Q1. A company receives rent from a large number of properties. The total received in the year ended 31 October 2002 was $481,200. The following were the amounts of rent in advance and in arrears at 31 October 2001 and 2002:
31 October 2002 ($)
31 October 2001 ($)
Rent Received in advance 28,700 31,200
21,200 18,400 Rent in arrears (all subsequently
What amount of rental income should appear in the company’s income statement for the year ended 31 October 2002?
Q.2 Which of the following is not a reason for the difference in the balance as per bank statement and the bank balance on the cashbook after the cashbook has been updated for items found on bank statement?
Errors made by bank
Lodgements not yet credited by the bank
Q.3 Which of the following is a current liability?
Q.4 Grand International made a net profit of $66,880 for the year ended 31 December 20X7. Later on it was found out that payment made for office equipment purchased by the company was $14,400 had been erroneously debited to office expenses account. Office equipment is depreciated at 10% per annum on a straight line basis. Even in the year of acquisition, a full year’s charge for depreciation is made. The net profit after adjustment of the error will be _________
Q.5 LMN plc, a supplier of component X used by ABC plc sent its statement of account to ABC plc. As per the statement the balance due to the supplier is $7,160. The amount due is $3,312 as per ABC plc payables ledger account. A closer examination highlighted that LMN plc has not taken into account a cash amount of $3,264 paid by ABC plc. Moreover, a discount of $32 withdrawn by LMN plc has not been adjusted in ABC’s accounts How much difference still remains after the above gaps have been adjusted?
Q.6 All of the following is reasons for providing for depreciation of fixed assets EXCEPT:
Upward movement in the value of assets
Wear and Tear
Q.7 The cash book of Susan shows her to be ?2,030 overdrawn. On a closer examination it was found that a standing order payment for ?365 had been
entered in the cash book twice. In addition, there was a dishonoured customer’s cheque for ?275 that had been debited in the cash book rather than credited.
What is the correct overdraft position of Susan?
Q.8 Which of the following is not depreciated?
Q.9 Which method of depreciation also takes into account interest on capital on capital expended?
Sum of digits method
Reducing balance method
错误；嵌入对象无效。Straight line method
Q.10 The trial balance of XYZ plc did not agree. The company opened a suspense account and transferred the difference to the account. At a later date, the following errors were discovered:
utility bill of ?320 has been recorded in the utility account as ?230
What was the original balance of the suspense account?
Debit Pounds 120
Credit Pounds 120
Debit Pounds 145
Credit Pounds 145
Q.11 The allowance for receivables for ABC plc was $23,400 on 30 September 2007. At 30 September 2008 trade receivables stood at $310,200. The company decided to write off debts for $22,200. Based on past year events, the company also decided to adjust the allowance to 5% of trade receivables. What amount should appear in the Income Statement of ABC plc for the year ended 30 September 2008 in relation to these items?
Q.12 As on 1 Jan 2007, the provision for doubtful debtors stood at ?5,000. The firm wants to maintain this provision at 5% of outstanding debtors at the end of the year. On 31 December 2007, outstanding debtors total ?70,000. What is the correct entry in the accounts to record this?
Dr. Profit & Loss ?3,500, Cr. Provision for doubtful debts ?3,500
Dr. Provision for doubtful debts ?3,500, Cr. Profit & Loss ?3,500
Dr. Profit & Loss ?1,500, Cr. Provision for doubtful debts ?1,500
Dr. Provision for doubtful debts ?1,500, Cr. Profit & Loss ?1,500
Q.13 Which of the following is true about Profit and Loss Account?
It depicts the state of affairs in a company as on a particular date
It is a snapshot of a company’s overall worth
It is a report of the company’s profit on the sale of goods or the provision of their service over a trading period
It is a is a statement of the total assets and liabilities of the company
On 1 January 2007, John had prepaid electricity bill of ?200. He paid ?1,200 on 1 March 2007 for the year ended 28 February 2008. How much should be charged to the Profit & Loss account for the year ended 31 December 2007?
Q.15 The importance of accruals concept is:
Assets is equal to cash received minus cash paid
Assets is equal to revenues earned minus expenses incurred
Net Profit is equal to cash received minus cash paid
Net Profit is equal to revenues earned minus expenses incurred
Q.16 The statement of changes in equity will include all of the following EXCEPT:
Amortization of capitalized development costs
Profit for the financial year
Surplus on revaluation of non-current assets
How should deposits in transit be treated while reconciling the ending cash balance as
per the bank statement with the correct adjusted cash balance?
Deposits in transit should be ignored
Subtracted from the balance as per the company’s books
Subtracted from the balance as per the bank statement
Added to balance as per the bank statement
Q.18 Your company has a debt-to-equity ratio of 1.5. The industry average is 1.3.
What will it convey about the company to the outsiders?
The company has high creditworthiness
The creditors of the company are secure
The company has a higher financial risk than the industry average
The company has less liquidity than other firms in the industry
There is a net increase of ?400,000 in net fixed assets over the last year. Other details
are as follows:
What was the firm’s depreciation expense over the period?
Q.20. In which of the following situations will the gross profit margin remain
unchanged, but the net profit margin will decline over the same period?
Increase in sales is much more than increase in expenses
Increase in the rate of tax
Increase in cost of goods sold is much more than increase in sales
Decrease in dividends
Unicorn plc has the following month-end balances:
What should be the correct ending cash balance?
As at 31 December 2006, the balance on the provision for doubtful debts account was ?1,100. However, as at 31 December 2007, the balance on the provision for doubtful debts account stood at ?1,700 and outstanding debtors at ?17,600. What will be the net value of debtors shown on the balance sheet as on 31 December 2007?
Q.23 In a cash flow statement, business transactions are classified into operating, investing, and financial activities. Which one of the following can be classified as cash flow from financing activity?
Proceeds of issue of shares
Payment of tax
Payment to acquire fixed assets
Q.24 ABC plc returned defective goods worth ?530 to its supplier. This was incorrectly recorded as ?350 in the ledger accounts. To correct the error what
journal entry will you pass?
Dr Suspense Account Pounds 180, Cr Creditors Account Pounds 180
Dr Creditors Account Pounds 180, Cr Suspense Account Pounds 180
Dr Purchases Account Pounds 180, Cr Suspense Account Pounds 180
Dr Creditors Account Pounds 180, Cr Purchases Returns Account Pounds 180
All of the following statements are correct EXCEPT:
Carriage inwards and carriage outwards are both debit balances
Returns inwards and returns outwards are both debit balances
Purchases have a debit balance and sales have a credit balance
Assets have a debit balance and liabilities has a credit balance
Pat and Peter Inc. has a 12 percent return on total assets. Total assets have a value of
$240,000. Net profit margin is 5 percent. What are its sales?
Susan is preparing a cash flow statement using indirect method and starting from an operating profit of ?6,912. Which of the following is correct in her approach?
Depreciation charges should be added to operating profit
Increase in inventory should be added to operating profit
Increase in accounts payable should be deducted from operating profit
All of the above
Sarah has debtors of ?82,500 as at 31 March. After reviewing the debtors, Sarah decided to write off the debt of Susan ?1,000, Betty ?500, Mathew ?2,000 and John ?1,250. Besides, Sarah also wants to provide against a specific debt of ?250 and make a general provision at 2% of debtors. At present the provision for doubtful debts account is ?2,000. Sarah also received ?300 from a debt that had been previously been written off. What amount should be charged to the income statement in respect of bad debt expense?
_____________ ratios indicate the extent to which the firm is financed with debt.
Calculate the amount of insurance that should be included in the Profit & Loss account for the year ending 31 December 2006.
Which of the following is an accounting concept?
Which of the following statement about a journal is correct?
For a given journal entry, debits always exceed credits
For a given journal entry, credits always exceed debits
A journal is a secondary book of accounts
In a journal transactions and events are converted into debit–credit format
Q.33 What accounting concept does a person violate if he takes personal
costs as business costs?
Going Concern Concept