Question 1

Which of the following may cause the sum of the debit column of a trial balance to differ from the sum of the credit column?

Accepted Answer

A)  Posting the same wrong amount to both sides of the right accounts. 
B)  Posting an amount to the wrong side of the right account. 
C)  Posting an amount to the right side of the wrong account. 
D)  Reversing the postings, that is, debiting the account that should have been credited and crediting the account that should have been debited. 
A)  Posting the same wrong amount to both sides of the right accounts. 
B)  Posting an amount to the wrong side of the right account. 
C)  Posting an amount to the right side of the wrong account. 
D)  Reversing the postings, that is, debiting the account that should have been credited and crediting the account that should have been debited. B

Question 2

Inventory of $100 000 was purchased on credit. The journal entry is:

Accepted Answer

A)  Dr Inventory
Cr Cash 
B)  Dr Inventory
Cr Accounts payable 
C)  Dr Accounts payable
Cr Inventory 
D)  Dr Inventory
Cr Accrued expenses 
A)  Dr Inventory
Cr Cash 
B)  Dr Inventory
Cr Accounts payable 
C)  Dr Accounts payable
Cr Inventory 
D)  Dr Inventory
Cr Accrued expenses B

Question 3

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business.
 
What is the closing balance of the bank account?

Accepted Answer

A)  $100 000 
B)  $131 500 
C)  $170 000 
D)  $208 500 
A)  $100 000 
B)  $131 500 
C)  $170 000 
D)  $208 500 B

Question 4

Which of the following errors will be detectable by a trial balance?

Accepted Answer

A)  A revenue incorrectly posted to the ledger as a liability. 
B)  Failure to record a journal entry. 
C)  A purchase of inventory posted twice to the general ledger. 
D)  An addition error in a ledger account. 
A)  A revenue incorrectly posted to the ledger as a liability. 
B)  Failure to record a journal entry. 
C)  A purchase of inventory posted twice to the general ledger. 
D)  An addition error in a ledger account.

Question 5

Which of the following statements about closing the accounts is NOT true?

Accepted Answer

A)  Sales revenue account is debited. 
B)  Depreciation account is credited. 
C)  Share capital is debited. 
D)  A net loss is debited to the retained profits account. 
A)  Sales revenue account is debited. 
B)  Depreciation account is credited. 
C)  Share capital is debited. 
D)  A net loss is debited to the retained profits account.

Question 6

An account from a painter for work completed on the office was received. The payment is due next month. The journal entry is:

Accepted Answer

A)  Dr Accounts payable
Cr Repairs and maintenance expense 
B)  Dr Accounts payable
Cr Prepaid expenses 
C)  Dr Repairs and maintenance expense
Cr Accounts payable 
D)  No entry is required at this stage. 
A)  Dr Accounts payable
Cr Repairs and maintenance expense 
B)  Dr Accounts payable
Cr Prepaid expenses 
C)  Dr Repairs and maintenance expense
Cr Accounts payable 
D)  No entry is required at this stage.

Question 7

Greening Ltd is a newly established business selling computer hardware. Shown below are ledger accounts in T-account form, with entries made for the first month of operations.
 
What is the closing balance of inventory?

Accepted Answer

A)  $120 000 
B)  $140 000 
C)  $200 000 
D)  $260 000 
A)  $120 000 
B)  $140 000 
C)  $200 000 
D)  $260 000

Question 8

Which of the following is NOT a source document of a business enterprise?

Accepted Answer

A)  Trial balance 
B)  Purchase order 
C)  List of the day's collections 
D)  An invoice 
A)  Trial balance 
B)  Purchase order 
C)  List of the day's collections 
D)  An invoice

Question 9

Greening Ltd is a newly established business selling computer hardware. Shown below are ledger accounts in T-account form, with entries made for the first month of operations.
 
Which transaction represents the acquisition of a noncurrent asset?

Accepted Answer

A)  (2) 
B)  (4) 
C)  (9) 
D)  (10) 
A)  (2) 
B)  (4) 
C)  (9) 
D)  (10)

Question 10

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business.
 
Which transaction is an accrual accounting end-of-period adjustment?

Accepted Answer

A)  (7) 
B)  (8) 
C)  (9) 
D)  (10) 
A)  (7) 
B)  (8) 
C)  (9) 
D)  (10)

Question 11

Which of the following accounts is not closed off at year-end?

Accepted Answer

A)  Cost of goods sold 
B)  Amortisation expense 
C)  Interest revenue 
D)  Accounts receivable 
A)  Cost of goods sold 
B)  Amortisation expense 
C)  Interest revenue 
D)  Accounts receivable

Question 12

Identify the correct classification for the following five ledger accounts:

Accepted Answer

A)  1 asset, 2 expense, 3 expense, 4 asset, 5 expense. 
B)  1 asset, 2 expense, 3 asset, 4 expense, 5 liability. 
C)  1 asset, 2 expense, 3 expense, 4 asset, 5 liability. 
D)  1 expense, 2 expense, 3 expense, 4 expense, 5 expense. 
A)  1 asset, 2 expense, 3 expense, 4 asset, 5 expense. 
B)  1 asset, 2 expense, 3 asset, 4 expense, 5 liability. 
C)  1 asset, 2 expense, 3 expense, 4 asset, 5 liability. 
D)  1 expense, 2 expense, 3 expense, 4 expense, 5 expense.

Question 13

Dawes Pty Ltd received its monthly bank statement showing bank charges of $20. The transaction should be recorded as:

Accepted Answer

A)  Dr Cash
Cr Bank charges 
B)  Dr Accounts payable
Cr Cash 
C)  Dr Bank charges
Cr Cash 
D)  No record is necessary. 
A)  Dr Cash
Cr Bank charges 
B)  Dr Accounts payable
Cr Cash 
C)  Dr Bank charges
Cr Cash 
D)  No record is necessary.

Question 14

Greening Ltd is a newly established business selling computer hardware. Shown below are ledger accounts in T-account form, with entries made for the first month of operations.
 
What does transaction (2) represent?

Accepted Answer

A)  Purchase of inventory on credit 
B)  Purchase of inventory for cash 
C)  Sale of inventory on credit 
D)  Sale of inventory for cash 
A)  Purchase of inventory on credit 
B)  Purchase of inventory for cash 
C)  Sale of inventory on credit 
D)  Sale of inventory for cash

Question 15

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business.
 
Which transaction represents a customer paying his/her account?

Accepted Answer

A)  (5
A)  
B)  (6
A)  
C)  (7) 
D)  (8) 
A)  (5
A)  
B)  (6
A)  
C)  (7) 
D)  (8)

Question 16

Which of the following accounts are not closed off at balance date?

Accepted Answer

A)  Accounts receivable 
B)  Profit and loss summary 
C)  Dividend declared 
D)  Sales revenue 
A)  Accounts receivable 
B)  Profit and loss summary 
C)  Dividend declared 
D)  Sales revenue

Question 17

When a company orders goods for resale, what is the accounting entry?

Accepted Answer

A)  Dr Cash
Cr Accounts payable 
B)  Dr Purchases
Cr Accounts payable 
C)  Dr Inventory
Cr Accounts payable 
D)  No accounting entry is required yet. 
A)  Dr Cash
Cr Accounts payable 
B)  Dr Purchases
Cr Accounts payable 
C)  Dr Inventory
Cr Accounts payable 
D)  No accounting entry is required yet.

Question 18

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business.
 
What does transaction (2) represent?

Accepted Answer

A)  Sale of inventory on credit 
B)  Sale of inventory for cash 
C)  Purchase of inventory on credit 
D)  Purchase of inventory for cash 
A)  Sale of inventory on credit 
B)  Sale of inventory for cash 
C)  Purchase of inventory on credit 
D)  Purchase of inventory for cash

Question 19

Identify the correct classification for the following four ledger accounts in the chart of accounts:

Accepted Answer

A)  1 expense, 2 liability, 3 expense, 4 expense. 
B)  1 asset, 2 liability, 3 expense, 4 expense. 
C)  1 asset, 2 liability, 3 expense, 4 asset. 
D)  1 asset, 2 liability, 3 liability, 4 revenue. 
A)  1 expense, 2 liability, 3 expense, 4 expense. 
B)  1 asset, 2 liability, 3 expense, 4 expense. 
C)  1 asset, 2 liability, 3 expense, 4 asset. 
D)  1 asset, 2 liability, 3 liability, 4 revenue.

Question 20

The following are steps in the accounting cycle:
 
What is the order that is normally followed?

Accepted Answer

A)  4, 7, 3, 6, 1, 9, 2, 8, 5. 
B)  4, 7, 3, 6, 8, 9, 1, 2, 5. 
C)  4, 7, 3, 6, 1, 9, 8, 2, 5. 
D)  None of the above. 
A)  4, 7, 3, 6, 1, 9, 2, 8, 5. 
B)  4, 7, 3, 6, 8, 9, 1, 2, 5. 
C)  4, 7, 3, 6, 1, 9, 8, 2, 5. 
D)  None of the above.

Which of the following may cause the sum of the debit column of a trial balance to differ from the sum of the credit column?

Inventory of $100 000 was purchased on credit. The journal entry is:

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business. What is the closing balance of the bank account?

Which of the following errors will be detectable by a trial balance?

Which of the following statements about closing the accounts is NOT true?

An account from a painter for work completed on the office was received. The payment is due next month. The journal entry is:

Greening Ltd is a newly established business selling computer hardware. Shown below are ledger accounts in T-account form, with entries made for the first month of operations. What is the closing balance of inventory?

Which of the following is NOT a source document of a business enterprise?

Greening Ltd is a newly established business selling computer hardware. Shown below are ledger accounts in T-account form, with entries made for the first month of operations. Which transaction represents the acquisition of a noncurrent asset?

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business. Which transaction is an accrual accounting end-of-period adjustment?

Which of the following accounts is not closed off at year-end?

Identify the correct classification for the following five ledger accounts:

Dawes Pty Ltd received its monthly bank statement showing bank charges of $20. The transaction should be recorded as:

Greening Ltd is a newly established business selling computer hardware. Shown below are ledger accounts in T-account form, with entries made for the first month of operations. What does transaction (2) represent?

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business. Which transaction represents a customer paying his/her account?

Which of the following accounts are not closed off at balance date?

When a company orders goods for resale, what is the accounting entry?

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business. What does transaction (2) represent?

Identify the correct classification for the following four ledger accounts in the chart of accounts:

The following are steps in the accounting cycle: What is the order that is normally followed?

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Accrual Accounting Adjustments

Financial Reporting Principles, Accounting Standards and Auditing

Internal Control and Cash

Accounts Receivable and Further Record-Keeping

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters

Exam 4: Record-Keeping

Which of the following may cause the sum of the debit column of a trial balance to differ from the sum of the credit column?

Inventory of $100 000 was purchased on credit. The journal entry is:

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business. What is the closing balance of the bank account?

Which of the following errors will be detectable by a trial balance?

Which of the following statements about closing the accounts is NOT true?

An account from a painter for work completed on the office was received. The payment is due next month. The journal entry is:

Greening Ltd is a newly established business selling computer hardware. Shown below are ledger accounts in T-account form, with entries made for the first month of operations. What is the closing balance of inventory?

Which of the following is NOT a source document of a business enterprise?

Greening Ltd is a newly established business selling computer hardware. Shown below are ledger accounts in T-account form, with entries made for the first month of operations. Which transaction represents the acquisition of a noncurrent asset?

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business. Which transaction is an accrual accounting end-of-period adjustment?

Which of the following accounts is not closed off at year-end?

Identify the correct classification for the following five ledger accounts:

Dawes Pty Ltd received its monthly bank statement showing bank charges of $20. The transaction should be recorded as:

Greening Ltd is a newly established business selling computer hardware. Shown below are ledger accounts in T-account form, with entries made for the first month of operations. What does transaction (2) represent?

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business. Which transaction represents a customer paying his/her account?

Which of the following accounts are not closed off at balance date?

When a company orders goods for resale, what is the accounting entry?

Brownlee Ltd is a newly established retail store selling plumbing hardware. Shown below are ledger accounts in T-account form, with entries made for the first three months of business. What does transaction (2) represent?

Identify the correct classification for the following four ledger accounts in the chart of accounts:

The following are steps in the accounting cycle: What is the order that is normally followed?

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Accrual Accounting Adjustments

Financial Reporting Principles, Accounting Standards and Auditing

Internal Control and Cash

Accounts Receivable and Further Record-Keeping

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters