21. (2 point)

Given the following, what is the amount of Capital? Assets: Premises 20,000; Stock 8,500; Cash 100. Liabilities: Creditors 3,000; Loan from A Adams 4,000

A. 21,100

B. 21,600

C. 32,400

D. 21,400

E. None of the above

22. (2 point)

Which of the following is correct?

A. Profit does not alter capital

B. Profit reduces capital

C. Capital can only come from profit

D. Profit increases capital

E. None of the above

23. (2 point)

Which of the following are correct?

(i) Received commission by cheque; Dr. Bank and Cr. Commission received

(ii) Paid rates by cash; Dr. Rates and Cr. Cash

(iii) Paid motor expenses by cheque; Dr. Motor expenses and Cr. Bank

(iv) Received refund of insurance by cheque; Dr. Insurance and Cr. Bank

A. (i) and (ii) only

B. (i), (ii) and (iii) only

C. (ii), (iii) and (iv) only

D. (i), (ii) and (iv) only

E. None of the above

24. (2 point)

Of the following, which are incorrect?

(i) Sold van for cash; Dr. Cash Sales and Cr. Commission received

(ii) Bought stationery by cheque; Dr. Stationery and Cr. Bank

(iii) Took cash out of business for private use; Dr. Cash and Cr. Drawings

(iv) Paid general expenses by cheque; Dr. General expenses and Cr. Bank

A. (ii) and (iv) only

B. (i) and (ii) only

C. (i) and (iii) only

D. (ii) and (iii) only

E. None of the above

25. (2 point)

What is the balance on the on the Cash account of C Wine on 31 May 2015?

On May 1, Cash Sales is 205; May 14, Cash Sales is 360; May 17, Cash payment to Creditors is 300; May 28, Rent payment is 50; May 30, Cash Sales is 180

A. A credit balance of 395

B. A debit balance of 380

C. A debit balance of 395

D. There is a nil balance on the account

E. None of the above

26. (2 point)

What would have been the balance on the Cash account of C Wine on 19 May 2015?

On May 1, Cash Sales is 205; May 14, Cash Sales is 360; May 17, Cash payment to Creditors is 300; May 28, Rent payment is 50; May 30, Cash Sales is 180

A. A debit balance of 265

B. A credit balance of 95

C. A credit balance of 445

D. A credit balance of 265

E. None of the above

27. (2 point)

Which of the following best describes a trial balance?

A. Shows the financial position of a business

B. It is a special account

C. Shows all the entries in the books

D. It is a list of balances on the books

E. None of the above

28. (2 point)

Is it true that the trial balance totals should agree?

A. No, there are sometimes good reasons why they differ

B. Yes, except where the trial balance is extracted at the year end

C. Yes, always

D. No, because it is not a balance sheet

E. None of the above

29. (2 point)

Gross prot is

A. Excess of sales over cost of goods sold

B. Sales less Purchases

C. Cost of goods sold + Opening stock

D. Net prot less expenses of the period.

E. None of the above

30. (2 point)

Net prot is calculated in the

A. Trading account

B. Prot and loss account

C. Trial balance

D. Balance sheet.

E. None of the above

31. (2 point)

To nd the value of closing stock at the end of a period we

A. do this by stocktaking

B. look in the stock account

C. deduct opening stock from cost of goods sold

D. deduct cost of goods sold from sales

E. None of the above

32. (2 point)

The credit entry for net prot is on the credit side of

A. The trading account

B. The prot and loss account

C. The drawings account

D. The capital account.

E. None of the above

33. (2 point)

Which of these best describes a balance sheet?

A. An account proving the books balance

B. A record of closing entries

C. A listing of balances

D. A statement of assets

E. None of the above

34. (2 point)

The descending order in which current assets should be shown in the balance sheet is

A. Stock, Debtors, Bank, Cash

B. Cash, Bank, Debtors, Stock

C. Debtors, Stock, Bank, Cash

D. Stock, Debtors, Cash, Bank

E. None of the above

35. (2 point)

Which of these best describes xed assets?

A. Are bought to be used in the business

B. Are items which will not wear out quickly

C. Are expensive items bought for the business

D. Are of long life and are not bought specically for resale.

E. None of the above

36. (2 point)

Carriage inwards is charged to the trading account because

*A. It is an expense connected with buying goods

B. It is an expense connected with buying goods

C. It is not part of motor expenses

D. Carriage outwards goes in the prot and loss account.

E. None of the above

37. (2 point)

Given gures showing: Sales 8,200; Opening stock 1,300; Closing stock 900; Purchases 6,400; Carriage inwards 200, the cost of goods sold gure is

A. 6,800

B. 6,200

C. 7,000

D. Another gure.

E. None of the above

38. (2 point)

The costs of putting goods into a saleable condition should be charged to

A. Trading account

B. Prot and loss account

C. Balance sheet

D. Revenue account

E. None of these.

39. (2 point)

Suppliers personal accounts are found in the

A. Nominal ledger

B. General ledger

C. Purchases ledger

D. Sales ledger.

E. None of the above

40. (2 point)

The Sales Day Book is best described as

A. Part of the double entry system

B. Containing customers accounts

C. Containing real accounts

D. A list of credit sales.

E. None of the above