Calculate the balance on the firm bank statement at March

Assignment Help Accounting Basics
Reference no: EM132656249

Questions -

(i) On 1 January a sole trader had capital of £25,000. During the year, he withdrew £23,000 for his own use and, at 31 December, he had capital of £31,000. If he did not introduce any new capital during the year, his net profit for the year was:

a) £23,000

b) £29,000

c) £17,000

d) £32,000

(ii) The following information relates to a sole trader.

Total of all assets at 1 June £2,300

Total of all liabilities at 1 June 2,500

Net profit earned during June 1,000

Capital introduced during June 5,000

Drawings during June 700

The sole trader's capital at 30 June was:

a) £5,300

b) £5,100

c) £5,600

d) £5,500

(iii) Carriage inwards is included in the cost of sales calculation because

a) It is a cost associated with the purchase of goods.

b) Carriage outwards is shown as an expense in the profit and loss account.

c) It should not be shown in the statement of financial position (balance sheet).

d) None of the above.

(iv) A sole trader incurred a loss of £10,000 during his most recent accounting period, yet had more money in his bank account at the end of the period than he had at the beginning of it. Which of the following, on its own, could explain this?

a) The introduction of £15,000 new capital during the period.

b) The purchase of Non-current assets during the period.

c) His customers taking longer than normal to pay the amounts they owe to him.

d) An increase in the amount of his Inventory over the course of the period.

(v) Tom set up a business on 1 January. He bought Non-current assets costing £53,000 and Inventory costing £6,600. He had financed these in advance of commencing business with a personal loan of £25,000 from his brother and a business loan from a bank. On 31 December of the same year his net assets totalled £37,200. His net profit for the year was £21,100.

Tom's drawings during the year were:

a) £8,900

b) £16,100

c) £18,500

d) £1,300

(vi) The going concern concept means that, when preparing accounts

a) unless there is specific information to the contrary, the firm for which the accounts are being prepared should be assumed to continue in operational existence for the foreseeable future at a level of activity not significantly less than the current level of activity.

b) profit should not be anticipated and losses should be provided for as soon as they are foreseen.

c) revenues and costs are recognised as they are earned or incurred, not as money is received or paid.

d) items should normally be accounted for in a manner consistent with the way in which they were accounted for in previous years.

(vii) The accruals concept

a) applies to assets and liabilities only.

b) is not a fundamental accounting concept.

c) applies to revenues, expenses, assets and liabilities.

d) applies to revenues and expenses only.

(viii) The Sales Daybook is used to record

a) the names, addresses, credit terms and other details regarding Accounts receivable.

b) money received from Accounts receivable.

c) invoices issued to customers in respect of goods sold on credit.

d) None of the above.

(ix) A firm which purchased five items on credit at a cost of £80 each, less 25% trade discount, is entitled to deduct a cash discount of 5% if it pays for them, in full, within 14 days of the invoice date. If the firm pays within the above two-week period, it will have to pay:

a) £285

b) £280

c) £260

d) None of the above.

(x) Which of the following is revenue expenditure?

a) The transfer of surplus funds from a bank current account to a bank deposit account.

b) The introduction of additional capital by a proprietor.

c) The cost of acquiring machinery for continuing use in the business.

d) The cost of advertising a mid-season sale.

(XI) 'Obsolescence' means

a) the decline in the book value of non-current assets as a result of them being depreciated using the straight-line method of depreciation.

b) the decline in the book value of non-current assets as a result of them being depreciated using the reducing balance method of depreciation.

c) the decline in the value of non-current assets as a result of them becoming outdated by technological improvement and invention.

d) None of the above.

(XII) A firm bought a non-current asset for £500,000. The asset has an estimated useful economic life of ten years and an estimated scrap value of £50,000. If the asset is depreciated at the rate of 20% per annum, using the reducing balance method, the depreciation charge, in relation to this asset alone, in the second year of its life will be:

a) £80,000

b) £45,000

c) £72,000

d) £90,000

(XIII) On 31 March the balance brought down on a firm's bank account in its ledger was £3,600, credit. At the same date, outstanding cheques amounted to £1,400 and outstanding lodgements amounted to £2,000. A cheque for £500, received from a debtor, was subsequently dishonoured. The receipt of the cheque had been correctly recorded but no entry has yet been made in the accounting records in respect of it being dishonoured. On the basis of the above information, the balance on the firm's bank statement at 31 March was:

a) £4,200 overdrawn.

b) £3,500 credit.

c) £4,700 overdrawn.

d) £3,700 credit.

(XIV) In the Statement of Financial Position (balance sheet) of a sole trader, prepayments should be shown as

a) part of current assets.

b) a deduction from current liabilities.

c) a deduction from capital.

d) part of accounts payable.

(XV) If a £500 salaries accrual was inadvertently treated as a prepayment, net profit would be

a) overstated by £500.

b) overstated by £1,000.

c) understated by £1,000.

d) understated by £500.

(XVI) If an accumulated provision for depreciation account is in use then the entries for the year's depreciation would be:

a) Credit Provision for Depreciation Account, debit Profit and Loss Account

b) Credit Asset Account, debit Provision for Depreciation Account

c) Debit Asset Account, credit Profit and Loss Account

d) Credit Profit and Loss Account, debit Provision for Depreciation Account

(XVII) Cash, accounts receivables, inventories, deposits, prepaid expenses

a) are current assets on the balance sheet

b) are liabilities on the balance sheet

c) are classifications of stockholders' equity

d) None of the above

(XVIII) Given opening capital of £16,500, closing capital as £11,350 and drawings were £3,300, then:

a) Loss for the year was £8,450

b) Loss for the year was £1,850

c) Profit for the year was £1,850

d) Profit for the year was £8,450

(XIX) Which one of the following would be classified as a current asset for a furniture retailer?

a) Property

b) Furniture held for resale

c) Bank overdraft

d) Shop fittings

(XX) The debit side of a company's trial balance totals $800 more than the credit side. Which one of the following errors would fully account for the difference?

a) $400 paid for plant maintenance has been correctly entered in the cash book and credited to the plant asset account.

b) Discount received $400 has been debited to discount allowed account

c) A receipt of $800 for commission receivable has been omitted from the records

d) The petty cash balance of $800 has been omitted from the trial balance.

Reference no: EM132656249

Questions Cloud

What togo lease liability at the end is closest to : What Togo's lease liability at the end of 20x2 is closest to? At the beginning of 20x1, Togo, Inc. entered into a finance lease to acquire equipment.
What togo interest expense for the year ended is : What Togo's interest expense for the year ended 20x1 is closest to? At the beginning of 20x1, Togo, Inc. entered into a finance lease to acquire equipment.
What are your thoughts relating to the consistency : What are your thoughts relating to the consistency in providing Miranda Warnings helps the law enforcement officer or investigator during the process of making.
Compute the depreciation expense and net book value : Compute the depreciation expense and net book value of the machinery for the years 2017, 2018 and 2019 using Double declining balance method.
Calculate the balance on the firm bank statement at March : On 31 March the balance brought down on a firm's bank account in its ledger was £3,600, credit. Calculate the balance on the firm bank statement at March
Identify and compute the cost of the machine : Identify and compute the cost of the machine. Explain your reasoning. New parts to replace those damaged in unloading 2,000
Show the average variable cost function : Determine the level of production when the average variable cost (AVC) is minimum! (weight 10). Show the Average Variable Cost function
Key forces driving globalization : The Hofstede framework and its 5 main characteristics of culture - standard patterns of internationalization that a firm experiences
Produce covariance and correlation matrix : Produce covariance and correlation matrix to support the scatter diagram.A bar or pie chart showing the number of customer purchases attributable to the method

Reviews

Write a Review

Accounting Basics Questions & Answers

  Compute the total overhead variance

Standard hours allowed for the work done is 20,400 hours. The predetermined overhead rate is $7 per direct labor hour. Compute the total overhead variance

  Assuming that wilcox elects to use the carry forward

rowen corporation reported the following results for its first three years of operation 2010 income before income

  Your younger sister jennifer will start collegein

your younger sister jennifer will start collegein fiveyears. she has just informed your parents that she wants to go

  What steps are necessary to secure a wi-fi protected access

What are the risks of transmitting data over an unsecured Wi-Fi network? What steps are necessary to secure a Wi-Fi Protected Access network?

  Computing loss and basis of new machine

Maude exchanges a business machine for a new business machine. The adjusted basis of the old machine is $70,000 and the fair market value of the new machine is $62,000. The recognized gain or loss and the basis of the new machine is:

  Equity transactions presented below is information related

equity transactions. presented below is information related to wyrick company1. the company is granted a charter that

  What is the total equity in the given problem

The company paid dividends of $378 with a net working capital of $100. Current liabilities are $520 and the net fixed assets are $18,550. What is the total equity?

  A contracting company has been awarded a contract for

a contracting company has been awarded a contract for reshaping and leveling 10 miles of a gravel road. for a 2-mile

  Calculate the amount of bond discount or premium

The bonds which were issued at 99, pay interest on January 1 and June 1. Use this information to calculate the amount of bond discount or premium

  If fixed costs are 500000 and the unit contribution margin

1. the debit to factory overhead for the cost of indirect materials is obtained from the summary of the materials

  Total amount on goodwill

The non controlling intrest shares of Float Corp. are not actively traded. What is the total amount on goodwill recognized at the date of acquisition?

  What better choice for adults than pizza

What better choice for adults than pizza? What will fill this need and differentiate "BUZZ-TIME PIZZA" is the caffeinated tomato sauce.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd