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Accounting for IGCSE & O level - Accounting Procedures (Section 28)

1
What is the relationship between 'depreciation' and 'useful life'?
Answer
(A)
Depreciation is the process of allocating an asset's cost over its useful life.
2
Which of the following errors would cause the trial balance to be out of balance?
Answer
(A)
An error of omission.
3
Which event is *least* likely to be recorded in the Purchases Ledger Control Account?
Answer
(C)
Selling goods to a customer on credit.
4
Which of the following is an example of revenue expenditure?
Answer
(B)
Paying wages to employees
5
If the purchases journal was understated by £200, how would this affect the company's profit?
Answer
(A)
Profit would be overstated.
6
Which of the following is most likely to be a source of errors in accounting?
Answer
(D)
Poor internal controls.
7
A business spends money on installing air conditioning in a newly purchased building. This is:
Answer
(A)
Capital expenditure
8
What would a debit entry in the Purchases Ledger Control Account represent?
Answer
(B)
A payment to a supplier.
9
Which of the following errors would *not* affect the profit?
Answer
(C)
Drawings omitted
10
What are the effects to correct the error, advertising expenses which were understated by £300 and sales were understated by £300?
Answer
A
D
11
If a supplier grants a company a discount, how does that affect the Purchases Ledger Control Account?
Answer
(B)
The account is credited.
12
Which of the following would typically be recorded in a Purchases Ledger Control Account?
Answer
A
B
D
13
In the provided example, how would the draft income statement be affected if the purchase journal was overstated by £200?
Answer
(B)
Profit is understated by £200.
14
What type of expenditure includes the purchase of office supplies?
Answer
(B)
Revenue expenditure