Double entry bookkeeping I (Y7C3)

1	Which one of the following can the accounting equation can be rewritten as?
	A	Assets + profit – drawings – liabilities = closing capital
	B	Assets – liabilities – drawings = opening capital + profit
	C	Assets – liabilities – opening capital + drawings = profit
	D	Assets – profit – drawings = closing – liabilities
2	A trader’s net profit for the year may be computed by using which of the following formulae?
	A	Opening capital + drawings – capital introduced – closing capital
	B	Closing capital + drawings – capital introduced – opening capital
	C	Opening capital – drawings + capital introduced – closing capital
	D	Opening capital – drawings – capital introduced – closing capital
3	The profit earned by a business in 20x7 was $72,500. The proprietor injected new capital of $8,000 during the year and withdrew goods for his private use which had cost $2,200. If net assets at the beginning of 20x7 were $101,700, what were the closing net assets?
	A	$35,000
	B	$39,400
	C	$168,400
	D	$180,000
4	The profit made by a business in 20x7 was $35,400. The proprietor injected new capital of $10,200 during the year and withdrew a monthly salary of $500. If net assets at the end of 20x7 were $95,100, what was the proprietor’s capital at the beginning of the year?
	A	$50,000
	B	$55,500
	C	$63,900
	D	$134,700
5	A sole trader took some goods costing $800 from inventory for his own use. The normal selling price of the goods is $1,600. Which of the following journal entries would correctly record this?
			Dr $		Cr $
	A	Inventory account Purchases account	800		800
	B	Drawings account Purchases account	800		800
	C	Sales account Drawings account	1,600		1,600
	D	Drawings account Sales account	800		800
6	A business can make a profit and yet have a reduction in its bank balance. Which ONE of the following might cause this to happen?
	A	The sale of non-current assets at a loss
	B	The charging of depreciation in the statement of profit or loss
	C	The lengthening of the period of credit given to customers
	D	The lengthening of the period of credit taken from suppliers
7	The net assets of Altese, a trader, at 1 January 20x2 amounted to $128,000. During the year to 31 December 20x2 Altese introduced a further $50,000 of capital and made drawings of $48,000. At 31 December 20x2 Altese’s net assets totalled $184,000. What is Altese’s total profit or loss for the year ended 31 December 20x2?
	A	$54,000 profit
	B	$54,000 loss
	C	$42,000 loss
	D	$58,000 profit
8	Jones Co has the following transactions:
	1	Payment of $400 to J Bloggs for a cash purchase
	2	Payment of $250 to J Doe in respect of an invoice for goods purchased last month
	What are the correct ledger entries to record these transactions?
	A	Dr  Cash Cr  Purchases	$650					$650
	B	Dr  Purchases Cr  Cash	$650					$650
	C	Dr   Purchases Cr  Trade Payables Cr  Cash	$400 $250					$650
	D	Dr  Cash Cr  Trade Payables Cr  Purchases	$650					$250 $400
9	T Tallon had the following transactions:
	1	Sale of goods on credit fo $150 to F Rogit
	2	Return of goods from B Bledigg originally sold for $300 in cash to B Blendigg
	What are the correct ledger entries to record these transactions?
	A	Dr Receivables Dr Sales Returns Cr Sales Cr Cash	$150 $300					$150 $300
	B	Dr Sales Dr Cash Cr Receivables Cr Sales Returns	$150 $300					$150 $300
	C	Dr Receivables Cr Sales Returns Cr Sales Returns	$450					$150 $300
	D	Dr Sales Returns Dr Sales Cr Cash	$300 $150					$450
10	Which of the following documents should accompany a return of goods to a supplier?
	A	Debit note
	B	Remittance advice
	C	Purchase invoice
	D	Credit note
11	Which of the following are books of prime entry?
	1	Sales day book
	2	Cash book
	3	Journal
	4	Purchase ledger
	A	1 and 2 only
	B	1, 2 and 3 only
	C	1 only
	D	All of them
12	In which book of prime entry will a business record debit notes in respect of goods which have been sent back to suppliers?
	A	The sales returns day book
	B	The cash book
	C	The purchase returns day book
	D	The purchase day book
13	A company’s motor vehicles at cost account at 30 June 20x6 is as follows:
	MOTOR VEHICLES – COST
	Balance b/d Additions			$ 150,500 120,950		Disposal Balance c/d			$ 85,000 186,450
				271,450					271,450
	What opening balance should be included in the following period’s trial balance for motor vehicles – cost at 1 July 20x6?
	A	$271,450 DR
	B	$271,450 CR
	C	$186,450 CR
	D	$186,450 DR
14	A company’s trade payables account at 30 September 20x1 is as follows:
	TRADE PAYABLES ACCOUNT
	Cash at bank Balance c/d			$ 21,600 11,900			Balance b/d Purchases		$ 14,000 19,500
				33,500					33,500
	What was the balance for trade payables in the trial balance at 1 October 20x0?
	A	$14,000 DR
	B	$14,000 CR
	C	$11,900 DR
	D	$11,900 CR
15	Which of the following would be recorded in the sales day book?
	A	Discount allowed
	B	Sales invoices
	C	Credit notes received
	D	Trade discounts
16	Which of the following statement is true?
	A	A debit records an increase in liabilities
	B	A debit records a decrease in assets
	C	A credit records an increase in liabilities
	D	A credit records an decrease in capital
17	How is the total of the purchases day book posted to the nominal ledger?
	A	Debit purchases, Credit cash
	B	Debit payables control, Credit purchases
	C	Debit cash, Credit purchases
	D	Debit purchases, Credit payables control
18	Which one of the following statements about an imprest system of petty cash is correct?
	A	An imprest system for petty cash controls small cash expenditures because a fixed amount is paid into petty cash at the beginning of each period.
	B	The imprest system provides a control over petty cash spending because the amount of cash held in petty cash at any time must be equal to the value of the petty cash vouchers or receipts for spending.
	C	An imprest system for petty cash can operate without the need for petty cash vouchers or receipts for spending.
	D	An imprest system for petty cash helps with management of small cash expenditures and reduces the risk of fraud.
19	Which one of the following provides evidence that an item of expenditure on petty cash has been approved or authorised?
	A	Petty cash voucher
	B	Records of the transaction in the petty cash book
	C	Receipts for the expense
	D	Transfer of cash from the bank account into petty cash