1) Determine whether the statement is True or False.

1. An example of a credit purchase would be when the business pays the supplier
on the delivery of the goods.

2. An example of a cash sale would be when the business delivers goods to the
customer and is paid immediately.

3. Sums of money paid to a supplier in exchange for the receipt of goods are called
'payments'.
4. Goods delivered to a customer but then returned to the supplier would be sales
returns for the supplier.

2) Which TWO of the following documents are sent by a business to their

customer?

A. Purchase order

B. Quotation.

C. Remittance advice

D. Sales invoice

3) Tariq took delivery of goods one month ago and is about to pay the amount
owed to the supplier.
Which of the following business documents would Tariq send the supplier with
the payment?

A. Debit note.

B. Purchase order

C. Statement

D. Remittance advice
 4) Due to a pricing error, a business charges a customer $750 for goods that
should have been invoiced at $570.
Which of the following documents could be raised to correct this?

A. A credit note

B. A debit note

C. A direct debit

D. A sales invoice

5) Which TWO of the following statements describe the purpose of a

goods received note?

A. To provide internal evidence of the items delivered by a supplier

B. To ensure that the business only pays for goods that have been delivered
C. To provide written confirmation from the supplier of goods that have been
delivered

D. To indicate how much is owed to the supplier for the goods that have been
delivered

6) Silvia has a business selling handmade children’s toys online. Some of her
customers, such as Michal, are well established retailers and Silvia gives these
customers one month’s credit. Silvia records sales on a sales module, which is
integrated with the accounting system so that details of sales and trade receivables are
automatically posted to the ledger accounts in the accounting system.

Silvia received an order from Michal. Silvia checked the inventory and confirmed
acceptance of the order by email. A delivery note was produced showing Michal’s
address for the delivery, along with the quantity of each item sent. Following the
delivery, an invoice was produced by the system, and sent to Michal.
At what stage would the sale be reflected in the Sales account and Trade
receivable account in the general ledger?
A. When the sales order was received from Michal

B. When Silvia confirmed acceptance of the order

C. When the delivery note was issued

D. When the invoice was produced

7) An invoice is best defined by which one of the following statements?

- An invoice is raised by a business and confirms only the amount due to be paid for
goods and services provided.

- An invoice is raised by business and issued to a supplier as recognition of goods

and services received from that supplier.

- An invoice is raised by a business and issued to a customer to confirm amounts not

yet paid.
- An invoice is raised by a business and issued to a customer to request payment for
goods and services provided.

8) Which one of the following statements best describes the purpose of a goods
dispatched note (delivery note)?

A. It is issued by a customer returning faulty goods to their supplier.

B. It is issued by a customer to their supplier and specifies the quantity and type of
goods they require to be dispatched.

C. It is issued by a supplier to their customer and specifies the quantity and type of
goods delivered to that customer.

D. It is issued by a supplier to their customer and specifies what goods will be provided
to them at a specified future date.
9) Which of the following can the accounting equation can be rewritten as?

Assets + profit- drawings- liabilities= closing capital

Assets- liabilities- drawings= opening capital + profit

Assets- liabilities- opening capital + drawings= profit

Assets- profit- drawings= closing capital- liabilities

10 ) Which one of the following formulae may be used to calculate the profit of a
business?

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 Closing capital – drawings + capital introduced – opening capital

11) 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

12) 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?

DEBIT CREDIT

$ $

A. Inventory account 800

Purchases account 800

B. Drawings account 800

Purchases account 800

C. Sales account 1,600

Drawings account 1,600

D. Drawings account 800

Sales account 800

13) 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

14) 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

15) 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

16) 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.

17) You are given the following information:

Receivables at 1 January 20X3 = $9,000

Total receipts during 20X3 (including cash sales of $5,000) $10,000

Receivables at 31 dec 20x3 = $85,000

What are sales on credit during 20X3?

A $81,000

B $86,000
C $79,000

D $84,000

18) Bert has extracted the following list of balances from his general ledger at 31
October 20X5:

Sales 258,542

Opening inventory 9,649

Purchases 142,958
Expenses 34,835
Non-current assets (carrying amount) 63,960

Receivables 31,746

Payables 13,864

Cash at bank 1,783

Capital 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

19) Which of the following statements is/are TRUE or FALSE?

1 Cash purchases are recorded in the purchases day book.

2 The sales day book 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

20) Which of the following is not a feature of computerized accounting systems?

A. Allows back-up of data in the event of lost files

B. Integrated with other management systems to observe transaction trails

C. Provides real-time management reports

D. Multiple users can use the accounting software remotely

21) Which of the following statements is a benefit to businesses adopting

computerized accounting systems to record financial information?

A. lower total cost of implementation

B. eradicates threats to security and theft

C. information recorded is likely more accurate

D. Computerized systems are more user-friendly

22) State whether the following statements regarding an accounting system are
TRUE or FALSE.
- An accounting system allows management to monitor their spending in areas such as
capital expenditure and payment of utility bills

- An accounting system allows management to value their business entity because it

records assets and liabilities