Accounting for IGCSE & O level - Accounting Procedures (Section 1)
1
How would the error, where a sales commission of $140 was incorrectly posted as $400, impact the draft profit and require a correction?
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(B)
Profit is understated by $260; Debit Suspense, Credit Sales Commission.
2
Which of the following would be found on the balance sheet?
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A
D
3
Which of the following are essential for a valid invoice?
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A
B
C
4
What is the accounting treatment for a cash payment to a supplier?
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(A)
Debit Trade Payables, Credit Cash
5
Which of the following transactions would increase the balance in a purchases ledger control account?
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(A)
A credit purchase
6
What happens in the purchase ledger if a supplier issues a refund?
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(B)
Trade payables decrease
7
What is the impact of recording a credit purchase on the purchases ledger control account?
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(B)
The balance increases.
8
Which document is used to notify a customer that their account has been debited?
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(C)
Debit note
9
The balance on the sales ledger control account should equal the sum of:
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(B)
The sum of balances on the individual trade receivable accounts in the sales ledger
10
A business issues a credit note. What is the impact on its records?
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(A)
Decrease the customer's account.
11
Which of the following is the effect of a dishonored cheque on the customer's account in the sales ledger?
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(A)
The customer's balance increases.
12
Which depreciation method is often used for assets that provide consistent benefits over time?
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(B)
Straight-Line
13
What accounting principle is most directly related to the concept of depreciation?
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(B)
Matching Principle
14
What document is issued to correct an error on a purchase invoice?
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(C)
Debit Note
15
What is the impact on the purchases ledger when a company pays a supplier?
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(C)
The balance in the supplier’s account decreases.
16
How would you classify 'Accumulated Depreciation' on the balance sheet?
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(C)
Contra-asset
17
What happens if a debit is recorded as a credit?
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(D)
The trial balance will not balance.
18
Which is a true statement about capital receipts?
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(B)
Capital receipts only affect the financial position of the business.
19
During disposal, which accounts would normally be debited to close out the asset?
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A
D
20
Control accounts are used to:
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(A)
Check the arithmetical accuracy of the sales ledger and the purchase ledger.
21
When an asset is fully depreciated, its net book value equals:
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(B)
Its salvage value.
22
What is the main purpose of depreciation in financial accounting?
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(B)
To accurately report the decline in value of an asset over time.
23
Repairs \$200 were debited to the premises account. How will it impact draft profit?
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(C)
Profit was understated by \$200
24
What type of error occurred when a payment for electricity expenses was recorded as a profit?
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(A)
Error of Principle
25
What is the effect of a customer returning goods for which they paid cash?
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(C)
Debit cash, Credit sales returns.
26
Which of the following would increase the debit side of a sales ledger control account?
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(A)
Credit sales
27
In the case of compensating error, which of the following statement is true?
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A
D
28
What is the formula for calculating depreciation using the straight-line method?
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(A)
(Cost - Residual Value) / Useful Life
29
What happens in the sales ledger when a credit note is issued to a customer?
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(B)
The customer's account is credited.
30
Which of the following statements is correct regarding a Sales Ledger Control Account?
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(C)
It provides a summary of the total amount owed by all credit customers.
31
Which of the following statements regarding the Sales Ledger Control Account are correct?
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A
C
32
Which journal is used for recording credit purchases?
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(B)
Purchases Journal
33
The correct impact of recording an annual depreciation charge of $4,000 that was overlooked is:
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(C)
Decrease in Profits
34
Drawings of \$3000 were not recorded. How will it impact draft profit in the below scenario?
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(A)
No impact
35
The error means that the balance include due trade payables accounts for \$449 and the purchases account have \$400 more than they should have from \$14,449 in the sorted balance. To select the error both balances had to be reduced by \$449.
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A
C
36
Which statement describes a debit balance in the purchase ledger control account?
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(B)
The business owes the supplier money.
37
A company sells goods for cash. What is the accounting entry?
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(B)
Debit Cash, Credit Sales
38
Which document should be issued by a business to notify a customer that their account is being credited?
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(B)
Credit note
39
What is capital expenditure?
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(B)
It is the cost of buying or acquiring non-current assets.
40
If an asset is revalued downwards, what happens to the Accumulated Depreciation?
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(B)
Decreases
41
What is the impact on the accounting records if a customer is granted a discount?
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A
C
42
When a company uses the revaluation method, and the value of the asset decreases, what should the company do?
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(A)
Debit the income statement, credit accumulated depreciation
43
What is the advantage of the straight-line method of depreciation?
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(B)
It is a relatively simple method of depreciation.
44
What does the sales ledger control account show?
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(B)
The total amount owed by customers.
45
If a company allows interest charges to be added to a customer's overdue account, what is the impact on the accounts?
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(B)
Debit Customer's account, credit Interest income.
46
A company sells equipment for less than its net book value. This results in:
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(C)
A loss on disposal
47
What is 'net book value'?
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(C)
The asset's cost less accumulated depreciation.
48
Which of the following transactions would increase the balance in a purchases ledger control account?
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(C)
A credit purchase.
49
What impact does recording repairs to the premises account have on the draft profit?
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(B)
Profit is understated
50
What is accumulated depreciation shown on the statement of financial position?
