1. The capital account of a sole trader was credited with $5000. Which of these items would not give rise to such a credit?

a. The business earned a profit of $5000

b. The owner brought in a private car valued at $5000 for business use

c. The owner introduced %5000 new capital

d. The owner paid an outstanding private gambling debt of $5000 from the business bank account

2.If total liabilities are $120,000, total assets are $280 000 and total share capital is $140,000, the amount of retained earnings is:

a. $20,000

b. $110,000

c.$140,000

d.$160,000

3.Sampras Company purchased a machine for $30,000 on 1 Jaunuary 2010 with an estimated life of 5 years and a residual value of zero. The straight-line method of depreciation is used. What is the carrying value of the machine on the 31 December 2011 in the balance sheet of sampras company?

a. $30,000

b. $24,000

c.$18,000

d.$12,000

4.The wages expense account for Gerry Mander, political consultants, showed the following entries for 2011. What was the portion of wages that was treated as an expense in 2010 but was not paid untill 2011?

Date - particulars -Debit -Credit -Bal.

-2011

-Jan 1 -Accrued expenses -X -1,200 1200 Cr

-year -various cash payments -51,000 -X 49,800 Dr

-Dec 31 -Accrued expenses -2,200 -X 52,000 Dr

a. $49,800

b. $51,000

c. $1,200

d. $2,200

5.If an adjustment for depreciation is omitted from the financial reports the affect is:

Select one:

a. Assets are understated; profit is understated

b. Assets are overstated; profit is understated

c. Assets are understated; profit is overstated

d. Assets are overstated; profit is overstated

6.At year-end it was forgotten to accrue an income item. This will result in an:

Select one:

a. Understatement of assets and an overstatement of profit and equity

b. Overstatement of liabilities and an understatement of profit and equity

c. Overstatement of assets, profit, and equity

d. Understatement of assets, profit, and equity

7.Tan Traders received a $750 advance payment from a customer for work to be carried out in the next accounting period. The accounting entry to initially record the $750 is:

Select one:

a. Debit unearned income $750; credit bank $750

b. Debit bank $750; credit unearned income $750

c. Debit bank $750; credit creditor $750

d. Debit income earned %750; credit bank $750