Exam 5: Double-Entry Bookkeeping 2: Books of Prime Entry, Accounting Systems and Other Double-Entry Applications

The accumulated depreciation at the date of sale of a non-current asset is £25,600. What is the correct double entry to record the removal of this accumulated depreciation on the disposal of the non-current asset in the books of account of an organisation?

The bank balance shown in Florian's cash book at 31 December is £22,988.44. Receipts recorded in the cash book and paid into the bank, which have not yet been recorded as receipts on the bank statement at 31 December total up to £4,762.12. Payments recorded in the cash book that have not yet been listed as payments on the bank statement at 31 December add up to £8,269.74. The bank statement shows a direct receipt from a customer of £481.66 and a direct payment to a supplier of £212.33 neither of which has been recorded in the cash book. What is the bank balance on the bank statement at 31 December once any necessary adjustments to the bank balance in the cash book have been made?

Debit wages and salaries expense account, Credit cash is the correct double entry to record the payment of PAYE and NIC to HM Revenue and Customs.

Which of the following statements accurately describe the sales ledger? Please select all that apply.

During January, Meera Limited makes credit purchases of goods for resale at a net cost of £42,000. Meera Limited's suppliers charge 20% VAT on the net cost of purchases. What is the correct double entry to record these credit purchases of goods for resale?

Errors Limited made credit sales of £12,000 inclusive of VAT. The double entry to records these sales was Debit sales £10,000, Debit VAT £2,000, Credit trade receivables £12,000. What is the journal entry required to correct this error?

Michael buys and sells second hand goods for cash. During the financial year ended 31 October 2019, his total cash takings were £150,325. He paid £70,895 to sellers of goods and paid £50,240 into his bank account. His cash balance at 1 November 2018 was £495 and he had cash in the till of £525 at 31 October 2019. Michael takes money out of his cash takings to pay for his personal living expenses. What were Michael's drawings in the financial year ended 31 October 2019?

Debit trade receivables, Credit sales, Credit VAT is the correct double entry to record cash sales made by a business

An entity's payroll system calculates two expenses, gross pay and employer's national insurance, and a series of liabilities for settlement at a later date.

Jess runs a market stall, selling stationery for cash. Her cash balance at 1 March 2018 was £250 and her cash balance at 28 February 2019 was £400. She paid £92,617 of cash into her business bank account and paid cash to her suppliers totalling up to £48,913. What were Jess's sales of stationery in the financial year ended 28 February 2019?

The total cost of paying employees is the gross wages and salaries expense.

Yu Limited records a VAT inclusive figure for sales of £105,000 for the month of August. All sales are made on credit and VAT is charged at the rate of 20% on the net sales value of each sale. What is the correct double entry to record these sales?

In September, Hamza Limited makes cash sales with a net sales value of £2,400. The company is registered for VAT and charges VAT at the rate of 20% on the net sales value. What is the correct double entry to record these cash sales in the books of Hamza Limited?

VAT is a liability because: Please select all that apply.

The bank balance shown in Reza's cash book at 31 July is £93,497.60. Receipts recorded in the cash book and paid into the bank which have not yet been recorded as receipts on the bank statement at 31 July total up to £8,741.90. Payments recorded in the cash book that have not yet been listed as payments on the bank statement at 31 July add up to £10,432.25. What is the bank balance on the bank statement at 31 July?

Credit notes in the purchases system: Please select all that apply.

In November, Pia Limited's gross wages and salaries were £54,000. PAYE of £12,000 and NIC of £5,400 were deducted from gross wages and salaries for the month, leaving net wages and salaries to be paid of £36,600. What is the correct double entry to record gross wages and salaries in the books of Pia Limited?

The bank balance in the bank statement + cash book receipts not yet recorded in the bank statement - cash book payments not yet recorded in the bank statement = the bank balance in the cash book.

In April, Gina received credit notes from her suppliers for equipment hire services which were ordered and invoiced but never provided. The credit notes total up to £7,200 which includes VAT of 20%. What is the correct double entry to record these credit notes in Gina's books of account?

Maintaining a separate purchase ledger account for each individual supplier = control.