1 Abdul is given a haircut by Michael, who is a self-employed hairdresser.

Abdul pays with a

$10 note.
What kind of transaction is this?
A Sale of goods by Michael
B Sale of a service by Abdul
C Purchase of goods by Michael
D Purchase of a service by Abdul

2 What kind of transaction is this from Michael’s point of view?

A Cash sale
B Credit sale
C Cash purchase
D Credit purchase
3 Which of the following terms would be used to classify a payment for electricity to heat the
business premises of a firm of plumbers?
A Expense
B Purchase
C Receipt
D Sales

4 Which of the following would be paid for by petty cash?

A Car repairs on the business owner’s private vehicle
B Packet of envelopes at local store
C Paying a supplier for goods bought on credit
D Wages and salaries

5 Which of the following transactions are associated with payroll?

A Income from cash sale of computer used to calculate salaries
B Postage and stationery, office expenses
C Taxes on employee income, pension scheme payments, wages
D Credit purchase of safety equipment for delivery staff

6 Which document is used to correct an overcharge in an original sales invoice?

A Credit note
B Debit note
C Dispatch note
D Goods received note

7 Which document provides a summary of the credit transactions between a customer and
supplier during the previous month?
A Advice note
B Quotation
C Invoice
D Statement of account
8. What is the purpose of a statement of account sent to a customer?
A! It is a demand for payment
B!
This It states
study to downloaded
source was the customer what goods
by 100000803024097 have been
from CourseHero.com sent 20:45:50 GMT -05:00
on 05-21-2023

https://www.coursehero.com/file/122400201/fa1-documentationdocx/
C! It tells the customer what is owed as a reminder and as a check
D! It states the credit limit on the account
9. A remittance advice:
A! Advises on what has to be paid
B! Gives information about what is being paid
C! Advises about goods being returned
D! Gives information about wages being paid
10. X starts a business with $50,000 cash, buying inventory $10,000 from cash and paying
business expenses of $1,000. Inventory is purchased on credit for $5,000. Following these
transactions, what is the capital of X's business?
A $39,000
B $49,000
C $50,000
D $54,000
11. A business receives an accountant's bill for $500. Which of the following statements
correctly shows the effect upon the accounting equation of the business, assuming the bill is
unpaid?
A Assets decrease, liabilities increase
B Capital decreases, liabilities increase
C Capital increases, liabilities decrease
D Assets decrease, capital decreases
12. Which of the following statements concerning a debit entry is correct?
A It records a decrease in assets.
B It records a business expense.
C It records a sale.
D It records an increase in the liabilities of a business.
13. Which of the following statements concerning credit entries is correct?
A Credit entries record decreases in capital or liabilities.
B Credit entries record increases in assets.
C Credit entries record increases in profits.
D Credit entries record increases in expenses.
14. What is a trial balance?
A A list of ledger balances extracted from customer accounts
B A list of ledger balances extracted from accounts which helps to ensure that the bookkeeping
has been accurate
C An accounting document which a business must prepare
D A list of all the transactions which have occurred in a period taken from ledger accounts
15. What is a 'remittance advice'
A A document which is sent to a supplier containing detailed delivery instructions
B A document used to confirm a telephone order
C A document sent with a payment explaining what a payment represents
D A document prepared by a supplier on a regular basis listing the outstanding amounts and
payments received in the most recent trading period
This study source was downloaded by 100000803024097 from CourseHero.com on 05-21-2023 20:45:50 GMT -05:00

https://www.coursehero.com/file/122400201/fa1-documentationdocx/
16. Sales tax
If an invoice total, including sales tax is $564 and sales tax is 16%, what will the sales tax
amount be?
A: $90.24
B: $77.79
C: $77.97
D: $30.38
17. The table shows figures for the net value and the sales tax percentage.

Calculate the sales tax amount and the gross amount then enter your answers into the table.

Sales tax
Net amount ($) percentage Sales tax ($) Gross amount ($)
($)

A 1425.63 17%

B 12,147.98 18%

C 95.65 16.5%

D 2,124.04 20%

18. The table shows figures for the net gross value and the sales tax percentage.

Calculate the sales tax amount and the net amount then enter your answers into the table.

Sales tax
Gross value ($) Sales tax ($) Net value ($)
percentage

A 128.55 14%

B 203.74 16%

C 3744.00 17%

D 22.38 19%

19. A company sells goods to a customer for $5,000 at the beginning of the month.

The customer immediately returns half of the goods as faulty and pays half of the remaining
balance within 7 days. What is the balance outstanding on the statement of account issued by
the company to the customer at the end of the month?

A) $5,000
B) $2,500
C) $1,250
This D)
studyZero
source was downloaded by 100000803024097 from CourseHero.com on 05-21-2023 20:45:50 GMT -05:00

https://www.coursehero.com/file/122400201/fa1-documentationdocx/
 20. Which of the following documents would you not issue to a credit customer?

A) Credit note
B) Invoice
C) Statement of account
D) Debit note

Ex 1. Complete the sales invoice using the following information:

 Dahlia (account number SL210) wants to purchase:
 3 men's suits (product code MS011) at $224.00 each.
 3 ladies' suits (product code LS030) at $150.00 each.
 Dahlia is offered a 7% trade discount. Sales tax is 20%.
 The last invoice number used was 62453.
 Dahlia's Limo Drivers' Purchase Order number is PO2351.
 Date: 23 March 20X1
 Customer address: Dahlia 5, Crendon Street London, W1

Ex 2. Prepare an invoice for Dahlia at Dahlia's Limo Drivers with a settlement (prompt
payment) discount. Use the following information to complete the invoice. Dahlia wants to
purchase:

 3 men's suits (product code MS011) at $224.00 each

 3 ladies' suits (product code LS030) at $150.00 each.
You will offer them:
 7% trade discount
 5% prompt payment discount for payment within 7 days.

Ex 3. A business sells 20 items with a list price of $10 each to a customer. The customer
receives a trade discount of 5% and a settlement discount of 2% for payment within 30 days.
What is the total amount on the invoice issued by the business to the customer?
A) $200
B) $190
C) $186.20
D) $196

Ex 4. A business buys goods from a supplier for a list price of $10,000. The business negotiates
a trade discount of 10% and a settlement discount of 2% if payment is within 20 days. How
much will the business pay if settlement is in 10 days?
A) $9,000
B) $8,800
C) $8,820
D) $9,800

This study source was downloaded by 100000803024097 from CourseHero.com on 05-21-2023 20:45:50 GMT -05:00

https://www.coursehero.com/file/122400201/fa1-documentationdocx/
Powered by TCPDF (www.tcpdf.org)