Question#1

Nana sold goods to Nonkululeko and sent them an invoice. Nonkululeko did not pay
this invoice until 21 days after the receipt of goods.
Which of the following correctly describes the transaction from Nana’s point
of view?
A credit purchase
A cash sale
A credit sale
A cash purchase

Question#2
In the trade payables ledger account, which one of the following would be on the
credit side of the account?
Cash paid to suppliers
Purchase returns
Purchases
Contras with the trade receivables ledgerr

Question#3

Before paying a supplier, a purchase invoice should be checked against which

one of the following documents?
Sales order
Paying in slip
Goods received note
Remittance advice
Question#4
Teagan uses a computerised accounting system which is fully integrated with the sales,
purchases and inventories systems only.
Which of the following functions could Teagan’s computerised accounting system
undertake?

(1) Automatically update individual supplier accounts once a purchase invoice is input to the
purchases system
(2) Automatically update the trade receivables general ledger account once a sales invoice is
raised in the sales system
(3) Automatically update the detailed listing of supplier balances on payment of a supplier
invoice.

1 and 3 only
1 and 2 only
1, 2 and 3
2 and 3 only

Question# 5
The following is extracted from Pierre's trial balance:

$
Capital 30,000
Sales ?
Purchases 34,000
Inventories 20,000
Trade receivables 28,000
Trade payables 19,000
Cash 11,000
What is the figure for sales?
$26,000
 $44,000
$22,000
$24,000

Question#6
The following statements relate to bank reconciliations:

(1) Unpresented cheques will result in the bank ledger account 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 statement(s) is/are correct?
Both statement 1 and statement 2
Neither statement 1 nor statement 2
Statement 1 only
Statement 2 only

Question#7
alik 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?
Dr Petty cash $91.78 Cr Bank $91.78

Dr Bank $91.78 Cr Petty cash $91.78

Dr Petty cash $58.22 Cr Bank $58.22

Dr Bank $58.22 Cr Petty cash $58.22

Question#8
Abimbola uses a computerised accounting system which is fully integrated with the
sales, purchases and inventories systems only. Abimbola has input a supplier invoice to
the purchases system with an incorrect, lower monetary amount. The invoice had a 30-
day credit term.
Which of the following statements is / are CORRECT?

(1) The accounting system will automatically correct any errors in the purchases system and
general ledger accounts
(2) Abimbola must create a correcting manual journal entry in the accounting system
(3) Abimbola must manually correct the detailed listing of supplier balances in the purchases
system
(4) Abimbola must pay the supplier the difference between the correct and incorrect amounts
immediately

2 only
2 and 3 only
1 only
2, 3 and 4

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?
Dr Discounts received $190 Dr Trade Payables $7,750 Cr Bank $7,940

Dr Trade payables $7,750 Cr Bank $7,750

Dr Trade payables $7,940 Cr Bank $7,940

Dr Trade payables $7,940 Cr Discounts received $190 Cr Bank $7,750

Question#10
Yara has a computerised accounting system. When a supplier invoice is entered in the
purchases module, it automatically updates the trade payables general ledger account,
the detailed listing of purchases and the detailed listing of supplier accounts. Manual
adjustments in either the general ledger account or the detailed listings do not
automatically update the other.

In performing a reconciliation of the general ledger to the detailed listings, Yara found
that:

(1) A cash payment to a credit supplier was coded to the wrong supplier
(2) A purchase invoice was not input for goods received on the final day of the accounting
period
Which of these errors require a manual journal entry to be posted to the trade
payables general ledger account?
1 only
2 only
Both 1 and 2
Neither 1 nor 2

Question#11
William had $10,000 in his cash ledger 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 ledger account at the end of November?
$6,500 Cr
$6,500 Dr
$13,500 Dr
$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?
Dr Bank $1,800 Cr Drawings $1,200 Cr Wages $600

Dr Bank $1,800 Cr Wages $1,800

Dr Wages $1,800 Cr Bank $1,800

Dr Drawings $1,200 Dr Wages $600 Cr Bank $1,800

Question#13

A business paid $3,000 to a credit supplier but the payment was debited to the account
of a different supplier in error.
What type of error is this?
Transpotiion error
Error of omission
Error of commission
Error of principle

Question#14
A credit entry in a 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

1, 2, 3 and 4
3 and 4 only
1 and 2 only
2 and 3 only

Question#15
Marlene 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?
BACS payment form
Petty cash form
Paying-in slip
Cheque requisition form

Question#16
Which of the following should be classified as liabilities?

(1) Trade receivables

(2) Sales tax payable
(3) Trade payables
(4) Drawings
 3 and 4
2 and 3
1 and 2
2 and 4

Question#17
The following is 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?
$100,000
$6,000
$34,000
$128,000

Question#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 general ledger?
Dr Cash $68.80 Dr Irrecoverable $103.20 Cr Trade $172.00
debts receivables

Dr Irrecoverable $103.20 Cr Trade payables $103.20

debts

Dr Cash $68.80 Dr Irrecoverable $103.20 Cr Trade payables $172.00

debts

Dr Irrecoverable $68.80 Cr Trade receivables $68.80

debts

Question#19
Which of the following are risks that an organisation 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

1, 2, 3 and 4
1, 2 and 3 only
1 and 2 only
3 and 4 only
Question#20
Guang commenced a food catering business and made payments for the following:
(1) A truck in which to cook in and serve food from
(2) Cooking equipment installed in the truck
(3) Ingredients
(4) Annual servicing of the truck by a mechanic

Which of the transactions are capitalised to property, plant and equipment?

1 and 2 only
1 and 4 only
2 and 3 only
1, 2 and 4

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 trade receivables be reported in Jemma's statement of financial
position as at 31 October 20X0?
As a liability of $136,044
As a liability of $138,644 and an asset of $2,600
As an asset of $136,044
As an asset of $138,644 and a liability of $2,600

Question#22
At 31 May 20X2, a business has the following amounts in its trial balance:
 Trial balance
Description Dr Cr
$ $
Plant and equipment 71,300
Trade receivables 24,400
Inventories 17,200
Loan payable 18,000
Trade and other payables 22,100
Bank 11,000
Capital introduced 29,500
Drawings 33,600
Profit for the year 65,900
Total 146,500 146,500

What are the total current assets of the business at 31 May 20X2?
$41,600
$52,600
$123,900
$112,900

Question#23
Which of the following statements best describes a payment made using a
Standing Order?
A regular amount paid which can be changed by the payer only
A regular amount paid which can be changed by either the recipient or payer
A regular amount paid which cannot be amended once created
A regular amount paid which can be changed by the recipient only
Question#24
Elizabeth is paid a basic wage of $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?
$120
$75
No bonus is payable
$1,620

Question#25

Joey operates a petty cash imprest system. The imprest amount is $100 and the total
value of petty cash vouchers in the petty cash box is $54. There has been no fraud or
error during the month.
What is the total amount of notes and coins in Joey’s petty cash box?
$154
$46
$54
$100

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?
Neither statement 1 nor statement 2
Statement 2 only
Statement 1 only
Both statement 1 and statement 2

Question#27
Dar is currently in correspondence with a supplier in relation to an unresolved dispute.
Which of the following would be a data file where the correspondence is held?

(1) Active
(2) Temporary
(3) Permanent
(4) Non-active
1, 2 and 3
1 and 3 only
2, 3 and 4
1 and 2 only

Question#28
One of 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 journal entry to record this payment in Jean's accounts?
Dr Cash $2,209 Cr Trade receivables $1,880 Cr Sales tax $329

Dr Cash $2,209 Cr Sales $1,880 Cr Sales tax $329

 Dr Cash $2,209 Cr Sales $2,209

Dr Cash $2,209 Cr Trade receivables $2,209

Question#29
Why should all journal entries be accompanied by a narrative?
As it is a legal requirement in most regimes
For use by investors and creditors
As it is a requirement of IFRS Accounting Standards
For audit and control 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?
Dr Sales $3,300 Cr Irrecoverable debts $3,300

Dr Irrecoverable debts $3,300 Cr Trade receivables $3,300

Dr Irrecoverable debts $3,300 Cr Sales $3,300

Dr Trade receivables $3,300 Cr Irrecoverable debts $3,300

Question#31
Jessie withdrew cash from their business bank account during the first accounting
period for their own personal use. The balance in the drawings general ledger account
at year end is $1,200.
Which of the following correctly describes how this account will be balanced off?
 A balance cleared down of $1,200 will be entered on the credit side of the drawings general
ledger account and the trial balance will show the credit balance
A balance cleared down of $1,200 will be entered on the credit side of the drawings general
ledger account and the trial balance will show the debit balance
A balance cleared down of $1,200 will be entered on the debit side of the drawings general
ledger account and the trial balance will show the debit balance
A balance cleared down of $1,200 will be entered on the debit side of the drawings general
ledger account and the trial balance will show the credit balance

Question#32
Which of the documents below will show details of BACS payments?
Petty cash voucher
Paying-in slip
Bank statement
Standing order mandate

Question#33
James makes a payment of $6,256 to Eric in full settlement of an invoice for $6,800.
The $544 difference relates to a settlement discount received from Eric.
How should James record the discount of $544?
Dr Payables Cr Purchases

Dr Purchases Cr Payables

Dr Discounts received Cr Payables

Dr Payables Cr Discounts received

Question#34
Which company policy sets out the length of time different types of information
should be kept?
Sustainability policy
Corporate governance policy
Retention policy
Transaction policy

Question#35
Which one of the following is the correct journal entry to record credit
purchases?
Dr Purchases Cr Trade payables

Dr Purchases Cr Bank

Dr Bank Cr Purchases

Dr Trade payables 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

1, 3 and 4
3 and 4 only
2 and 3 only
1, 2 and 3
Question#37
Which of the following errors would be revealed in the trial balance?
A supplier invoice for insurance costs was incorrectly coded as cost of sales
A manual journal entry to recognise purchases was recognised by debiting bank and crediting
purchases
A manual journal entry to recognise bank charges was debited with £420 but credited with
$240 - the difference was automatically recognised in a temporary suspense account
Bank charges discovered during the performance of a bank reconciliation were omitted from
the general ledger

Question#38
A trader who is registered for sales tax sold goods for $177,425. This includes sales tax
of $26,425
Which of the following journal entries would correctly record these sales?
Dr Trade receivables $151,000 Dr Sales tax $26,425 Cr Sales $177,425

Dr Trade receivables $177,425 Cr Sales tax $26,425 Cr $151,000

Sales

Dr Trade receivables $177,425 Cr Sales $177,425

Dr Trade receivables $151,000 Cr Sales $151,000

Question#39
Tshepiso borrowed $4,000 from a bank for business purposes. They then spent $2,000
of this borrowing on inventories. $3,000 of cash was generated from the sale of goods.
What are Tshepiso’s general ledger account balances after processing the above
transactions?
 Capital $3,000 Dr
Loan payable $2,000 Dr
Bank $5,000 Cr

Bank $5,000 Dr
Loan payable $4,000 Dr
Capital $1,000 Cr

Bank $5,000 Dr
Loan payable $2,000 Dr
Capital $1,000 Cr

Capital $1,000 Dr
Loan payable $4,000 Dr
Bank $5,000 Cr

Question#40
t the end of May there is a credit balance in Kwai's bank ledger account of $839. On
receiving his bank statement Kwai identified the following items:

(1) A receipt paid into the bank of $1,212 had been recorded in the bank ledger account as
$2,121
(2) Bank charges of $63 have not been recorded in the bank ledger account
What should the bank ledger account balance be after accounting for these
items?
$1,811 Cr
$133 Dr
$7 Dr
$1,685 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?
$28,350
$27,000
$25,650
$31,050

Question#42
Khayrat is registered for sales tax and the rate is 20%. They are reviewing the total cash
receipts recognised in the bank general ledger account:

(1) $480 received from credit customers

(2) $240 received from cash sales
Which of the following statements about these two transactions is/ are CORRECT?

(1) The $240 of cash sales include $40 of sales tax

(2) The $240 of cash sales include $48 of sales tax
(3) The receipts from credit customers reduces the trade receivables general ledger account by
the net amount of $400
(4) The receipts from credit customers reduces the trade receivables general ledger account by
the gross amount of $480
1 only
1 and 4 only
1, 3 and 4
2 and 3

Question#43
Amy's sales 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?
Dr Trade receivables $1,034 Cr Returns inwards $880 Cr Sales tax $154

Dr Returns inwards $880 Dr Sales tax $154 Cr Trade receivables $1,034

Dr Trade receivables $1,034 Cr Returns inwards $1,034

Dr Returns inwards $880 Cr Trade receivables $880

Question#44
Taylor purchased goods for their own personal use. They withdrew cash from the
business bank account to pay for these goods.
What is the manual journal entry required to recognise this transaction?
Dr
Drawings
Cr
Purchases

Dr Bank
Cr
Drawings

Dr
Drawings
Cr
Bank

Dr
Purchases
Cr
Drawings

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

(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 terms
What was the balance on his bank ledger account at 31 May 20X9?
$3,960 Cr
$5,660 Dr
$5,660 Cr
$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?

Banking of the proceeds from the sale of motor vehicles
Purchase of motor vehicles on credit
Receipt of a bank loan to purchase motor vehicles
Purchase of motor vehicles paid for by cheque
Question#47
What is the correct journal entry to record a receipt from a customer which
includes a settlement discount given to a customer who was not expected to take
advantage of the discount when the sale was made?
Dr Bank Cr Trade receivables Cr Sales

Dr Bank Dr Sales Cr Trade receivables

Dr Sales Cr Trade receivables

Dr Trade receivables Cr Sales

Question#48
Ping maintains a detailed account for each of their suppliers. At year end, the account of
one supplier showed a credit balance of $19,000. A review of the account revealed two
errors:

(1) A purchase invoice for $8,000 was entered in the computerised

accounting system as $800
(2) A manual journal entry for a $500 trade discount received was not
processed and so was omitted entirely

The total of the detailed accounts reconciles with the trade payables general ledger
account
What is the adjusted balance on this individual supplier’s account after the above
errors have been corrected?
$25,700
$12.300
$26,700
$11,300

Question#49
What is the main purpose of maintaining a separate list of individual
customer ledger accounts if a trade receivables ledger account is also
maintained?
To form part of the general ledger double entry system
To keep a record of transactions with and amounts owed by individual customers
To quickly assess the amounts owed by all credit customers
To record journal entries and adjustments

Question#50
Kohinur maintains a detailed account for each of their suppliers. At year end, the account
of one supplier showed a credit balance of $11,000. A review of the account revealed two
errors:

(1) A purchase invoice for $3,000 was not input to the computerised
accounting system
(2) A $890 payment to a supplier was input as $980 on both sides of
the manual journal entry recognising this
What is the adjusted balance on this individual supplier’s account after the above
errors have been corrected?
$7,910
$14,090
$8,090
$13,910
Question#