Institute of Professional Studies and Accounting Services (IPSAS)

Bosasso, Puntland-Somalia.
Tel: 7790443/7970443

Course name: Diploma in Financial Accounting (Batch 26)

Date: 11thNov. 2023
Progress test: 3
Student name/ID:________________________________________________________________
Instructions: Choose and circle the correct answer for each question.
1) Which of the following is an asset?
A. Buildings
B. Bank overdraft
C. Accrued rent
D. Loan from K Harris
2) Given the following, what is the amount of Capital? Assets: Buildings £40,000; Stock £12,500;
Cash £3,500; Car £4,000. Liabilities: Creditors £5,000; Loan from Daahir £2,600.
A. £60,000
B. £55,000
C. £52,400
D. £67,600
3) Which of the following statements is incorrect?
A. Liabilities + Assets = Capital
B. Liabilities + Capital = Assets
C. Assets – Liabilities = Capital
D. Assets – Capital = Liabilities
4) Collection of account receivable(or debtors) will have which of the following effects?
A. Increase assets and decrease assets
B. Increase assets and decrease liabilities
C. Increase assets and increase capital
D. Increase assets and increase cash
5) Which of the following statements is incorrect?
A. Assets – Liabilities = Capital
B. Liabilities + Capital = Assets
C. Liabilities + Assets = Capital
1
 D. Assets – Capital = Liabilities
6) Which of the following is a non-current liability?
A. A bank overdraft
B. A mortgage repayable in five years’ time
C. A bank loan repayable within a year
D. A trade payable
7) Which of the following is not an asset?
A. Buildings
B. Cash balance
C. Accounts receivable
D. Loan from Hassan
8) Which of the following is incorrect?
Assets Liabilities Capital
£ £ £
A. 7,850 1,250 6,600
B. 8,200 2,800 5,400
C. 9,550 1,150 8,200
D. 6,540 1,120 5,420
9) Which account is NOT a liability account?
A. Accounts payable(or creditors)
B. Accrued expenses(expenses incurred but not paid for)
C. Cash
D. Rent payable
10) The assets that can be converted into cash within a short period (i.e. 1 year or less) are
known as:
A. Current assets
B. Fixed assets
C. Investments
D. Intangibles
11) Hassan has the following assets and liabilities as on 30 June 2020: Creditors £4,500; Car
£9,500; Equipment £7,400; Stock of goods £6,300; Loan from Warsame £1,500; Debtors £4,350;
Cash at bank £9,000; Cash in hand £350.
You are not given the capital amount at that date.
During the first week of July 2020:
(a) He paid creditors by cheque £2,100.
(b) Hassan bought extra equipment on credit for £230.
(c) Hassan bought extra stock by cheque £380.
(d) Some of his debtors paid him £350 by cheque and £150 by cash.
(e) Hassan invested further capital into the business: £1,600 by cheque, and £400 in cash.
Required: draw up a balance sheet as on 7 July 2020 after the above transactions have
been completed.
Good luck.