Mirchawala’s Hub Of Accountancy:

FA1: Recording Financial Transactions:

Mock Exam 2:
Question#1:
The trade receivables control account had a balance of $32,920 but the list of customer’s balances totalled
$35,760.
Which one of the following would explain the difference?
A. A customer balance of $2,840 has been omitted from the list of customers balances
B. The sales day book total is understated by $2,840
C. A contra of $2,840 with the payables ledger has not been posted to the control account
D. The trade receivables column of the cash receipts book is understated by $2,840
Question#2:
In the trade payables control account which one of the following would be on the credit side of the account?
A. Contras with the trade receivables control account
B. Purchases
C. Purchase returns
D. Cash paid to suppliers
Question#3:
Before paying a supplier, a purchase invoice should be checked against which one of the following
documents?
A. Paying in slip
B. Remittance advice
C. Goods received note
D. Sales order
Question#4:
Alesha’s trade receivables control account balance is $32,000 which does not agree with the total of the
individual accounts in the receivables ledgers. The following will need to be taken into account.
(1) Sales return of $4,300 were not recorded in the control account
(2) A total from the sales day book is overstated by $200
(3) An individual receivables account of $360 was omitted when the receivables ledgers were totalled
What is the correct total for the individual receivables ledger?
A. $27,140
B. $27,860
C. $27,500
D. $27,900
Question#5:
The following are extracted from Pierre’s trial balance:
$
Capital 30,000
Sales ?
Purchases 34,000
Inventory 20,000
Receivables 28,000
Payables 19,000
Cash 11,000
What is the figure for sales?
A. $44,000
B. $11,000
C. $26,000
D. $22,000
Question#6:
The following statements relate to bank reconciliation
(1) Unpresented cheques will result in the cash book balance being less than the credit balance on the bank
statement
(2) Outstanding lodgements can arise as a result of the banks clearing systems
Which of the above statements are correct?
A. Both statements

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B. Neither statement
C. Statement 1 only
D. Statement 2 only
Question#7:
Talik maintains a petty cash balance of $150 each week. At the end of one particular week he has vouchers
within petty cash of $16.20, $10.37 and $31.65.
In order to restore the petty cash balance, what transaction should talik record?
A. Dr Bank $91.78 Cr Petty cash $91.78
B. Dr Bank $58.22 Cr Petty cash $58.22
C. Dr Petty cash $91.78 Cr Bank $91.78
D. Dr Petty cash $58.22 Cr Bank $58.22
Question#8:
Jacob has a debit balance on his suspense account of $3,720. The following errors are subsequently found:
(1) Opening inventory of $1,980 is omitted from trial balance
(2) Bank overdraft of $630 has been included in the trial balance as a positive cash balance
(3) Receivables has been understated by $3,000.
After adjusting for these errors what is the remaining balance on the suspense account?
A. $630 Cr
B. $6000 Dr
C. Nil
D. $3,960 Dr
Question#9:
Warren purchased goods totalling $7,940 from Kevin on 1 may 20X5. Warren took advantage of a prompt
payment discount offered by Kevin and paid $7,750 on 10 may 20X5.
What journal entry should be posted to record the payment on 10 May 20X5 in the records of Warren?
A. Dr Trade payables $7940 Cr Bank $7940
B. Dr Trade payables $7750 Cr Bank $7750
C. Dr Trade payables $7940 Cr Discounts received $190 Cr Bank $7750
D. Dr Discounts received $190 Dr Trade payables $7750 Cr Bank $7940
Question#10:
Arthur sent a payment to Zoe along with a document that listed the items or invoices he was paying
What is this document known as?
A. Statement
B. Delivery note
C. Remittance advice
D. Credit note
Question#11:
William had $10,000 in his cash account at the start of November. The only transactions he made during
November were cash sales of $16,000 and cash purchases of $12,500
What was the balance on William’s cash account at the end of November?
A. $6,500 Dr
B. $6,500 Cr
C. $13,500 Dr
D. $13,500 Cr
Question#12:
Marina owns a hairdresser’s shop. She employs Betty and Kathleen to work in the shop. Each month she takes
$1,200 for herself and pays $200 to Betty and $400 to Kathleen.
What is the correct journal entry to record this transaction each month?
A. Dr Bank $1800 Cr Wages $1,800
B. Dr Bank $1800 Cr Drawings $1,200 Cr Wages $600
C. Dr Drawings $1,200 Dr Wages $600 Cr Bank $1,800
D. Dr Wages $1,800 Cr Bank $1,800
Question#13:
A business which is registered for sales tax, has the following totals for the purchases day book for a week:
$
Purchases (gross) 350,150
Purchases (net) 298,000

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Sales tax 52,150

How should this information be recorded in the double entry system?
A. Dr Purchases $298,000 Cr Accounts payables control $298,000
B. Dr Purchases $298,000 Dr Sales tax $52,150 Cr Accounts payables control $350,150
C. Dr Purchases $350,150 Cr Accounts payable control $298,000 Cr Tax $52,150
D. Dr Purchases $350,150 Cr Account payables control $350,150
Question#14:
A credit in the ledger account can represent which of the following?
(1) Decrease in an asset
(2) Increase in a liability
(3) Increase in an expense
(4) Decrease in income
A. 1 and 2 only
B. 3 and 4 only
C. 2 and 3 only
D. 1,2,3 and 4
Question#15:
Mariene receives cheque payments from her customers which she pays into the bank on a daily basis.
What should the cheques be accompanied by when they are paid into the bank?
A. Cheque requisition form
B. Paying-in slip
C. BACS payment form
D. Patty cash form
Question#16:
Which of the following should be classified as liabilities?
(1) Trade receivables
(2) Sales tax payables
(3) Trade payables
(4) Drawings
A. 2 and 4
B. 3 and 4
C. 2 and 3
D. 1 and 2
Question#17:
The following are extracted from Boris’ trial balance:
$
Sales 67,000
Purchases ?
Capital 80,000
Trade payables 21,000
Trade receivables 35,000
Inventory 19,000
Cash 14,000
What is the figure for purchases?
A. $34,000
B. $128,000
C. $100,000
D. $5,000
Questions#18:
Henry is owed $172.00 from Clechan, a credit customer. Clechan is bankrupt and a final payment of $0.40 for
every $1 owed has been received in final settlement of the debt. Henry is not registered for sales tax.
How should Henry record this in the ledger?
A. Dr Cash $68.80 Dr Irrecoverable debts $103.20 Cr Accounts receivables $172.00
B. Dr Irrecoverable debts $68.80 Cr Accounts receivables $68.80
C. Dr Irrecoverable debts $103.20 Cr Accounts payable $103.20
D. Dr Cash $68.80 Dr Irrecoverable debts $103.20 Cr Accounts payables $172.00

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Question#19:
Which of the following are risks that an organization might be exposed to if it does not have adequate data
protection procedures in place?
(1) Access to personal information by unauthorised parties
(2) Personal information being used for purposes for which it was not originally intended
(3) Harm to an individual caused by inaccurate or misleading information about them being circulated
electronically
(4) Information about an individual being held for a longer period of time than permitted by law
A. 3 and 4 only
B. 1 and 2 only
C. 1,2,3 and 4
D. 1,2 and 3 only
Question#20:
Which one of the following books of prime entry would settlement discounts received be recorded?
A. Sales day book
B. Cash payments book
C. Purchase day book
D. Cash receipts book
Question#21:
At 31 October 20X0 Jemma was owed $138,644 by her customers. She has calculated that her receivables
allowance should be $2,600
How should receivables be reported in Jemma’s statement of financial position at 31 October 20X0?
A. As a liability of $138,644 and an asset of $2,600
B. As a liability of $136,044
C. As an asset of $136,044
D. As an asset of $138,644 and a liability of $2,600
Question#22:
Pervez has $2000 in his business bank account. He withdraws $750 from this account for personal use.
Which part of the accounting equation will change as a result?
A. Assets and Capital
B. Assets and Liabilities
C. Liabilities and Capital
D. Capital and Profit
Question#23:
Stuart’s trial balance did not agree and a suspense account was opened for the difference. A subsequent
cheque of the accounting system revealed the following errors:
(1) $54,900 paid as wages was correctly recorded in the cash book but was debited to the wages account as
$45,900
(2) A total of $27,600 for discounts received was posted to the credit side of the trade payables account
When correcting the errors which would need an entry to be made in the suspense account?
A. Neither 1 nor 2
B. Both 1 and 2
C. 1 only
D. 2 only
Question#24:
Elizabeth is paid a basic wage $1,500 a week. If total production is more than 5% higher than the target
production for that week,an additional bonus of 8% of the basic wage for the week is paid to each employee.
In week 6 the target set was 49,000 units and actual production was 54,000 units.
What is Elizabeth’s bonus for week 6?
A. $1,620
B. $120
C. $75
D. No bonus is payable

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Question#25:
Mischa sells goods to Felipe allowing a 5% trade discount. At the start of May, Felipe had no outstanding
balance with Mischa.During the month of May, Felipe had the following transactions:
4 May Purchased goods with a list price of $2,800
20 May Returned goods with a list price of $1,340
28 May Paid Mischa $2,500
At the end of May what is the balance on Felipe’s account in Mischa’s receivables ledger?
A. $1,040 Dr
B. $1,040 Cr
C. $1,113 Dr
D. $1,113 Cr
Question#26:
The following statements relate to an imprest system of petty cash:
(1) The total cash and total vouchers in the petty cash tin will always add up to the imprest amount
(2) The total amount in the petty cash tin is periodically topped up to a fixed limit
Which of the above statements are correct?
A. Statement 1 only
B. Neither statement
C. Statement 2 only
D. Both statements
Question#27:
The following statements relate to the aged receivables analysis:
(1) An aged receivables report is useful for identifying for late paying customers and for providing information
about debt collection efficiency to management
(2) An aged receivables report lists all suppliers, how much is owed to them and for how long the debt has
been outstanding
Which of the following is correct?
A. Both statements
B. Statement 1 only
C. Neither statement
D. Statement 2 only
Question#28:
One of the Jean’s customers purchased goods on credit for $1,880 plus sales tax of $329, and paid Jean $2,209
for those goods.
What is the double entry to record this payment?
A. Dr Cash $2,209 Cr Trade receivables $1,880 Cr Sales tax $329
B. Dr Cash $2,209 Cr Sales $1,880 Cr Sales tax $329
C. Dr Cash $2,209 Cr Sales $2,209
D. Dr Cash $2,209 Cr Trade receivables $2,209
Question#29:
Why must all journal entry be accompanied by a narrative?
A. As it is a legal requirement in most regimes
B. As it is a requirement of international accounting standards
C. For audit and control purposes
D. For future training purposes
Question#30:
Betty sold goods worth $3,300 to Sean on credit. She subsequently discovered that Sean is bankrupt and will
not be able to pay for the goods.
What entry should Betty make in her accounts as a result of Sean’s bankruptcy?
A. Dr Irrecoverable debts $3,300 Cr Receivables $3,300
B. Dr Receivables $3,300 Cr Irrecoverable debts $3,300
C. Dr Sales $3,300 Cr Irrecoverable debts $3,300
D. Dr Irrecoverable debts $3,300 Cr Sales $3,300
Question#31:
The balance on the payables ledger control account was $5,891. It was then discovered that the purchase day
book was overcast by $135 and that discounts received of $90 had not been posted at all.

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What is the correct balance on the payables ledger control account?

A. $5,846
B. $5,936
C. $6,116
D. $5,666
Question#32:
Details of BACS payment will be found on which document?
A. Standing order mandate
B. Bank statement
C. Petty cash voucher
D. Paying-in slip
Question#33:
James makes a payment of $6,256 to Eric in full settlement of an invoice for $6,800
How should James record the discount of $544?
A. Dr Discount received Cr Payables
B. Dr Discount allowed Cr Payables
C. Dr Payables Cr Discount allowed
D. Dr Payables Cr Discount received
Question#34:
Which company policy sets out the length of time different types of information should be kept?
A. Corperate governance policy
B. Retention policy
C. Transaction policy
D. Sustainability policy
Question#35:
Which one of the following is the correct posting for purchases from the purchase day book?
A. Dr Payables Cr Purchases
B. Dr Purchases Cr Bank
C. Dr Purchases Cr Payables
D. Dr Bank Cr Purchases
Question#36:
Which of the following documents must contain a monetary amount?
(1) Quotation
(2) Delivery note
(3) Sales invoice
(4) Remittance advice
A. 1, 2 and 3
B. 3 and 4 only
C. 2 and 3 only
D. 1,3 and 4
Question#37:
Laurence buys goods from Patrick and receives a 10% trade discount. During May Laurence bought goods with
a list price of $8,930 (including sales tax) sales tax is 17.5%
What is the value of the invoice that Patrick issued to Laurence?
A. $8,037
B. $9,443
C. $6,840
D. $7,600
Question#38:
The sales day book totals for a trader who is registered for sales tax were as follows:
$
Sales (net) 151,000
Sales tax 26,425
Sales (gross) 177,425
How should these be posted in the double entry system?
A. Dr Trade receivables control $177,425 Cr Sales tax $26,425 Cr Sales $151,000
B. Dr Trade receivables control $151,000 Cr Sales $151,000

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C. Dr Trade receivables control $177,425 Cr Sales $177,425

D. Dr Trade receivables control $151,000 Dr Sales tax $26,425 Cr Sales $177,425
Question#39:
In Maureen’s accounting record the total of the balances on the customer’s accounts is $55,000 and the
balance on the receivables control account is $58,500
Which of the following would explain this situation?
A. A sales invoice for $3,500 has been debited to a supplier’s personal account instead of customer’s
B. The total of the purchases book has been overcast by $3,500
C. The total of the sales book has been undercast by $3,500
D. A sales invoice of $3,500 has been omitted from the sales day book
Question#40:
At the end of May there is a credit balance in Kwal’s cash book of $839. On receiving his bank statement Kwal
identified the following items:
(1) A receipt into the bank of $1,212 had been recorded in the cash book as $2,121
(2) Bank charges of $63 have not been recorded in the cash book
After accounting for these items what should be the cash book balance?
A. $133 Dr
B. $7 Dr
C. $1,715 Cr
D. $1,811 Cr
Question#41:
During the year ended 30 November 20X8 Varsha earned a gross salary of $27,000. She paid 10% and her
employer paid 5% of her gross salary into a pension fund.
What amount will her employer record as the total wages and salaries expense for Varsha for the year
ended 30 November 20X8?
A. $27,000
B. $25,650
C. $31,050
D. $28,350
Question#42:
Which type of accounting data file is permanent and would not usually be deleted?
A. Master file
B. Transitory file
C. Non-active file
D. Active file
Question#43:
According to her sales return day book Amy’s returns were $880 excluding sales tax at 17.5%. Amy is
registered for sales tax.
How should this information be recorded In Amy’s general ledger?
A. Dr Receivables control $1,034 Cr Returns inwards $1,034
B. Dr Returns inwards $880 Cr Receivables control $880
C. Dr Returns inwards $880 Dr Sales tax $154 Cr Receivables control $1,034
D. Dr Receivables control $1,034 Cr Returns inwards $880 Cr Sales Tax $154
Question#44:
The following is a personal account in Brian’s ledger:
Kelly $ $
16 May Bank 1,008 01 May Balance b/f 0
16 May Discount 252 06 May Invoice SL23677 1,260
Which of the following is correct?
A. Brian purchased goods from Kelly and a discount of 20% was received when the invoice was settled
B. Brian purchased goods from Kelly and a discount of 25% was received when the invoice was settled
C. Brian sold goods to Kelly and a prompt payment discount of 20% was taken by Kelly
D. Brian sold goods to Kelly and a prompt payment discount of 25% was taken by Kelly
Question#45:
Harval started up in business on 1 May 20X9 using $6,500 of his savings and $1,800 he received as a business
bank loan. During his first month of trading he:
(1) Bought goods costing $2,800 for cash

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(2) Paid expenses of $1,240

(3) Bought a van costing $4,300 for cash
(4) Made sales of $5,700 of which $1,700 were on 30 day credit limit
What was the balance on his cash account at 31 May 20X9?
A. $3,960 Cr
B. $5,660 Cr
C. $5,660 Dr
D. $3,960 Dr
Question#46:
A transaction has been recorded in the ledger of Rafik as follows:
Motor vehicles
$ $
7 May 17,600
Bank
$ $
7 May 17,600
What transaction does the recording represent?
A. Purchase of motor vehicles paid for by cheque
B. Banking of the proceeds from the sale of motor vehicles
C. Purchase of motor vehicles on credit
D. Receipt of a bank loan to purchase motor vehicles
Question#47:
What is the correct double entry to record a receipt from a customer which includes a prompt payment
discount given to a customer who was not expected to take advantage of the discount when the sales was
made?
A. Dr Bank Cr Receivables Cr Sales
B. Dr Bank Dr Sales Cr Receivables
C. Dr Sales Cr Receivables
D. Dr Receivables Cr Sales
Question#48:
Which of the following should be recorded in the purchases day book?
A. A reminder received about an overdue invoice
B. A credit note received from a customer
C. An invoice form a supplier
D. A delivery note from a supplier
Question#49:
What is the purpose of receivables ledger accounts if a receivables control account is also maintained?
A. To form part of the general ledger double entry system
B. To record journal entries and adjustments
C. To record the detailed transactions of each customer
D. To record a customer’s summarised transactions
Question#50
Duncan performed a trade payables control account reconciliation and found the following errors:
(1) The purchase day book was understated by $560
(2) A purchase invoice for $425 had been omitted from the accounts
Which one of the following shows the necessary adjustments required to ensure the balance reconcile to
the correct amount?
A. Trade payables control account Cr $985
Total of the individual supplier accounts Add $425
B. Trade payables control account Cr $985
Total of the individual supplier accounts Subtract $425
C. Trade payables control account Dr $985
Total of the individual supplier accounts Subtract $425
D. Trade payables control account Dr $985
Total of the individual supplier accounts Add $425

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