Double Entry Bookkeeping II (Y7C3)

	The following information is relevant for questions 1 and 2.
	On 1 May 20x9 Marshall’s cash book showed a cash balance of $224 and an overdraft of $336. During the week ended 6 May the following transactions took place.
		May 1	Sold $160 of goods to P Dixon on credit.
		May 1	Withdrew $50 of cash from the bank for business use.
		May 2	Purchased goods from A Clarke on credit for $380 less 15% trade discount.
		May 2	Repaid a debt of $120 owing to R Hill, taking advantage of a 10% cash discount. The payment was by cheque.
		May 3	Sold $45 of goods for cash.
		May 4	Sold $80 of goods to M Maguire on credit, offering a 12.5% discount if payment made within 7 days.
		May 4	Paid a telephone bill of $210 by cheque.
		May 4	Purchased $400 of goods on credit from D Daley.
		May 5	Received a cheque from H Larkin for $180. Larkin has taken advantage of a $20 cash discount offered to him.
		May 5	Sold $304 of goods to M Donald on credit.
		May 5	Purchased $135 of goods from Honour Co by cheque.
		May 6	Received a cheque from D Randle for $482
		May 6	Purchased $100 of goods on credit from G Perkins.
1	What is the total of the sales day book?
	A	$544
	B	$589
	C	$534
	D	$579
2	What is the total of the purchases day book?
	A	$880
	B	$823
	C	$1,033
	D	$958
3	Smith Co has the following transactions:
	1	Purchase of goods on credit from T Rader: $450
	2	Return of goods purchased on credit last month to T Rouble: $700
	What are the correct ledger entries to record these transactions?
	A	Dr Purchases Dr Purchase Returns Cr Cash Cr Trade Payables		$450 $700			$450 $700
	B	Dr Purchases Dr Trade Payables Cr Purchase Returns		$450 $700			$1,150
	C	Dr Purchases Dr Trade Payables Cr Purchase Returns		$450 $250			$700
	D	Dr Purchase Returns Dr Purchases Cr Trade Payables		$700 $450			$1,150
4	Mew Ling has the following transactions:
	1	Receipt of cash from R Singh in respect of an invoice for goods sold three weeks ago
	2	Receipt of cash from S Kalu for cash sales
	What are the ledger entries required to record the above transactions?
	A	Dr Cash, Cr Sales
	B	Dr Cash, Cr Sales, Cr Trade Receivables
	C	Dr Sales Cr Cash
	D	Dr Trade Receivables, Dr Sales, Cr Cash
5	How is the total of the sales day book recorded in the nominal ledger?
		Debit						Credit
	A	Receivables Ledger						Receivables Control Account
	B	Receivables Control Account						Receivables Ledger
	C	Sales						Receivables Control Account
	D	Receivables Control Account						Sales
6	Are the following statements about debit entries true or false?
	1	A debit entry in the cash book will increase an overdraft in the accounts.
	2	A debit entry in the cash book will increase a bank balance in the accounts.
	A	Both true
	B	Both false
	C	1 true and 2 false
	D	1 false and 2 true
7	An accountant has inserted all the relevant figures into the trade payables account, but has not yet balanced off the account.
	TRADE PAYABLES ACCOUNT
	Cash at bank				$ 100,750				Balance b/d Purchases		$ 250,225 325,010
	Assuming there are no other entries to be made, other than to balance off the account, what is the closing balance on the trade payables account?
	A	$474,485 DR
	B	$575,235 DR
	C	$474,485 CR
	D	$575,235 CR
8	You are given the following information:
	Receivables at 1 January 20x3 Receivables at 31 December 20x3 Total receipts during 20x3 (including cash sales of 5,000)									$10,000 $9,000 $85,000
	What are sales on credit during 20x3?
	A	$81,000
	B	$86,000
	C	$79,000
	D	$84,000
9	A business sells $100 worth of goods to a customer; the customer pays $50 in cash immediately and will pay the remaining $50 in 30 days’ time.
	What is the double entry to record the purchase in the customer’s accounting records?
	A	Debit cash $50, credit payables $50, credit purchases $50
	B	Debit payables $50, debit cash $50, credit purchases $100
	C	Debit purchases $100, credit payables $50, credit cash $50
	D	Debit purchases $100, credit cash $100
10	Tin Co purchases $250 worth of metal from Steel Co. Tin Co agrees to pay Steel Co in 60 days time.
	What is the double entry to record the purchase in Steel Co’s books?
	A	Debit sales $250, credit receivables $250
	B	Debit purchases $250, credit payables $250
	C	Debit receivables $250, credit sales $250
	D	Debit payables $250, credit purchases $250
11	The following totals appear in the day books for March 20x8.
	Sales day book Purchases day book Return inwards day book Returns outward day book					$ 40,000 20,000 2,000 4,000
	Opening and closing inventories are both $3,000. What is the gross profit for March 20x8?
	A	$22,000
	B	$24,000
	C	$20,000
	D	$18,000
12	William’s trial balance at 30 September 20x5 includes the following balances:
	Trade receivables $75,943 Receivables allowance $4,751
	How should these balances be reported in William’ statement of financial position as at 30 September 20x5?
	A	An asset of $71,192
	B	An asset of $75,943 and a liability of $4,751
	C	A liability of $71,192
	D	A liability of $75,943 and an asset of $4,751
13	A trial balance is made up of a list of debit balances and credit balances. Which of the following statements is correct?
	A	Every debit balance represents an expense.
	B	Assets are represented by debit balances.
	C	Liabilities are represented by debit balances.
	D	Income is included in the list of debit balances.
14	At 30 November 20x5 Jenny had a bank loan of $8,500 and a balance of $678 in hand in her bank account. How should these amounts be recorded on Jenny’s opening trial balance at 1 December 20x5?
	A	Debit $7,822
	B	Credit $7,822
	C	Credit $8,500 and Debit $678
	D	Debit $8,500 and Credit $678
15	Bert has extracted the following list of balances from his general ledger at 31 October 20x5:
	Sales Opening inventory Purchases Expenses Non-current assets (carrying amount) Receivables Payables Cash at bank Capital					$ 258,542 9,649 142,958 34,835 63,960 31,746 13,864 1,783 12,525
	What is the total of the debit balances in Bert’s trial balance at 31 October 20x5?
	A	$267,049
	B	$275,282
	C	$283,148
	D	$284,931
16	At 31 October 20x6 Roger’s trial balance included the following balances:
	Machinery at cost Accumulated depreciation Inventory Trade receivables Trade payables Bank overdraft Cash at bank					$ 12,890 8,950 5,754 11,745 7,830 1,675 150
	What is the value of Roger’s current assets at 31 October 20x6?
	A	$17,649
	B	$17,499
	C	$15,974
	D	$13,734
17	Which ONE of the following statements does NOT describe a way in which an effective accounting system facilitates the provision of useful accounting information?
	A	By requiring authorisation in line with organisational policies
	B	By processing and recording transactions in accordance with accounting rules
	C	By preventing transactions from being processed inaccurately
	D	By enabling transactions to be recorded as necessary to permit preparation of financial statements
18	Which of the following statements is/are TRUE or FALSE?
	1	Cash purchases are recorded in the purchases day book.
	2	The sales day books is used to keep a list of invoices received from suppliers.
	A	Both statements are TRUE
	B	Both statements are FALSE
	C	Statement 1 is TRUE and statement 2 is FALSE
	D	Statement 1 is FALSE and statement 2 is TRUE