Tag: Extended Trial Balance

Recording the purchase of computer stationery by debiting the computer equipment account would result in?

Select ONE answer:

1. An overstatement of profit and an overstatement of non-current assets
2. An understatement of profit and an overstatement of non-current assets
3. An overstatement of profit and an understatement of non-current assets
4. An understatement of profit and an understatement of non-current assets

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 1

1. Correct –> An expense has been posted as a non-current asset when it should have been a deduction from profit, non-current assets are overstated as a result.
2. Not correct
3. Not correct
4. Not correct

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A supplier sends you a statement showing a balance outstanding of £14,350.

Your own records show a balance outstanding of £14,500.

The reason for this difference could be that?

Select ONE answer:

1. The supplier sent an invoice for £150 which you have not yet received
2. The supplier has allowed you £150 cash discount which you omitted to enter in your ledgers
3. You have paid the supplier £1 50 which he has not yet accounted for
4. You have returned goods worth £150 which the supplier has not yet accounted for

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 2

1. Notcorrect
2. Correct –> 1, 3 and 4 would make the supplier’s statement £150
3. Not correct
4. Not correct

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

All Elmo’s sales and purchases carry VAT at 17.5%.

A customer has just returned goods sold for £230 plus VAT.

The double entry for this transaction is?

Select ONE answer:

1. Debit Receivables control £270.25, Credit VAT control £40.25, Credit Sales £230.00
2. Debit Sales £270.25, Credit Receivables control £270.25
3. Debit Sales £230.00, Debit VÁT Control £40.25, Credit Receivables control £270.25
4. Debit Receivables control £230.00, Debit VAT control £40.25, Credit Sales £270.25

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 3

1. Not correct
2. Not correct
3. Correct –  Debit Sales £230.00, Debit VAT Control £40.25, Credit Receivables control £270.25
4. Not correct

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

Identify whether the following occurrences might explain the existence of a credit balance on a customer’s receivables ledger account.

The bookkeeper posted a total from the sales day book to the receivables control account twice by mistake.

A  Would explain a credit balance

B  Would not explain a credit balance

The customer failed to take account of a credit note when payıng an invoice.

C  Would explain a credit balance

D  Would not explain a credit balance

Select ONE answer:

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

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 3

1. Not correct
2. Not correct
3. Correct – False this is a control account posting therefore does not affect the individual balances in the ledger.  True – the customer would overpay if it ignored a credit note.
4. Not correct

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