Tag: Accountants

Alex received a statement from its supplier Lucy, showing a balance to be paid of £8,950.

Alex’s payables ledger account for Lucy shows a balance due to Lucy of £4,140.

Investigation by the chief accountant Stuart reveals the following:

1  Cash paid to Lucy of £4,080 by Alex has not been recorded by Lucy.

2  Alex has not adjusted the ledger account for £40 of cash discount disallowed by Lucy.

3.  Goods returned by Lucy £380 have not been recorded by Alex.

What discrepancy remains between Alex’s and Lucy’s records after allowing for these items?

Select ONE answer:

1. £9,310
2. £1,070
3. £390
4. £310

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Alex’s balance £4,140 + Discount disallowed £40 + Cash paid £4,080 + Goods returned £380 = £8,680 – Lucy Balance of £8,950 means a difference of £310 remaining

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The trial balance of Alex Ltd did not agree and a suspense account was opened for the difference.

Which TWO of the following errors found would require an entry to the suspense account as part of the process of correcting them?

A  A cash refund to a customer was correctly treated in the cash book and then credited to the receivables control account

B  The sale of goods to an employee for £300 was recorded by debiting sales and crediting payables

C  The discount received column total in the cash book had been credited in error to the discount allowed account

D  Some cash received from customers had been used to pay sundry expenses. It was debited to expenses and credited to the cash book

E  £5,800 paid for plant repairs was correctly treated in the cash book and then credited to plant and equipment asset account

Select ONE answer:

1. A&B
2. A&C
3. A&D
4. A&E

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – A&E – The transactions should both have been debited. In (B), (C) and (D) the double entry is complete though not correct.

This work is licensed under a Creative Commons Attribution 4.0 International License.

The cash book shows a bank balance of £5,675 overdrawn at 31 August 2023

It is subsequently discovered that a standing order payment for £125 has been entered twice, and that a dishonoured cheque for £450 has been debited in the cash book instead of credited.

The correct bank balance should therefore be?

Select ONE answer:

1. £5,100 overdrawn
2. £6,000 overdrawn
3. £6,250 overdrawn
4. £6,450 overdrawn

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Balance b/d £(5,675) Add: standing order £125 Less: dishonoured cheque (450 x 2) worth (£900) = £(6450)

This work is licensed under a Creative Commons Attribution 4.0 International License.