HKMA David Li Kwok Po College

S4 Business, Accounting and Financial Studies

Accounting Classwork 1

Name: _____________________ Class: ________( ) Mark: ________/_22

A. Multiple choice questions (4 marks)

1. 2. 3. 4.

1. The following information relates to Paul Enterprise for the year ended 30 June 2010:
Dr Cr
$ $
Returns 23,640 32,460
Purchases and sales 368,440 765,490
Carriage outwards 2,340
Carriage inwards 1,230
Opening inventory 56,430

Given that the gross profit for the year was $403,760, the closing inventory would be
A. $44,440.
B. $55,550.
C. $56,550.
D. $66,660.

2. The following information relates to Matthew's business for the year ended 31 December 2009:
$
Opening inventory 37,200
Carriage inwards 3,300
Carriage outwards 4,400
Purchases 567,000
Sales 934,560
Returns inwards 34,750
Returns outwards 43,570
Closing inventory 111,600

The gross profit/loss for the year would be:

A. Gross loss $298,680
B. Gross profit $447,480
C. Gross profit $450,780
D. Gross profit $429,840

3. In accounting records, sales are recorded at ________________, while purchases are recorded
at _________________.
A. cost; the selling price
B. cost; cost
C. the selling price; cost
D. the selling price; the selling price

4. If opening inventory is $34,776, the cost of goods sold is $366,665, and closing inventory is
$85,432, purchases for the year would be
A. $417,321.

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 B. $316,009.
C. $246,457.
D. $486,873.

B. Short Question (17 marks)

Michael Lee, a sole proprietor, extracted the following trial balance from his books on 30
April 2010:
Dr Cr
$ $
Accounts payable 17,280
Accounts receivable 12,820
Advertising 9,840
Bank overdraft 6,200
Capital 475,470
Carriage inwards 2,220
Carriage outwards 2,090
Motor car 35,700
Drawings 102,960
Water and electricity 10,690
Insurance 7,850
Overdraft interest 280
Packing charges for goods 600
Inventory as at 1 May 2009 39,790
Premises 318,760
Purchases 435,170
Rent revenue 20,660
Motor expenses 11,850
Returns outwards 9,970
Sales 565,950
Telephone and internet expenses 3,410
Returns inwards 1,500
Office equipment 100,000
1,095,530 1,095,530

Inventory as at 30 April 2010 was valued at $37,190.

Required:
Draw up an income statement for the year ended 30 April 2010 and a balance sheet as that
date (vertical style). (16 marks)

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