Multiple-choice questions – Set 6 (101 to 120)
101 Accounts used for regular banking and withdrawals by cheque
are known as:
(A) deposit accounts
(B) savings accounts
(C) current account
(D) revolving accounts.
102 A regular payment made by your bank, for which you have given
authority, is:
(A) a credit transfer
(B) a standing order
(C) an unpresented cheque
(D) a dishonoured cheque.
103 A statement of affairs is similar to:
(A) a bank statement
(B) an appropriation account
(C) a statement of financial position
(D) a statement of account.
104 Which of the following are errors of principle?
(i) Rent entered in buildings account
(ii) Purchases of $150 completely omitted from the books
(iii) Sale of machinery of $500 entered in sales account
(iv) Cheque payment to R. Kago entered only in the cash book
(A) (ii) and (iii)
(B) (iii) and (iv)
(C) (i) and (ii)
(D) (i) and (iii)
105 Superannuation contributions and income tax should be:
(A) added to the gross pay to give net pay
(B) deducted from gross pay to give the amount payable to an
employee
(C) deducted from net pay
(D) added to net pay to give the amount payable to an
employee.
106 Pay for piece work is related to:
(A) the amount of work performed
(B) net pay
(C) the time taken
(D) holiday pay.
107 What is the number of units in inventory on 31 March?
(A) 57
(B) 35
(C) 30
(D) 180
108 At 1 June,
(A) LIFO has the lowest stock value and highest profits.
(B) FIFO has the highest stock value and highest profits.
(C) AVCO has the highest stock value and lowest profits.
(D) LIFO has the lowest stock value and lowest profits.
109 How much should the goods bought on April 1 be sold for, to
make a profit of $2,000?
(A) $2,000
(B) $6,000
(C) $8,000
(D) $10,000
110 Working capital is not the same as:
(A) net current assets
(B) the difference between current assets and current liabilities
(C) the measure of the ability of a business to meet current
obligations
(D) cash in hand plus money in the bank.
111 The following information was extracted from the books of a
business at their year end 31 March.
The acid test ratio for the business at the year end is:
(A) 2.5 : 1
(B) 4.0 : 1
(C) 3.0 : 1
(D) 6.0 : 1
112 The book-keeping entries for the creation of a Provision for
doubtful debts is:
[A] debit Accounts receivable and credit Provision for doubtful
debts.
[B] debit Profit and loss account and credit Provision for
doubtful debts.
[C] debit Provision for doubtful debts and credit Profit and loss
account.
[D] debit Provision for doubtful debts and credit Bad debts
account.
113 The credit note below shows that:
(A) Hunters’ Ltd. overstated a sale by $18.
(B) Hunters’ Ltd. deducted a 2% discount from a previous sale.
(C) T. Work-Horse is returning goods valued $18.
(D) T. Work-Horse got a cash discount of 2%.
114 In Joe’s cash book the balance in the bank account was $1,022,
while the balance shown on the bank statement was $1,210.
Cheques not yet presented were $165 and $78 but bank
charges of $55 had been included in the bank statement but not
entered in the cash book. The real balance in the cash book
should be:
(A) $1,453
(B) $967
(C) $1.077
(D) $1,508
115 Which statement is true?
(A) Taxes and NIS contributions are voluntary deductions.
(B) Union dues and loan payments are statutory deductions.
(C) Taxes and NIS contributions are statutory deductions.
(D) Union and credit union dues are statutory deductions.
116 An employee’s take home pay is calculated from
(A) gross tax minus net pay
(B) net pay less total deductions
(C) overtime pay add net pay
(D) gross pay less total deductions.
117 Subscriptions received by a club in advance are:
(A) shown in the statement of financial position as an asset
(B) when preparing an income and expenditure account
included in the ‘subscriptions’
(C) shown in the statement of financial position as a liability
(D) not included in the receipts and payment account.
118 An expense account with a debit balance at the beginning of the
period indicates that:
(A) the amount is a prepayment
(B) the amount is owing by the business
(C) it is the expense for the current period
(D) it is a cash payment.
119 Debentures issued by a company are:
(A) the same as preference shares
(B) certificates showing loans made to a company
(C) shares issued which cannot be paid back to the
shareholders
(D) the same as ordinary shares.
120 Which of the following statements is true?
(A) Returns inwards is the same as purchases returns.
(B) Carriage inwards is the transportation of purchases.
(C) Returns outwards is the transportation of sales.
(D) Carriage outwards is the goods returned to suppliers.