Accounting for IGCSE & O level - Accounting Procedures (Section 9)
1
What is the purpose of depreciation?
Answer
(A)
To reduce the value of a non-current asset each year.
2
Which of the following statements are true regarding discounts?
Answer
B
C
3
Which of the following will appear on the balance sheet?
Answer
A
B
4
What is the impact on the draft profit if the sales commission was misposted as \$400 where the actual amount was \$140?
Answer
(B)
Profit is understated by \$260
5
What accounting record is used to track individual transactions with suppliers?
Answer
(D)
Purchases Ledger.
6
Which account is credited when a business makes a credit sale?
Answer
(C)
Sales Revenue
7
Which of the following is an example of a capital receipt?
Answer
(C)
A loan provided to the business
8
Which of the following are examples of non-current assets?
Answer
B
C
9
Which events would decrease the balance of the purchases ledger?
Answer
A
B
C
10
Which is a type of error?
Answer
A
B
C
11
Which of the following events would *not* trigger the use of the depreciation method?
Answer
(D)
Regular maintenance on the equipment
12
What is the impact of understating the value of non-current assets?
Answer
(D)
The financial position will be understated.
13
What type of error is committed when a payment for electricity expenses is incorrectly recorded as a profit?
Answer
(B)
Error of Principle
14
If an asset's cost is $10,000, accumulated depreciation is $6,000, and it is sold for $5,000, what is the gain or loss?
Answer
(A)
Gain of $1,000
15
What would be the appropriate journal entry if a supplier gives a refund?
Answer
(A)
Debit Trade Payables, Credit Bank
16
What will the correction of the error of commission involve?
Answer
C
D
17
Receivable fee \$240 was recorded in the purchase journal \$0 side. How would it impact the draft profit?
Answer
(B)
Profit was understated by \$240
18
What is the impact of granting a discount to a customer on a credit sale?
Answer
(B)
Decreases the customer's account balance.
19
In the scenario where a sales commission of $140 was misposted as $400, what is the impact on the capital?
Answer
(B)
Capital was understated by $260.
20
What happens to the asset's net book value over time?
Answer
(B)
It decreases
21
What is the role of an accountant?
Answer
(D)
All of the above
22
Which of the following statements is correct about capital expenditure?
Answer
(B)
Capital expenditure is recorded in the statement of financial position.
23
What is the depreciation charge per year if the cost of asset is $12,000 and the salvage value is $1,000 and the useful life is 4 years?
Answer
(B)
$3,000
24
What is a common reason for using the revaluation method?
Answer
(B)
To reflect the fair market value of assets.
25
How does depreciation affect the balance sheet?
Answer
(C)
Decreases assets and decreases equity.
26
What is the impact on the customer’s account balance when a customer returns goods?
Answer
(B)
Decreases.
27
What is the impact of interest charges on overdue trade receivables in the sales ledger?
Answer
(A)
Increases the debtor's balance
28
A payment of $230 for those purchased on credit from M. Shah had been debited in error to the trade payable account for J. Shah. Which of the following statement is correct?
Answer
(B)
Debit J. Shah; Credit M. Shah
29
Which method is more complex in estimating annual depreciation?
Answer
(B)
Reducing balance method
30
What are the two primary accounts affected when recording the sale of an asset?
Answer
(B)
Cash and the asset account
31
What will be the journal entry if \$200 of discount allowed was omitted?
Answer
(B)
Debit expenses and credit suspense amount
32
Which of the following depreciation methods generally results in the highest depreciation expense in the early years of an asset's life?
Answer
(B)
Declining balance
33
If a business records revenue expenditure as a capital expenditure, which of the following is the impact?
Answer
(A)
Profit will be overstated and the financial position will be overstated.
34
In the context of preparing control accounts, which of the following is the primary function of a purchases ledger control account?
Answer
(C)
To provide a summary of trade payables.
35
What is the difference between the cost of the non-current asset and the accumulated depreciation known as?
Answer
(B)
The net book value.
36
If a business receives cash from a customer, which journal is this entry recorded in?
Answer
(C)
Cash receipts journal
37
In the reducing balance method, what is the depreciation calculated upon each year?
Answer
(B)
Net book value of the asset
38
Which of the following represents a fixed asset?
Answer
(C)
Land
39
What will happen to the revenue and profit if the revenue receipt is recorded as a capital receipt?
Answer
(B)
Revenue and profit will be understated.
40
Which statement best describes the purpose of a credit note?
Answer
(C)
To record a decrease in the amount owed by a customer.
41
Which of these is a reason for the dishonor of a customer’s cheque?
Answer
(A)
There are insufficient funds in the customer's account.
42
When 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, what is the entry for this error?
Answer
C
D
43
What is the effect on owner's equity from a capital receipt?
Answer
(B)
Owner's equity is increased.
44
What is the purpose of a purchase order?
Answer
(C)
To order goods from a supplier.
45
What's the usual journal entry for the depreciation of an asset?
In a control account, the Sales Ledger Control Account contains a debit of $10,000, the balance on the individual trade receivable accounts in the sales ledger for the same month. If they do not agree there errors must be present in their accounts. The individual differences should be recorded:
Answer
(A)
in the sales ledger control account
47
What type of expenditure increases the value of a non-current asset?
Answer
(B)
Capital
48
What does the residual value represent?
Answer
(B)
The estimated value of an asset at the end of its useful life.
49
What type of accounts can purchase ledger control accounts show?
Answer
(A)
Both debit and credit balances
50
What is the term for the difference between an asset's cost and its accumulated depreciation?
