Questions and Answers of Mastering Accounting Skills

Every business that sells goods on credit wishes to avoid bad debts. You are required to:(a) Describe the steps you would take before a new customer is allowed credit.(b) State how you would deal
(a) What are bad debts? Why is it necessary to write off bad debts? (b) From the information given below, write up the bad debts account in the books of Jean Wilder for the year 20-7. Debts written
Paul Simpson is a sole trader. During the year ended 31 March 20-8 the following customers were declared bankrupt:You are required to write up the bad debts account in the ledger of Paul Simpson for
Nigel Barker runs a small business. He decided to make a provision for bad debts equal to 5 per cent of the total debtors outstanding at the end of each financial year.You are required to:(a) Prepare
H. Crawford had a business that adjusted its provision for bad debts at the end of the financial year, at a given percentage of the total debtors. The percentage varied each year, depending on the
On 20 September 20-7, Brian Fox's debtors totalled £12,000. He decided to write off the following as bad debts:He further decided to make a provision for doubtful debts of 10 per cent on the
(a) What are the differences between bad debts written off and provision for bad debts?(b) Give two reasons for creating a provision for bad debts.(c) What is meant by bad debts recovered? How are
From the following information, prepare a sales ledger control account for the month of May, showing clearly the balance carried forward at 31 May 20-7. May 1 Sales ledger balances 4,760 Sales day
From the following information, prepare a purchase ledger control account for the month of May, showing clearly the balance carried forward at 31 May 20-7. May 1 Purchase ledger balances Purchases
From the following information, prepare a sales ledger control account for the month of June, showing clearly the balance carried forward at 30 June 20-7. June 1 Sales ledger balances Sales day book
From the following information, prepare a purchase ledger control account for the month of June, showing clearly the balance carried forward at 30 June 20-7. June 1 Purchase ledger balances Purchases
Khalid Shah extracted the following balances from his books for the month of January 20-7.You are required to:(a) Prepare a sales ledger control account for the month of January, clearly showing the
The following information relates to the sales ledger control account for ledger number 2, K to R.(a) Write up the sales ledger control account from the information given above.(b) Comment on the
James Grant runs a small mail order business. On 1 January 20-7 there was£500 owing for rent in respect of the business premises. During the year the following payments were made for rent, by
The following information refers to the rates account in the ledger of K.Parker. On 1 January 20-7 the rates prepaid were £525. During the year the following payments were made for rates, by
The following information is available in respect of the electricity account in the ledger of M. Summers. On 1 July 20-6 there was an unpaid bill for electricity of £287. During the year the
The following information refers to the packing materials account in the ledger of David Dyson:You are required to write up and balance the packing materials account for the year ended 31 May 20-5,
During the year ended 31 December 20-4, Nigel Giffard paid the following amounts for rent by cheque.You are required to:(a) Enter the above information in the rent account of Nigel Giffard.(b)
Tony Simms’ trading account shows net sales of £40,850 and a gross profit of £20,620.You are required to enter a correct formula and calculate his gross profit ratio.
Ruth Sampson's final accounts show a net profit of £10,158 and net sales of £38,726. Two of the expenses in the profit and loss account are: rent and rates £6,250 and salaries £10,430. You are
John King’s final accounts show a gross profit of £50,126, a net profit of£20,852 and net sales of £84,734. Two of the expenses in the profit and loss account are advertising £2,208, and heat
Use the figures in the trading, profit and loss account and balance sheet you prepared for Richard Martin in Assignment
on page 281, enter correct figures and formulae, and calculate the following accounting ratios:(i) | Gross profit ratio.(ii) | Rate of stock turnover.(iii) Net profit ratio.(iv) Expense ratio —
Use the figures in the trading, profit and loss account and balance sheet you prepared for Kate Devlin in Assignment
on page 283, enter correct figures and formulae, and calculate the following accounting ratios:(i) | Gross profit ratio.(ii) Rate of stock turnover.(iii) Net profit ratio.(iv) Expense ratio — rent
Use the figures in the trading, profit and loss account and balance sheet you prepared for Helen Robinson in Assignment
on page 285, enter correct figures and formulae, and calculate the following accounting ratios:(i) | Gross profit ratio.(ii) Rate of stock turnover.(iii) Net profit ratio.(iv) Return on capital

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