1. Which of the following belongs to an expense account in a business?

a. Advertising
b. Bank overdraft
c. Capital
d. Commission received
2. Bank overdraft is classified as
a. Current asset
b. Current liability
c. Non-current assets
d. Non-current liability
3. Which of the following business transactions is an example of purchases?
a. Bought an office desk on credit from Zimbabwe Furnishers for $875
b. Bought stationary for resale from Tonderai Booksellers for $550
c. Sold an old van on credit to R. Dondo for $720
d. Sold goods on credit to K. Tavengwe for $720
4. Which of the following does not appear in the income statement?
a. Commission received
b. Interest earned
c. Rent received
d. Trade receivables
5. What is the effect of the following transactions in the financial statements?
Owner took goods worth $550 for own use
Increase decrease
a. Purchases by $550 drawings by $550
b. Drawings by $550 sales by $550
c. Drawings by $550 purchases by $550
d. Sales by $550 drawings by $550
6. Working capital is
a. The amount of capital used to start a business
b. Capital, less drawings and loans
c. The difference between current assets and current liabilities
d. The difference between non-current assets and current assets
7. A credit balance of $800 on the bank column of the cash book would mean
a. The business has cash at bank $800
b. The business has an overdraft at bank
c. The bookkeeper has made a mistake
d. The bookkeeper has stolen $800 cash
8. A debit balance in a bank account represents
a. Accruals
b. Bank overdrafts
c. Cash at bank
d. Prepayments
9. The difference between current assets and current liabilities is
a. Capital
b. Working capital
c. Liability
d. Net profit
10.The bank column of your cash book shows a credit balance. This would
appear in the balance sheet as
a. Current assets
b. Long term liability
c. Current liability
d. Fixed assets
11.Choose the correct answer from the following options
Drawings account is
a. Really an expense account
b. Really an asset account
c. Really a part of the capital account
d. A liability
12. Net profit is calculated in the
a. Trading account
b. Profit and loss account
c. Trial balance
d. Balance sheet.
13. The descending order in which current assets should be shown in the
balance sheet is
a. Stock, Debtors, Bank, Cash
b. Cash, Bank, Debtors, Stock
c. Debtors, Stock, Bank, Cash
d. Stock, Debtors, Cash, Bank.
14. Given figures showing: Sales £8,200; Opening stock £1,300; Closing stock
£900; Purchases£6,400; Carriage inwards £200, the cost of goods sold figure
is
a. £6,800
 b. £6,200
c. £7,000
d. Another figure.
15.A debit balance of £100 in a cash account shows that
a. There was £100 cash in hand
b. Cash has been overspent by £100
c. £100 was the total of cash paid out
d. The total of cash received was less than £100.
16. £50 cash taken from the cash till and banked is entered
a. Debit cash column £50: Credit bank column £50
b. Debit bank column £50: Credit cash column £50
c. Debit cash column £50: Credit cash column £50
d. Debit bank column £50: Credit bank column £50.
17. A credit balance of £200 on the cash columns of the cash book would mean
a. We have spent £200 more than we have received
b. We have £200 cash in hand
c. The bookkeeper has made a mistake
d. Someone has stolen £200 cash.
18.What is the other name for subsidiary book?
a. Invoices
b. Source documents
c. Book of prime entry
d. Ledgers
19.Which of the following is correct?
a. Profit does not alter capital
b. Profit reduces capital
c. Capital can only come from profit
d. Profit increases capital
20.Depreciation is
a. The amount spent to buy a fixed asset
b. The salvage value of a fixed asset
c. The part of the cost of the fixed asset consumed during its period of use
by the firm
d. The amount of money spent in replacing assets.
21.A firm bought a machine for £3,200. It is to be depreciated at a rate of 25
per cent using
the Reducing Balance Method. What would be the remaining book value
 after 2 years?
a. £1,600
b. £2,400
c. £1,800
d. Some other figure.
22.A firm bought a machine for £16,000. It is expected to be used for 5 years
then sold for
£1,000. What is the annual amount of depreciation if the straight line
method is used?
a. £3,200
b. £3,100
c. £3,750
d. £3,000.