Tag: Financial Accounting

Alex’s cash book at 31 December 2023 showed a bank balance of £565 overdrawn.

On comparing this with the bank statement at the same date, he discovered the following.

A  A cheque for £57 drawn by him on 29 December 2023 had not yet been presented for payment.

B  A cheque for £92 from a customer, which was paid into the bank on 24 December 2023, has been dishonoured on 31 December 2023.

The correct balance in the cash book as at 31 December 2023 is?

Select ONE answer:

1. £473 DR
2. £714 CR
3. £657 CR
4. £473 CR

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 – (£565) – £92 = (£657). The cheque for £57 is already included in the cash book.
4. Not correct

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The following payables control account for an entity where all goods are purchased on credit contains some errors.

PAYABLES CONTROL ACCOUNT

DR   Purchases                         £481,600

DR  Discounts received             £6,300

DR  Contras with receivables  £2,100

DR  Closing balance                 £205,200

DR  Total                               £695,200

                                                            CR  Opening balance          £192,300

                                                            CR  Cash paid to suppliers  £494,200

                                                            CR  Cash refunds                 £8,700

                                                            CR  Total                           £695,200

What will the closing balance be when the errors have been corrected?

Select ONE answer:

1. £180,000
2. £184,200
3. £162,600
4. £192,600

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 –   DRs Cash paid to suppliers £494,200, Contras with receivables £2,100, Discounts received  £6,300  Total £682,600. CRs  Opening balance £192,300, Purchases £481,600, Cash refunds £8,700  Total £682,600
2. Not correct
3. Not correct
4. Not correct

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

Which of the following errors would still result in a balanced trial balance?

Select ONE answer:

1. The opening inventory balance was omitted from the nominal ledger.
2. A transposition error was made when posting cash received from a credit customer to the receivables ledger.
3. The discounts received balance was listed as a debit on the trial balance.
4. The total column of the cash payments book was miscast.

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  –  As the receivables ledger is not part of the nominal ledger a transposition error made when posting cash received from a credit customer to it does not affect the nominal ledger.
3. Not correct
4. Not correct

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

The credit side of a trial balance totals £400 more than the debit side.

Which of the following errors would fully account for the difference?

Select ONE answer:

1. £200 paid for coffee machine repairs has been correctly entered in the cash book and credited to the coffee machine account.
2. Discount received £200 has been debited to the discount allowed account.
3. A receipt of £400 for commission receivable has been omitted from the records.
4. The petty cash balance of £200 has been omitted from the trial balance.

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 – The payment should have been debited not credited so the credit side is too high by £400. In (2) discount received £200 has been debited when it should have been credited, so debits are £400 higher. (3) has no effect on the TB balancing. (4) means that credits are too high, but only by £200
2. Not correct
3. Not correct
4. Not correct

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

Which of the following errors would result in a trial balance imbalance?

Select ONE answer:

1. The discounts allowed balance was listed as a credit on the trial balance
2. Drawings for the last month of the year had been posted to the sundry expenses account
3. A contra settlement had been recorded only in the sales and purchases ledgers
4. Capital expenditure had been posted to repairs

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 – For the other items, the trial balance will balance because: Drawings and sundry expenses are both debits (2), Both debits and credits suffer an omission in (3), capital expenditure and repairs are both debits (4).
2. Not correct
3. Not correct
4. Not correct

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