He needs to know: (1 mark)
1. the total for cash discounts allowed to credit customers
2. the amount of credit customers’ debts which have been written off as irrecoverable
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Where can he find this information?

cash discounts irrecoverable debts

A cash book irrecoverable debts account
B cash book general journal
C discounts allowed account irrecoverable debts account
D discounts allowed account general journal
11. A sales ledger control account had a debit balance of $13,500. (1 mark)

It was found that a $1,500 entry for irrecoverable debts had been entered on the wrong
side of the sales ledger control account.

What was the correct debit balance on the sales ledger control account?
A. $10,500
B. $12,000
C. $15,000
D. $16,500

12. Medea provided the following information. (1 mark)

October 1 sales ledger control account balance $550 debit

31 credit sales $605
cheques received from trade receivables $350
irrecoverable debts written off $90
cheque received from credit customer dishonoured $35
What was the debit balance on the sales ledger control account on 31 October?
A. $680
B. $750
C. $805
D. $860

13. Anika’s ledger contained the following partly completed account. (1 mark)

Purchases ledger control account

$ $
Oct 31 bank 35,000 Oct 1 balance b/d 1,030
discount received 850 31 purchases 40,500
The following entries still need to be recorded in the account.
1. Credit suppliers charged $75 interest for overdue payments.
2. Balances owing in the purchases ledger totalling $575 were set off against balances in
the sales ledger.

What will the closing balance on the purchases ledger control account be after these
entries are made?
A. $5,030
B. $5,180
C. $6,180
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D. $6,330

14. Why is the person who prepares a sales ledger control account usually not the
same person who maintains the sales ledger? (1 mark)
A. to assist with preparing financial statements
B. to find errors
C. to prevent fraud
D. to provide a total of trade receivables

15. Which one of the following would be recorded on the debit side of a sales ledger
control account? (1 mark)
A. bank transfers from credit customers
B. cash refunded to credit customers
C. discount allowed
D. sales returns

16. On 1 January, Kylsha’s sales ledger control account had a debit balance of $3,100.
(1 mark)

During January, $14,000 was received from credit customers, and a debt of $150 was
written off as irrecoverable. On 31 January, credit customers owed Kylsha $2,500.

What was the total of credit sales in January?

A. $11,650
B. $13,400
C. $13,550
D. $16,950

17. What does the purchases ledger of a business contain? (1 mark)

A. accounts of trade payables
B. accounts of trade receivables
C. purchases account
D. purchases ledger control account

18. Maheen is a sole trader. During the financial year she took goods from the busi-
ness for her own use. How should she record this in the business’s books? (1 mark)

account debited account credited

A drawings inventory
B drawings purchases
C income statement inventory
D income statement purchases
19. Liina is a trader. She took goods from the business for personal use which had
cost $210. In addition the business had paid $12 carriage to have those goods delivered.
(1 mark)

How would this be recorded in Liina’s accounts in the business’s books?

A. debit Liina’s capital account $210
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B. debit Liina’s capital account $222

C. debit Liina’s drawings account $210
D. debit Liina’s drawings account $222

20. Amani’s financial year ends on 31 December. On 1 January 2024 Amani’s pur-
chases ledger showed a credit balance of $250 on William’s account. (1 mark)

What does this mean?

A. Amani had paid $250 to William.
B. Amani owed $250 to William.
C. William had paid $250 to Amani.
D. William owed $250 to Amani.

21. Anran received $450 in cash from Minh for rent. (1 mark)

How did Anran record this?

account debited account credited

A cash rent receivable
B Minh rent receivable
C rent receivable cash
D rent receivable Minh
22. Arkady rents premises from Boryslav and pays the rent by cheque. (1 mark)

How would Arkady record this?

account debited account credited

A bank rental expenses
B cash rental expenses
C rental expenses bank
D rental expenses cash
23. Yaoti bought goods on credit from Tizoc. Later she returned some of the goods
to Tizoc. (1 mark)

How should Tizoc record the return in his books?

account debited account credited

A purchases returns Yaoti
B sales returns Yaoti
C Yaoti purchases returns
D Yaoti sales returns
24. Ayanda debited the income statement and credited her capital account. (1 mark)

What does this double entry record?

A. capital introduced
B. drawings
C. loss for the year
D. profit for the year
Westlake Secondary School - Accounting Test 7

25. Rosie owns a repair shop. She purchases some equipment for the shop on credit
from WEC Limited. (1 mark)

How should Rosie record this?

account debited account credited

A equipment WEC Limited
B purchases WEC Limited
C WEC Limited equipment
D WEC Limited purchases
26. Which of the following actions is an example of double entry book-keeping? (1
mark)
A. making a journal entry to record the correction of an error made in the corresponding
ledger
B. making entries in the purchases journal and the purchases ledger to record goods pur-
chased on credit
C. recording cash paid to a trade payable in the cash book and purchases ledger
D. recording the sale of goods on credit in the sales journal and the sales ledger

27. Cerys is a trader. She purchases a new vehicle for delivering goods to her cus-
tomers, and pays for it by cheque. (1 mark)

How should Cerys record this transaction in her books?

account debited account credited

A bank motor vehicles
B bank purchases
C motor vehicles bank
D purchases bank
28. Kanya used a cheque to settle Puneet’s account. As she had settled her account
quickly, Kanya received a cash discount. (1 mark)

How did Kanya record this discount?

account debited account credited

A bank discount received
B discount received bank
C discount received Puneet
D Puneet discount received
29. Inaya is the owner of a shop. When setting the selling price of goods, she marks
her inventory up by 40%. She took inventory for her own use that cost her $200, but she
did not pay for it. (1 mark)

How should this be entered in the accounts?

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account debited account credited

A drawings $200 purchases $200
B drawings $280 purchases $280
C trade receivables $200 sales $200
D trade receivables $280 sales $280
30. Samira’s business books contain the following account. (1 mark)

Mahdi account
Date Details $ Date Details $
2024 2024
Oct 1 returns 125 Oct 1
balance b/d 700
Oct 31 bank 480 Oct 12
purchases 450
discount 20
balance c/d 525
1,150 1,150
Which statement is correct?
A. On 1 October, Mahdi owed Samira $700.
B. On 12 October, Mahdi purchased goods worth $450 from Samira.
C. On 31 October, Samira allowed Mahdi $20 trade discount.
D. On 31 October, Samira owed Mahdi $525.

31. Which of the following consists of a list of ledger balances on a particular date?
(1 mark)
A. bank statement
B. control account
C. suspense account
D. trial balance

33. A trader prepared a trial balance for his business at 31 March 2024. (1 mark)

Which of the following statements about this trial balance is correct?

A. It shows a summary of the financial position at 31 March 2024.
B. It shows the gross profit for the year ended 31 March 2024.
C. It shows the ledger account balances as of 31 March 2024.
D. It shows the sales transactions for the year to 31 March 2024.

34. Jeb opened a suspense account at the end of his financial year. (1 mark)

Why did he need to open this account?

A. the suspense account had not been included in the ledger
B. the totals on the trial balance did not agree
C. to check that there were no errors in the ledger
D. to correct an error of commission

35. Goods bought on credit from T Jones were credited in error to the account of W
Jones. (1 mark)

Which type of error has been made?

Westlake Secondary School - Accounting Test 9

A. commission
B. omission
C. original entry
D. principle

36. Which one of the following statements correctly describes a suspense account?
(1 mark)
A. It is an account that is opened to check for errors in a trial balance.
B. It is an account that is opened when the totals of a trial balance are not equal.
C. It is a permanent account that is used to correct the income statement.
D. It is a temporary account that is used to correct errors of omission.

37. Rent paid to a landlord was credited to the rent payable account and debited to
the cash book. (1 mark)

Which type of error has been made?

A. commission
B. complete reversal
C. omission
D. principle

38. A suspense account was opened after the totals of a trial balance did not agree.
It was found that sales returns, $730, had been credited to the purchases returns account.
(1 mark)

Which journal entry is required to correct this error?

debit $ credit $
A purchases returns 730 sales returns 730
B suspense 730 sales returns 730
C purchases returns 730 sales returns 730
suspense 1,460
D purchases returns 730 sales returns 730
suspense 730
39. After a trial balance had been completed, the following errors were found. (1
mark)
- The total of the purchases account was overstated by $50
- The total of the rental income account was overstated by $50

Which of the following statements is correct about the trial balance that had been
completed?
A. The total of the credit column was $50 more than that of the debit column.
B. The total of the credit column was $100 more than that of the debit column.
C. The total of the debit column was $100 more than that of the credit column.
D. The total of the debit column and the credit column were equal.

40. After completing the trial balance, it was found that an amount of $2,700 for
equipment repairs had been entered in the equipment account. (1 mark)
Westlake Secondary School - Accounting Test 10

Which type of error is this?

A. compensating
B. complete reversal
C. original entry
D. principle

41. Which of the following errors would cause the gross profit to be overstated? (1
mark)
A. closing inventory omitted from the income statement
B. opening inventory under-valued
C. purchases recorded at list price, without trade discount deducted
D. sales invoices not recorded in the sales journal

42. Equipment, $3,000, was incorrectly posted to the credit side of the purchases
account. (1 mark)

The draft version of the profit for the year was $82,000.

What was the revised profit for the year after the correction of the error? You may
ignore depreciation.
A. $76,000
B. $79,000
C. $85,000
D. $88,000

43. Karen introduced additional capital of $7,500 to her business. She mistakenly
debited this to the capital account and credited it to the bank account. (1 mark)

When this error is corrected, what effect will that have on the statement of financial
position?

capital $ bank $
A decreases by 7,500 decreases by 7,500
B decreases by 15,000 decreases by 15,000
C increases by 7,500 increases by 7,500
D increases by 15,000 increases by 15,000
44. While preparing his draft financial statements, Nasir made two errors. These
caused his gross profit to be understated by $850 and his profit for the year to be over-
stated by $100. (1 mark)

Which two errors did Nasir make?

closing inventory depreciation charge

A $850 overstated $750 overstated
B $850 overstated $950 overstated
C $850 understated $750 understated
D $850 understated $950 understated
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45. The trial balance shown below failed to balance. (1 mark)

debit $ credit $
premises at cost 45,000
fittings at cost 18,000
provision for depreciation of fittings 3,000
bank loan 27,000
purchases 82,843
sales 166,596
general expenses 15,523
trade receivables 8,512
trade payables 5,220
wages 34,872
bank overdraft 1,026
cash in hand 314
opening inventory 5,577
capital 7,799
Which items have been entered onto the wrong side of the trial balance?
A. bank loan, general expenses, trade payables, cash in hand, capital
B. fittings at cost, provision for depreciation of fittings, general expenses, bank overdraft,
opening inventory
C. provision for depreciation of fittings, general expenses, trade receivables, cash in hand,
capital
D. purchases, sales, trade payables, cash in hand, opening inventory

46. Kamda bought a new motor vehicle for her business. She paid $28,000, which
included $120 for fuel and $260 for road tax. In her accounting records she debited the
purchases account and credited the bank account with $28,000. (1 mark)

Which of the following journal entries would correct her error?

debit $ credit $
A motor vehicles 28,000 purchases 28,000
B purchases 28,000 motor vehicles 28,000
C motor vehicles 27,620 purchases 28,000
motor vehicle expenses 380
D purchases 28,000 motor vehicles 27,620
motor vehicle expenses 380
47. In which order should accounting data be processed when using the double entry
system? (1 mark)
A. business documents, journals, ledgers, trial balance
B. journals, ledgers, business documents, trial balance
C. ledgers, business documents, trial balance, journals
D. trial balance, ledgers, business documents, journals

48. Leilani issues an invoice for goods sold on credit which have a full price of $3,500.
(1 mark)
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She offers a trade discount of 12%, and also a cash discount of 5% for prompt payment.

Which amount should she record in the sales journal?

A. $2,905
B. $2,926
C. $3,080
D. $3,500

49. How is the total from the sales journal recorded in the ledger at the end of the
month? (1 mark)
A. credited to customers’ personal accounts
B. credited to the sales account
C. debited to customers’ personal accounts
D. debited to the sales account

50. When writing up the sales journal and the sales returns journal, which business
documents are used to provide the information? (1 mark)

sales journal sales returns journal

A invoices issued credit notes issued
B invoices issued credit notes received
C invoices received credit notes issued
D invoices received credit notes received
51. In October, Elvin entered all the credit notes he received in the correct returns
journal. (1 mark)

How was the total of that journal recorded in the ledger at the end of the month?
A. credit purchases returns account
B. credit sales returns account
C. debit purchases returns account
D. debit sales returns account

52. Estel sold goods to a customer on credit. (1 mark)

Which one of the following is the first place where she recorded the invoice she issued?
A. general journal
B. general ledger
C. sales journal
D. sales ledger

END OF EXAMINATION