Accounting for IGCSE & O level - Accounting Procedures (Section 22)
1
How do you characterize the error where the building was debited instead of repairs?
Answer
(A)
Error of principle
2
In a sales ledger, which prime entry book would be used to record a cheque payment received from a customer?
Answer
(C)
Cash book
3
Which of the following transactions impact the balance of the Purchases Ledger Control Account?
Answer
A
B
C
4
When a business sells goods for cash, what is the appropriate entry in the sales ledger?
Answer
(C)
No entry in the customer account.
5
Which of the following are examples of capital receipts?
Answer
A
B
6
In the purchases ledger, what accounting entry is recorded when a business returns faulty goods to a supplier?
Answer
(C)
Debit purchase returns and credit supplier's account
7
What type of account is a purchases ledger control account?
Answer
(C)
A personal account
8
Which ledger contains individual supplier accounts?
Answer
(C)
Purchases Ledger
9
Which actions would typically be reflected in a Sales Ledger Control Account?
Answer
A
B
C
10
What is the balance of Accumulated Depreciation account on the date of disposal?
Answer
(B)
Its original cost.
11
What is the normal balance of a Purchases Ledger Control Account?
Answer
(B)
Credit
12
What is a contra-asset account?
Answer
(A)
An account that reduces the balance of an asset account.
13
If a sale of $1,000 was correctly recorded in the sales account but not in the customer's account, what would be the impact on the Sales Ledger Control Account?
Answer
(C)
It would be understated.
14
What accounts are likely to be involved in a journal entry to record the disposal of equipment?
Answer
A
B
C
D
15
An error resulted where the debits and credits for electricity expenses of £220 were reversed, how do you account for the error?
Answer
(D)
A debit entry for twice the amount of the error
16
What would be the journal entry for the sale of an asset that is fully depreciated?
Answer
(B)
Debit Cash, Credit Asset
17
Which of the following will increase the balance in the purchases ledger control account?
Answer
A
D
18
Which depreciation method often results in a higher depreciation expense in the earlier years of an asset's life and a lower expense in later years?
Answer
(C)
Reducing balance method
19
What accounting procedure is being performed if the balance on a trade payables account is cleared by a payment?
Answer
(D)
Settlement
20
Which of these prime entry books would normally be used to record a cheque received from a customer?
Answer
(C)
Cash book
21
If a $100 payment for utilities was debited to the rent expense account, this would be an example of:
Answer
(A)
Error of commission
22
Which of the following best describes a revenue expenditure?
Answer
(C)
Costs related to the day-to-day operations of the business.
23
Which of the following would be an example of a capital receipt?
Answer
B
C
24
If a business fails to record a cash payment for rent, how will this affect the trial balance?
Answer
(C)
The trial balance will still balance, but the profit will be incorrect.
25
How would the error where a building cost was debited to the Repairs account affect the financial statements?
Answer
(A)
Assets and expenses would be misstated.
26
What happens in the sales ledger when a customer returns goods?
Answer
(B)
The customer's account balance decreases.
27
What is the impact of not recording an electricity bill on the profit and loss for the period?
Answer
(A)
The profit will be overstated.
28
In the provided statement of revised profit, what error affected the calculation of the profit?
Answer
(A)
The annual depreciation charge for the year.
29
What is the impact on the accounting equation when a company purchases equipment with cash?
Answer
(D)
One asset increases, and another asset decreases.
30
In the sales ledger, what effect does a cash payment from a customer have on the customer's account?
Answer
(B)
The account is credited.
31
If a customer returns goods previously purchased on credit, what is the effect on the Sales Ledger Control Account?
Answer
(B)
The account is credited.
32
Which of the following is the most common cause of accounting errors?
Answer
(C)
Negligence and carelessness
33
If a business grants a customer a discount, what's the impact on the Sales Ledger Control Account?
Answer
(B)
The account is credited.
34
What is the impact of a sales return on the sales ledger control account?
Answer
(B)
Decreases the balance
35
What type of account does a debit increase?
Answer
(A)
Expense accounts.
36
When a company makes a sale on credit, which book of prime entry is used to record the transaction?
Answer
(B)
Sales Journal
37
Which of the following would increase the amount of depreciation expense?
Answer
A
B
38
If a debit entry is incorrectly posted as a credit entry, what type of error is this?
Answer
(D)
Error of reversal
39
Which financial statement is most directly affected by depreciation expense?
Answer
(B)
Income Statement
40
What is the impact of a dishonored cheque on a customer's account in the sales ledger?
Answer
(A)
Increases the balance.
41
If the purchases account was understated, what will be the impact on the profit?
Answer
(A)
Profit is overstated.
42
A business owner discovered that depreciation expense was not recorded. What is the effect on the financial statements?
Answer
(B)
Assets are overstated and profit is overstated.
43
A business receives a discount from a supplier for early payment. How does this affect the Purchases Ledger Control Account?
Answer
(B)
The account is credited.
44
What is the effect of an error of omission?
Answer
(B)
The trial balance will remain balanced.
45
Which of the following actions would result in a decrease in a company's owner's equity?
Answer
(A)
Declaring a cash dividend.
46
Which of the following can be included in the cost of a non-current asset?
Answer
A
B
C
47
What is the effect on profit if a business *overstates* its closing inventory?
Answer
(B)
Profit is overstated.
48
Which entries would be reflected in the Sales Ledger Control Account?
Answer
A
B
D
49
Which of the following errors would NOT cause the trial balance to be imbalanced?
Answer
(C)
A transposition error (e.g. $123 recorded as $132).
50
What action will *reduce* the balance in the Sales Ledger Control Account?
