Mock Examination

Bookkeeping

Time allowed: 90 minutes

Answer all 40 questions.

Pass mark – 70% (56 marks out of the 80 marks available)

Please note that this exam can also be attempted online as part of the Online practical bookkeeping
course.

© First Intuition Ltd, 2022

2 Mock exam questions Bookkeeping

1 A business that is owned by one or more shareholders is called:

 A sole trader
 A partnership
 A limited company (1 mark)

2 A trade payable/creditor is someone who:

 Owes money to the business
 Is owed money by the business
 Only sells goods for cash (1 mark)

3 Gross profit is calculated as sales plus cost of sales.

 True
 False (1 mark)

4 When a business buys goods on credit the account is debited and

the account is credited. (2 marks)

Options:
Purchases Payables Cash Inventories

5 Complete the following sentences with the correct words:

When a sole trader withdraws cash for his own personal use, the

account is debited and the account is credited. (2 marks)

Options:
Bank Drawings Purchases Capital

6 When inventories are sold on credit the account is debited and

the is credited. (2 marks)

7 An increase in a liability is represented by a entry. (2 marks)

Options:
Debit Credit
Bookkeeping Mock exam questions 3

8 The receivables account for July is as follows:

Receivables
1 July Balance b/f 8,000
12 July Sales invoice 1,500 23 July Bank account 6,200
19 July Sales invoice 2,200
26 July Sales invoice 1,000

At the end of the month the balance on the accounts is:

 $8,000 debit
 $12,700 credit
 $6,500 debit
 $6,200 credit (1 mark)

9 Determine the correct entry for the following:

(i) A decrease in an asset should be a debit / credit entry in the asset account.
(ii) An increase in owners’ capital should be a debit / credit entry in the capital account.
(iii) An increase in drawings should be a debit / credit entry in the drawings account (3 marks)

10 At the end of accounting period, balances on income and expenses accounts are:
 Carried forward to the next accounting period
 Transferred to the profit or loss account
 Ignored (1 mark)

11 A company has the following figures:

Sales $42,000
Purchases $19,000
Expenses $17,000
Opening inventories was valued at $4,000 and closing inventories was valued at $6,000.
Gross profit is Net profit is
 $25,000  $25,000
 $23,000  $23,000
 $21,000  $21,000
 $8,000  $8,000
(2 marks)
4 Mock exam questions Bookkeeping

12 A business buys six items and sells three of them in January, as follows:
Item Sales price Cost price
1 $150 $70
2 $80 $35
3 $60
4 $110
5 $200 $90
6 $80
(i) The value of inventories to be transferred from purchases to the statement of financial

position at the end of the month is: $

(ii) Cost of sales is: $ (3 marks)

Options:
445 430 250 195 235

13 Pink Ltd has the following totals in its sales returns day book for March:
Details Total VAT Net
Total $7,350 $1,225 $6,125
Show the correct double entry to record these totals in the general ledger (write in the account
name, amount and tick the debit or credit column as appropriate).
Account name $ Debit Credit

(3 marks)

14 Complete the following using the correct words:

(i) Recording an invoice for $915 as $195 is known as a error.

(ii) Recording a telephone invoice in the electricity account is known as a

error.

(iii) Recording a stationery invoice in the office equipment account is known as a

error.

(iv) Failing to record a sales invoice in the sales account is known as a

error.

Options:
commission transposition omission principle
(4 marks)
Bookkeeping Mock exam questions 5

15 Wolf has the following trial balance at 31 July:

Debit Credit
Share capital 50,000
Retained earnings 61,860
Sales 379,740
Purchases 171,800
Purchases returns 3,490
All office expenses 218,420
Property, plant & equipment – cost 14,500
Accumulated depreciation 6,250
Payables 46,000
Receivables 71,050
Bad debt allowance 1,500
Bank 73,070
548,840 548,840

In addition, Wolf had unsold inventories valued at $8,100 at the year end. Calculate the
following amounts to be included in the financial statements.
$
Gross profit
Net profit
Current assets
(2 marks for each figure)

16 If input tax exceeds output tax the difference should be:

 Carried forward to the next VAT period
 Reclaimed from HMRC
 Charged as an expense in the profit or loss account (1 mark)

17 Are the following statements true or false?

(i) Accruals are a liability in the statement of financial position True / False
(ii) Prepayments are an asset in the statement of financial position True / False (2 marks)

18 A business makes up its accounts to 30 June and is billed quarterly for electricity. An electricity
invoice is received on 30 April and the next invoice is received on 31 July for $3,600 for the 3 -
month period to 31 July.
What is the correct double entry to record the invoice?
Debit Credit
 Payables $3,600  Payables $3,600
 Electricity $3,600  Electricity $3,600
 Accruals $3,600  Accruals $3,600 (1 mark)
6 Mock exam questions Bookkeeping

19 What is the double entry to record the accrual at 30 June?

Debit Credit
 Electricity $2,400 Accruals $2,400
 Accruals $2,400 Electricity $2,400
 Electricity $1,200 Accruals $1,200
 No accrual is required (1 mark)

20 Depreciation is an example of the

concept of accounting. (1 mark)

Options:
separate entity prudence matching consistency

21 The following information relates to the payroll of Buckingham Ltd for the month of June.

Employees Employees
Employee Gross pay PAYE NICs Pension
Charles $2,000 $400 $180 $50
Camilla $1,500 $300 $140 $25
Andrew $1,200 $275 $100 $30

The rate of employer’s NI is 11%.

What is the total wages and salary expenses for Buckingham Limited for the month?
 $4,700
 $5,120
 $5,217
 $5,637 (2 marks)

22 What is Andrew’s net pay for the month?

 $1,200
 $925
 $825
 $795 (2 marks)

23 A business purchases a non-current asset for $8,000 on 1 July 2017. The asset has a residual
value of $2,000 and is depreciated on a monthly, straight line basis over 4 years, starting from
the month of purchase.
What is the depreciation charge for the year ended 31 December 2017?
 $2,000
 $1,500
 $1,000
 $750 (3 marks)
Bookkeeping Mock exam questions 7

24 A business purchases a non-current asset for $8,000 on 1 July 2017. The asset has a residual
value of $2,000 and is depreciated on a monthly, straight line basis over 4 years, starting from
the month of purchase.
The business sells the asset on 31 December 2018 for $5,000. What is the profit or loss on
disposal?
 $750 loss
 $Nil
 $750 profit
 $1,000 profit (2 marks)

25 A business prepares the following bank reconciliation statement:

Balance per bank statement $5,000
Less: ($1,000)
Add: $2,000
Balance per cash book $6,000

Unpresented cheques are: $

Outstanding lodgements / deposits are: $ (2 marks)

26 Disco offers a 10% settlement discount on the supply of goods costing $500. How is the sale and
discount recorded in the nominal ledger?
 Sales are always recorded net of the discount
 Sales are always recorded ignoring the discount
 Sales are recorded net of the discount if the customer is expected to take it
 The discount is only ever recorded at the point of receipt (1 mark)

27 Chocky sells standard rated goods with a list price of $10,000 and offers a trade discount of 5%.
At what amount should the sale be recorded?

$ (2 marks)

28 Which of the following is the best description of an imprest system?

 It is a means of controlling petty cash
 It is a method of accounting for inventories
 It is a way of recording bank payments and receipts
 It is a bespoke accounting system (1 mark)

29 A business maintains a petty cash float of $100. During the month of August the business has
the following:
Taxi receipts $15
Receipt for a refund for stationery $20
Postage stamps $42.50
What amount is required to top up petty cash at the end of the month?

$ (2 marks)
8 Mock exam questions Bookkeeping

30 What is the correct double entry to record the top up of petty cash at the end of the month?
Debit Credit
 Petty cash Bank
 Bank Petty cash
 General expenses Petty cash
 Petty cash Receivables (2 marks)

31 Your cash book balance is $1,000 overdrawn. Unpresented cheques amount to $3,500 and
uncleared lodgements amount to $1,800. What is the balance on the bank statement?
 $700 debit
 $2,700 debit
 $4,300 debit
 $700 credit (2 marks)

32 What is the double entry to record the receipt from a customer which has previously been
written off?
Debit Credit
 Receivables Cash
 Cash Receivables
 Receivables Bad debt expense
 Cash Bad debt expense (2 marks)

33 The following figures have been taken from the accounts of Zed Limited.
Debit Credit
$ $
Receivables control account 126240
Provision for doubtful debts 4100
Bad and doubtful debts expense 2190
Management have decided to write off debts amounting to $1,400 and to make a specific
provision against one customer of $500.
What amount should appear in the company’s statement of financial position for net trade
receivables?
 $124,840
 $122,140
 $120,740
 $120,240 (2 marks)
Bookkeeping Mock exam questions 9

34 The following figures have been taken from the accounts of Zed Limited.
Debit Credit
$ $
Receivables control account 126,240
Provision for doubtful debts 4,100
Bad and doubtful debts expense 2,190
Management have decided to write off debts amounting to $1,400 and to make a specific
provision against one customer of $500.
What amount should be charged to the company’s profit and loss account for bad and doubtful
debts expense?
 $500
 $1,400
 $1,900
 $4,090 (3 marks)

35 What is the double entry to record the write off of a bad debt that has already been provided
for?
Debit Credit
 Bad debt expense Receivables
 Bad debt expense Provision for doubtful debts
 Provision for doubtful debts Receivables
 Provision for doubtful debts Bad debt expense (2 marks)

36 Jenny’s receivables amount to $81,600. She decides to write off $2,000 owing from a customer
who has gone bankrupt and wishes to make a general provision of 3% of remaining debts. There
is a balance brought forward of $1,000 on Jenny’s provision for doubtful debts.
What amount should be charged to Jenny’s profit and loss account for bad and doubtful debts?
 $2,448
 $1,388
 $2,388
 $3,388 (2 marks)

37 Jenny’s receivables amount to $81,600. She decides to write off $2,000 owing from a customer
who has gone bankrupt and wishes to make a general provision of 3% of remaining debts. There
is a balance brought forward of $1,000 on Jenny’s provision for doubtful debts. What is the
balance carried forward on Jenny’s provision for doubtful debts?
 $2,388
 $3,388
 $1,388
 $4,488 (2 marks)
1 0 Mock exam questions Bookkeeping

38 Which of the following would not appear in the receivables control account?
 Contra entry
 Sales returns
 Purchase returns
 Dishonoured cheques (1 mark)

39 Complete the following sentences:

(i) Payments made by a company to its shareholders are known as

(ii) Amounts taken from a sole trader by its owner are known as

(iii) Company directors are paid

(iv) Businesses pay on loans. (4 marks)

Options:
Drawings
Salaries
Dividends
Interest

40 Which of the following would all appear on the same side of a trial balance?
 Sales, payables, purchases returns, receivables allowance
 Purchases, accruals, sales returns, receivables
 Sales, receivables, prepayments, purchases returns
 Purchases, receivables allowance, payables, accruals (1 mark)