Accounting for IGCSE & O level - Accounting Procedures (Section 4)
1
What is the effect of a discount allowed to a customer on the sales ledger control account?
2
What journal records all cash payments made by a business?
3
Which accounts are used in the double entry for the receipt of capital?
Answer(C)
Capital account and bank account.
4
Which of the following actions would decrease a company’s trade payables?
Answer(A)
Returning goods to a supplier.
5
Which accounts are used to account for the revaluation of an asset?
6
What steps should be followed to ensure accurate financial statements?
7
Which of the following actions will increase the trade payables balance?
Answer(C)
Making a credit purchase from a supplier.
8
If a customer's check bounces, what should the seller's accounting entry be?
Answer(B)
Debit Customer, Credit Bank.
9
Which asset would benefit from the reducing balance method?
Answer(B)
An asset that loses value in early years.
10
Which transactions can cause a credit balance in the sales ledger control account?
11
Which of the following transactions would decrease the balance in the sales ledger control account?
12
What accounting document records the details of a sale?
13
Which of the following is not a prime entry journal?
Answer(D)
Sales ledger control account
14
What is the journal entry for credit purchases?
Answer(C)
Debit Purchases, Credit Trade Payables
15
Which of the following will decrease the balance of a supplier’s account in the purchases ledger?
16
A customer has a credit balance on their account. The bank has dishonored a check. What should you do?
Answer(D)
Debit the customer’s account.
17
Which of the following is recorded in the Cash Payments Journal?
18
What does the revaluation surplus represent?
19
What would be the journal entry to correct the error where a receivable fee was recorded in the purchase journal?
Answer(C)
Debit Supplier's Account and Credit Trade Payables.
20
If the cash book records a decrease in the cash balance, what type of transaction is this?
21
What impact does not recording drawings of $3,000 have on the financial statements?
Answer(A)
No impact on the draft profit, Capital understated by $3,000
22
What is the impact on the draft profit and financial position when repairs ($200) were debited to the premises account?
Answer(B)
Expenses were overstated, Profit understated, Non-current assets overstated.
23
What is the correct journal entry to correct the error where a sales commission of $140 was misposted as $400?
Answer(B)
Debit Suspense Account, Credit Sales Commission.
24
What journal is used to record all the cash payments made by the business?
25
What is the purpose of the suspense account?
Answer(B)
To identify errors in the trial balance.
26
What is the usual result when a customer pays the amount they owe?
27
What is the formula for calculating straight-line depreciation?
Answer(A)
(Cost - Salvage Value) / Useful Life
28
What is the main difference between capital and revenue expenditure?
Answer(B)
Capital expenditure benefits more than one accounting period, revenue expenditure benefits the current period.
29
What happens to the accumulated depreciation when disposing of an asset?
30
Which of the following would be classified as a capital expenditure?
Answer(C)
Purchase of a new delivery vehicle
31
A customer dishonored a cheque. What is the correct accounting entry?
Answer(B)
Debit Customer, Credit Bank
32
What are the corrections required in the journal before correcting the above errors. (The first has been completed for you)
Answer(A)
Debit wages $45 and credit bank $45
33
What is a likely correction for a $240 receivable fee recorded in the purchase journal?
Answer(C)
Debit Supplier's account, Credit Trade payables.
34
If a business grants a discount to a customer, what is the effect on their account?
Answer(B)
The account balance decreases.
35
What is the first step when accounting for the disposal of an asset?
Answer(C)
Determine the asset's net book value.
36
A business issues a debit note. What is the impact on its records?
Answer(A)
Increase the customer’s account.
37
Which document is used to record a customer's credit?
38
How do refunds from suppliers affect the total of trade payables?
39
When disposing of a non-current asset, what account(s) need to be closed or updated?
40
If \$240 receivable fee was recorded in the purchase journal, how the sales profit will be affected?
41
Which of the following statements are true concerning the correction of errors?
42
What is the effect on the draft profit when the repairs were incorrectly debited to the premises account?
Answer(B)
Profit understated by the expense amount
43
What type of method is the reducing balance method?
44
What is the impact of a credit note on the customer's account?
Answer(B)
The customer's balance decreases.
45
In a purchase ledger control account, which type of document would decrease the balance owed to a supplier?
46
Which of the following is a benefit of using a sales ledger control account?
Answer(B)
It facilitates the process of reconciling the sales ledger with the general ledger.
47
If goods are returned to a supplier, which account is debited?
48
When the drawings were not recorded, what is the amount of debit or credit entry?
Answer(D)
Debit capital by the drawings amount.
49
The correct impact of recording a small total of credit sales of $1,000, which was missed is:
Answer(D)
Increase the trade receivables
50
What type of error has occurred when the payment for electricity expenses was recorded as a profit in the electricity account?
