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

An error of original entry arises when:

Charging VAT on the sales of goods and services increases the total invoice amount but does not increase income.

Aurora's bank statement at 30 June shows a cash balance in the bank of £42,489.79. There is a receipt for £1,050.00 from a customer in the bank statement which has not yet been recorded in Aurora's cash book. Bank charges and interest totalling up to £814.57 have been deducted from the cash in the bank statement but have not yet been recorded in Aurora's cash book. Cash book receipts paid into the bank but not yet recorded in the bank statement by 30 June total up to £914.32 while cash book payments that have not been listed as payments on the bank statement at 30 June add up to £675.43. What is the bank balance in Aurora's cash book at 30 June once any necessary adjustments to the bank balance in the cash book have been made?

Cash receipts in the cash book represent all the income of an organisation for the financial period.

Credit sales invoices record: Please select all that apply.

A debit balance on the non-current asset disposals account means that a loss has been made on the disposal of non-current assets.

Zahid's bank statement at 30 November shows a cash balance in the bank of £18,472.38. There is a receipt for £850.00 from a customer in the bank statement but not yet recorded in Zahid's cash book. Cash book receipts paid into the bank but not yet recorded in the bank statement by 30 September total up to £4,321.67 while cash book payments that have not been listed as payments on the bank statement at 30 September add up to £8,733.41. What is the bank balance in Zahid's cash book at 30 November once any necessary adjustments to the bank balance in the cash book have been made?

Debit interest payable, Credit cash is the correct double entry to record the payment of interest to the bank.

Purchase invoices show the value of goods or services supplied, any VAT charged on the supply of goods and services and the total amount owed by the entity (value of the goods or services supplied + the VAT). What other features would you expect to see on a purchase invoice when it is received by an organisation? Please select all that apply.

When cash is paid to settle the net wages and salaries due to employees the correct double entry to record this transaction is Debit wages control account, Credit bank.

In June, Hitesh Limited received cash from trade receivables of £54,000. The company is registered for VAT and charges VAT of 20% on all the sales of services it makes. What is the correct double entry to record this receipt of cash from trade receivables?

The purchase ledger records transactions with individual suppliers of goods and services. Are the transactions listed below debits or credits in each individual supplier's purchase ledger account? A) Credit notes = Debit B) Purchase invoices = Credit C) Discounts received = Debit D) Cash refunds = Credit

Maintaining a sales ledger account for each trade receivable enables entities to exercise very close control over their trade receivable assets.

If the total of the credit entries on the non-current asset disposals account is greater than the total of the debit entries, then a profit has been made on the disposal of non-current assets.

When a sale is described as being VAT inclusive, this means that the VAT at a rate of 20% on that sale is calculated by dividing the VAT inclusive figure by 6.

Jiafan Limited's production payroll for May shows deductions from wages for PAYE and employee's NIC totalling £18,900. What is the correct double entry to record these PAYE and employee's NIC deductions from wages?

Fortuna Limited received an invoice for purchases of goods for resale of £20,000. This invoice was debited to the salaries expense account and credited to trade payables. What is the journal entry required to correct this error of commission?

What type of error results in two or more errors cancelling each other out?

Farzana Limited makes credit sales of £225,324 (including VAT of £37,554) in September. The double entry to record these sales was Debit trade receivables £252,324, Credit Sales £210,270, Credit VAT £42,054. What is the journal entry required to correct this error of original entry?

Cash payments in the cash book: Please select all that apply.