FACULTY OF ACCOUNTING AND AUDITING

PILOT TEST

Unit: PRINCIPLES OF ACCOUNTING. Unit Code: BSA2001-E

I. Multiple Choice Question:

Students must write the answers in the following table:

Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10

Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 Q19 Q20

1. A building is offered for sale at $500,000 but is currently assessed at $400,000. The purchaser
of the building believes the building is worth $475,000, but ultimately purchases the building for
$450,000. The purchaser records the building at:
a. $50,000.
b. $400,000.
c. $450,000.
d. $475,000.
e. $500,000.
2. On December 30 of the current year, KPMG signs a $150,000 contract to provide accounting
services to one of its clients in the next year. KPMG has a December 31 year-end. Which
accounting principle or assumption requires KPMG to record the accounting services revenue
from this client in the next year and not in the current year?
a. Business entity assumption
b. Revenue recognition principle
c. Monetary unit assumption
d. Cost principle
e. Going-concern assumption
3. If the assets of a company increase by $100,000 during the year and its liabilities increase by
$35,000 during the same year, then the change in equity of the company during the year must
have been:
a. An increase of $135,000.
b. A decrease of $135,000.
c. A decrease of $65,000.
d. An increase of $65,000.
e. An increase of $100,000.
4. Brunswick borrows $50,000 cash from Third National Bank. How does this transaction affect
the accounting equation for Brunswick?
a. Assets increase by $50,000; liabilities increase by $50,000; no effect on equity.
b. Assets increase by $50,000; no effect on liabilities; equity increases by $50,000.
c. Assets increase by $50,000; liabilities decrease by $50,000; no effect on equity.
d. No effect on assets; liabilities increase by $50,000; equity increases by $50,000.
e. No effect on assets; liabilities increase by $50,000; equity decreases by $50,000.
5. Geek Squad performs services for a customer and bills the customer for $500. How would
Geek Squad record this transaction?
a. Accounts receivable increase by $500; revenues increase by $500.
b. Cash increases by $500; revenues increase by $500.
c. Accounts receivable increase by $500; revenues decrease by $500.
d. Accounts receivable increase by $500; accounts payable increase by $500.
e. Accounts payable increase by $500; revenues increase by $500.
6. Net income will result during a time period when:
(a) assets exceed liabilities.
(b) assets exceed revenues.
(c) expenses exceed revenues.
(d) revenues exceed expenses.
7. Adjustments for unearned revenues:
(a) decrease liabilities and increase revenues.
(b) increase liabilities and increase revenues.
(c) increase assets and increase revenues.
(d) decrease revenues and decrease assets.
8. According to IAS1, Presentation of Financial Statements, compliance with IFRS Standards
will normally ensure that:
a. The entity’s inventory is valued at net realizable value
b. The entity’s assets are valued at their break-up value
c. The entity’s financial statements are prepared on the assumption that it is a going concern
d. The entity’s financial position, financial performance and cash flows are presented fairly
9. Which of the following accounts is not shown on the Statement of Owner’s Equity?
a. Owner’s Capital
b. Revenues
c. Expenses
d. Withdrawals
10. The withdrawal of cash by the owner will
a. decrease net income.
b. increase liabilities.
c. not affect total assets.
d. decrease owner’s equity.
11. When a service has been performed, but no cash has been received, which of the following
statements is true?
a. The entry would include a debit to Accounts Receivable.
b. The entry would include a debit to Accounts Payable.
c. The entry would include a credit to Unearned Revenue.
d. No entry is required until the cash is received.
12. An $800 debit item is accidentally posted as a credit. The trial balance column totals will
therefore differ by
a. $0
b. $400
c. $800
d. $1,600
13. Which of the following is a business event that is not considered a recordable transaction?
a. A company receives a product previously ordered.
b. A company pays an employee for work performed.
c. A customer inquiry about the availability of a service.
d. A customer purchases a service.
14. Which of the following is not a Book of Prime Entry?
a. Sales Journal
b. Cashbook
c. Purchases Journal
d. Sales Ledger
15. A credit customer returned some damaged goods to the business. This transaction will record
in:
a. Sales Return Journal
b. Purchase Return Journal
c. Purchase Journal
d. Sales Journal
16. A receipt is used as a source document for
a. Credit sales
b. Credit purchases
c. Payment of cash
d. Return of goods to supplier
17. The controller for Tires and More, Inc. has recorded the following transactions during the
month: the purchase of equipment for $8,500 cash; payment of $6,300 for 3 months rent; and,
collection of $2,400 from a customer for services performed. At the beginning of the month the
owner established the business by making an investment of $15,000 cash. What is the balance in
the Cash account at the end of the month, and is the balance a debit or a credit?
a. $2,600 debit.
b. $2,600 credit.
c. $6,800 debit.
d. $15,200 debit.
18. A sole trader is £5,000 overdrawn at her bank and receives £1,000 from a credit customer in
respect of its account. Which element(s) of the accounting equation will change due to this
transaction?
a. Assets and liabilities
b. Liabilities only
c. Assets only
d. Assets, liabilities and capital
19. A sole trader had trade receivables of £2,700 at 1 May and during May made cash sales of
£7,200, credit sales of £16,500 and received £15,300 from his credit customers. The balance on
his trade receivables account at the end of May was: (2,700 + 1,200)
a. £1,500
b. £3,900
c. £8,700
d. £11,100
20. Information is relevant if it is capable of making a difference in the decisions made by users.
According to the IASB's Conceptual Framework, financial information is capable of making a
difference in decisions if it has which of the following?
1 Predictive value
2 Comparative value
3 Historic value
4 Confirmatory value

a. 1 and 3 only
b. 2 and 4 only
c. 1 and 4 only
d. 2 and 3 only

II. Short question:

Explain why investing (assets) and financing (liabilities and equity) totals are always equal.
III. Exercises:
Demo Exercise 1:
Andrew Joel is a market trader. The company’s trial balance as at 31 December 20X8, appears
below:
  $ $
Sales 71,600
 Purchases 29,050
Salaries 4,650
Rent and business rates 2,500
Insurances - Building 1,500
Insurances - Vehicles 2,400
Motor expenses 21,860
Fixtures 35,000
Cash in hand 5,000
3,500
Cash at bank
Drawings 24,000
Capital 61,810
Account Receivable 23,450
Account Payable 19,500
152,910 152,910
During the month of January, the company completed the following transactions:
Januar Transfers $750 of his savings into a business bank account
y
Borrows $3000 from LLoydwest Bank, repayable in three years’ time
Buys goods for resale on time, $78 from S.Holmes
Buys goods for resale, paying cash $55
Goods returned by us to S.Holmes, $18
Sale goods $630, customer paying by cheque $400
Sale goods on time, $98 to D.Moore
Goods returned to us by D.Moore $20
Pays staff wages for January, $410
Purchases goods fruom C.Swiff $500, less 10% trade discount, pays
by cash
Insurance is still unexpired of $3,000 (in which building: $1,000;
Vehicles: $2,000).
Inventory on 31 January 20X9 is 7,547
Required:
a. Record all the transactions.
b. Prepare a Trial Balance as at the end of the month.
c. Prepare Income Statement for the month.
d. Prepare Balance sheet at the end of the period.

Demo Exercise 2:
Andrew Joel is a market trader. On the December 1, 20X8, he opened a hotel named Queen
Hotel. The company’s trial balance as at 31 December 20X8, appears below:
Rent revenue (lia) 64,100
Unearned Rent
29,050
(liabilities)
 Supplies 4,650
Motor expenses 1,860
Insurances - Vehicles 2,400
Motor vehicles 20,000
Fixtures 35,000
Cash in hand 34,050
Drawings (capital) 24,000
Capital 32,760
Account Receivable 23,450
Account Payable   19,500
145,41 145,41
0 0
During the month of January, the company completed the following transactions:
1. Insurance expires at the rate of $450 per month.
2. A count of supplies on December 31 showed $3,000 on hand.
3. Received cash from credit customers, $10,000.
4. Purchased a car by cash, $1,000.
5. Rental of $1,600 were due from tenants at December 31.
6. Made a payment to suppliers by cash, $500.
7. Paid wages and salaries for the period by cash, $700.
Required:
a. Record all the transactions.
b. Prepare a Trial Balance as at the end of the month.
c. Prepare Income Statement for the month.
d. Prepare Balance sheet at the end of the period.

Note:
1. Sinh viên phải điền đáp án phần trắc nghiệm vào bảng (phần I).
2. Phần bài tập có 2 đề mẫu, sinh viên có thể sử dụng để ôn tập, và nhiều thông tin về
nghiệp vụ phát sinh hơn đề thi chính thức. Đề thi chính thức thì chỉ có 01 dạng bài tập và
trong mỗi bài tập chỉ có thêm 05 nghiệp vụ phát sinh.
3. Cấu trúc đề thi gồm: 20 câu trắc nghiệm (4 điểm); 01 câu hỏi ngắn (1 điểm) và 01 bài tập
với 04 ý hỏi (5 điểm).