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ACCOUNTING MOCK-P1

1. A companys trial balance failed to agree, the totals being:

Debit 815,602
Credit 808,420
Which one of the following errors could fully account for the difference?
A The omission from the trial balance of the balance on the insurance expense
account 7,182 debit
B Discount allowed 3,591 debited in error to the discount received account
C No entries made in the records for cash sales totalling 7,182
D The returns outwards total of 3,591 was included in the trial balance as a debit
balance

2. Which of the following items could appear on the credit side of a Debtors ledger
control account?
(1) Cash received from customers
(2) Bad debts written off
(3) Increase in allowance for doubtful debts
(4) Discounts allowed
(5) Sales
(6) Credits for goods returned by customers
(7) Cash refunds to customers
A (1), (2), (4) and (6)
B (1), (2), (4) and (7)
C (3), (4), (5) and (6)
D (5) and (7)

3. A business has compiled the following information for the year ended 31 October 2002:

Opening inventory 386,200
Purchases 989,000
Closing inventory 422,700
The gross profit as a percentage of sales is always 40%
Based on these figures, what is the sales revenue for the year?
A 1,333,500
B 1,587,500
C 2,381,250
D The sales revenue figure cannot be calculated from this information

4. Which of the following correctly describes the imprest system of operating petty
cash?
A The petty cash float is replenished by regular periodic transfers of equal amount.
B The petty cash float is replenished by periodic transfers of the actual expenditure in
the period.
C All expenses must be supported by a properly authorised voucher.
D Petty cash is operated outside the business double entry accounting system.

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5. In preparing a companys bank reconciliation statement at March 2003, the following items
are causing the difference between the cash book balance and the bank statement
balance:
(1) Bank charges 380
(2) Error by bank 1,000 (cheque incorrectly debited to the account)
(3) Lodgments not credited 4,580
(4) Outstanding cheques 1,475
(5) Direct debit 350
(6) Cheque paid in by the company and dishonored 400
Which of these items will require an entry in the cash book?
A 2, 4 and 6
B 1, 5 and 6
C 3 and 4
D 3 and 5

6. Eds year end is 30 September. He depreciates office furniture at 15% per annum on the
straight line basis. A full years depreciation is charged in the year an asset is purchased,
and no depreciation is charged in the year it is sold. In March 2005 Ed bought office
furniture for $80,000.
If he sells the office furniture for $39,000 in July 2008, what will be Eds profit or loss
on disposal?
A a profit of $7,000
B a loss of $7,000
C a profit of $5,000
D a loss of $5,000

7. Which of the following statements describes current assets?

A assets which are currently located on the business premises
B assets which are used to conduct the organizations current business
C assets which are expected to be converted into cash in the short term
D assets which are not expected to be converted into cash in the short term

8. Which of the following is the correct journal entry to record a credit note issued to a
customer for goods returned?

A Debit Sales returns

Credit Cash
B Debit Cash
Credit Sales returns
C Debit Trade receivables
Credit Sales returns
D Debit Sales returns
Credit Trade receivables

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9. In the year to 31 May 2008, Lesleys sales totaled $600,000 and her cost of sales totalled
$480,000
What are the correct figures for Lesleys mark up and margin?
Mark up Margin
A 25% 25%
B 25% 20%
C 20% 25%
D 20% 20%

10. At his year end, Keith had accrued expenses totalling $4,176 and prepaid expenses
totalling $3,718.
How should the accrued and prepaid expenses be reported on Keiths statement of
financial position (balance sheet)?
A as a current asset of $458
B as a current liability of $458
C as a current asset of $4,176 and a current liability of $3,718
D as a current asset of $3,718 and a current liability of $4,176

11. Which of the following is the correct formula to calculate cost of sales?
A Purchases Opening inventory Closing inventory
B Purchases + Opening inventory + Closing inventory
C Purchases Opening inventory + Closing inventory
D Purchases + Opening inventory Closing inventory

12. Into which income statement columns of the extended trial balance should the
balances for sales returns and purchases returns be extended?
Sales returns Purchases returns
A debit debit
B debit credit
C credit debit
D credit credit

13. In June 2008 Laura bought goods for $12,000. She paid $11,000 of this by cheque and
agreed a 30 day credit period for the balance. She intends to buy more goods for $13,000
in July 2008.
What value should be reported for Lauras payables at 30 June 2008?
A $25,000
B $14,000
C $13,000
D $1,000

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14. The bookkeeper of Peri made the following mistakes:

Discount allowed $3,840 was credited to Discounts Received account.
Discount received $2,960 was debited to Discounts Allowed account.
Discounts were otherwise correctly recorded.
Which of the following journal entries will correct the errors?
Dr Cr
$ $
A Discount allowed 7,680
Discount received 5,920
Suspense account 1,760

B Discount allowed 880

Discount received 880
Suspense account 1,760

C Discount allowed 6,800

Discount received 6,800

D Discount allowed 3,840

Discount received 2,960
Suspense account 880

15. Avalon gives his customers individual trade discounts from the list price and a general 5%
cash discount for all invoices settled within 7 days of issue. A new customer, Nolava
negotiates a 25% trade discount. His transactions during June are:
June 12 Buys goods with a 5,000 list price
June 15 Returns goods with a 1,000 list price as faulty
June 16 Pays half of the net balance on his account
How much does Nolava owe Avalon at the end of June?
A 1,425
B 1,500
C 2,000
D 2,850

16. Manish buys goods on credit from Lisa but finds that some of them are faulty.
What document would Manish return to Lisa with the faulty goods?
A Statement
B Debit note
C Sales invoice
D Purchase invoice

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17. Which of the following items would be likely to be paid out of petty cash?
(i) Payment to window cleaner 10
(ii) Hire purchase payment for a delivery van 123
(iii) A payment for postage stamps 1160
(iv) A payment to a supplier for goods bought on credit of 65
A All of the above
B i, iii and iv
C i only
D i and iii

18. Louise introduces her car into her business.

Which parts of the business accounting equation will change?
A Assets and capital
B Capital and profit
C Liabilities and assets
D Capital and liabilities

19. Which of the following should be classified as current liabilities?

(1) Trade debtors
(2) VAT payable
(3) Trade creditors
(4) Drawings
A 1 and 2
B 2 and 3
C 3 and 4
D 2 and 4

20. Which item will appear as a debit balance in the ledger accounts?
A Capital
B Bank overdraft
C Creditors
D Stock

21. Which of the following balance sheet summaries is correct?

Capital Assets Liabilities
A 35,000 24,000 11,000
B 21,000 15,000 36,000
C 25,000 33,000 8,000
D 33,000 25,000 8,000

22. Joanne has just started-up a business. She introduced 10,000 of her own savings,
equipment worth 2,500 and obtained a bank loan of 1,000.
What is the correct balance on Joannes capital account following these
transactions?
A 10,000
B 13,500
C 12,500
D 11,000

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23. Which of the following is the correct posting to record a cash purchase of 300 from
Amdale?
A Debit Purchases 300 Credit Amdale 300
B Debit Amdale 300 Credit Purchases 300
C Debit Purchases 300 Credit Bank 300
D Debit Bank 300 Credit Purchases 300

24. Which of the following items would appear on opposite sides of a trial balance?
A Stock and Drawings
B Sales and Returns out
C Carriage in and Carriage out
D Debtors and Returns out

25. Which of the following errors would be found by extracting a trial balance?
A A transaction has been completely missed in the accounts
B The double entries have been made the wrong way round
C Different figures have been entered for the debit and credit entries
D An expense item has been posted to a fixed asset account.

26. Which one of the following is the correct posting from the purchase day book?
A Dr General ledger purchase account,Cr Suppliers accounts in purchase ledger
B Dr General ledger purchase account, Cr Cash book
C Dr Suppliers accounts in purchase ledger, Cr General ledger purchase account
D Dr Cash book, Cr General ledger purchase account

27. Jonathan sends a debit note to one of his suppliers.

In which of Jonathans books of prime entry would this be recorded?
A Sales
B Purchases
C Sales returns
D Purchase returns

28. In which books of prime entry would the following transactions be entered?
A credit sale for 387 and a cash sale of 200 less 10% discount for cash payment.
A The cash book and sales day book
B The petty cash book and sales day book
C The purchase day book and sales day book
D The journal and cash book

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29. Vics sales ledger balances add up to 50,000, which does not agree with his debtors
control account
What should the total of the balances on his sales ledger be after correcting the
following errors?
1 A bank credit transfer from a credit customer of 750 was not recorded in the sales
ledger
2 A contra entry of 2,000 was entered in the control account but not in the sales and
purchase ledgers.
A 52,750
B 50,000
C 49,250
D 47,250

30. Which of the following would normally be entered through the journal?
A Credit purchase returns
B Transfers between accounts
C Receipts from credit customers
D Expense payments

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