1.

On the journal of a sole proprietorship business, accountant wrote “Dr Drawings $500; Cr
Bank $500”. What was the transaction?
a. The owner invested more cash to business.
b. The owner withdrew cash from business’ bank account for personal usage.
c. The owner withdrew cash from business’ cash on hand for personal usage.
d. The owner withdrew the profit of the business to deposit into a personal bank account.
2. Accrued expenses are:
a. Expenses in the future period which are already paid for.
b. Expenses which relate to the administrative activities in a business.
c. Expenses which relate to an accounting period but have not yet been paid for.
d. Expenses which have already paid but relate to a future accounting period.
3. If goods are sold on account to a customer for $4,000 with a credit term 5/10, n/30. The
amount of discount for early payment would be:
a. $0 b. $200 c. $20 d. $3,800
4. A receivable that is evidenced by a formal agreement and that normally requires the payment
of interest is a/an:
a. note receivable. b. account receivable. c. trade receivable. d. uncollectible
receivable.
5. Net sales total $800,000. Beginning and ending accounts receivable are $70,000 and $80,000,
respectively. Amount of payment were received from customers during the period is:
a. $800,000 b. $810,000 c. $790,000 d. $950,000
6. Business bought $2,000 supplies on account. This transaction would effected to the accounting
equation as follow:
a. Assets increase $2,000 and Liabilities increase $2,000
b. Assets decrease $2,000 and Liabilities decrease $2,000
c. None
d. Assets increase $2,000 and Liabilities decrease $2,000
7. John earned a salary of $800 for the last week of October. He will be paid on November 1.
The adjusting entry for John’s service on November 30 is:
a. No entry is required.
b. Dr Salaries Expense $800, Cr Salaries Payable $800
c. Dr Salaries Expense $800, Cr Cash $800
d. Dr Salaries Payable $800, Cr Cash $800
8. Which account is presented on Assets in Balance sheet?
a. Sales.
b. Rental expense.
c. Payment in full advance for rental office.
d. Bank overdraft
9. Company A sell 4,000 units of product X at price $2 per unit (VAT of 8% is applied) on
credit. This transaction would be recorded as:
A. Debit Account Receivable: $8,640; Credit Sales: $8,000; Credit VAT control: $640
B. Debit Account Receivable: $8,000; Credit Sales: $7,407; Credit VAT control: $593
C. Debit Cash: $8,640; Credit Sales: $8,000; Credit VAT control: $640
D. Debit Account Receivable: $8,000; Credit Sales: $8,000
10. In which case does the company have to pay VAT to the tax authority?
A. The amount of VAT output is greater than the amount of VAT input.
B. The amount of VAT input is greater than the amount of VAT output.
C. The amount of VAT output is smaller than the amount of VAT input.
D. The amount of VAT payable is zero.
11. Which account does not have balance?
A. COGS
B. Retained earnings
C. Account Payable
D. Capitals
12. At the beginning of the month, Inventory had opening balance $2,000. During the month,
COGS is $3,000. The closing balance of the inventory is $5,000. The amount of inventory was
bought during the month:
A. $6,000
B. $5,000
C. $3,000
D. $0
13. MP company applied perpetual inventory account system. MP purchased inventories on Sep
2nd, 20x1: 1,000 units at $2 per unit with the following credit term 2/10 ,n/30. The company
paid 50% of the amount while the remaining was on account. What should be the appropriated
journal entries for MP for this transaction?
A. Debit Inventories – $2,000; Credit Cash - $2,000
B. Debit Inventories – $2,000; Credit Account Payable - $2,000
C. Debit Inventories – $2,000; Credit Cash - $1,000; Credit Account Payable - $1,000
D. Debit Inventories – $2,000; Credit Cash - $1,960; Credit Purchase Discount - $40
I. Candidates use the following information to answer for question 34-40
You are hired as accountant for The Family Store - a sole proprietorship owned and operated by
Mr Blair. On September 1 of the current year, Mr Blair has the following balances (all normal
balance): Cash $12,000, Inventory $3,500, Supplies $100, Trade Payable $2,000, Bank Account
$420 and Bank Payable $1,520. Store space and office equipment are currently being rented.
Business transactions during September are summarised as follows:
(1) 2nd Signed a 12-months rental contract for the store (@ $200 per month and cash paid
full in advance).
(2) 3rd Purchased a vending machine @$5,600 on credit and purchased supplies @$300
by cash.
(3) 5th Purchased goods @ $5,000 by cash.
(4) 6th Sold goods @ $5,600 and received cash (the mount of good originally costs $3,600)
(5) 8th Borrowed $2,000 cash from bank
(6) 9th Received $500 cash payment in advance by customer for goods will be sold in
October
(7) 16th Paid for the vending machine by cash (@ $4,500)
(8) 17th Invested more $3.000 cash into the business
(9) 20th Mr Blair withdrew $120 cash from business's bank account for personal usage
(10) 26th Purchased goods @$4,000 on credit
(11) 27th Sold goods (which originally cost $3,000) @$1,500 on credit
(12) 30th Depreciation of vending machines was @$100
The amount of supplies still on hand at the end of the month was valued @ $200.
14. The amount of Owner's Equity as of September 1st is:
A. $11,500 B. $12,500 C. $12,000 D. $10,000
th
15. Transaction (6) would be recorded as of September 9
A. Debit Cash $500; Credit Revenue $500
B. Debit Unearned Revenue $500; Credit Cash $500
C. Debit Revenue $500; Credit Cash $500
D. Debit Cash $500; Credit Unearned Revenue $500
16. The Net Book Value of the vending machine (as of September 30th) on the Balance Sheet
would be:
A. $4,700 B. $5,600 C. $4,800 D. $5,500
17. The opening balance of Rent Expense account as October 1st is:
A. $2,000 B. $2,200 C. $1,800 D. No balance
18. What is the closing entries for revenue at the end of September?
A. No entries are made
B. Dr Profit and Loss Summary $7,100; Cr Revenue $7,100
C. Dr Revenue $7,100; Cr Retained Earnings $7,100
D. Dr Revenue $7,100; Cr Profit and Loss Summary $7,100