Question 1

What is the balance carried down on the following account on 30 June?-S. McKee (supplier)

Accepted Answer

A)  £120 debit 
B)  £120 credit 
C)  £60 debit 
D)  None of the above 
A)  £120 debit 
B)  £120 credit 
C)  £60 debit 
D)  None of the above B

Question 2

An error of original entry would occur if the sale of goods was:

Accepted Answer

A)  Credited to a non-current asset account 
B)  Entered correctly to the sales account, but entered in the customer's account using the incorrect amount 
C)  Debited to the sales account and credited to the supplier's account 
D)  Debited and credited to the correct accounts using the incorrect amount in both instances. 
A)  Credited to a non-current asset account 
B)  Entered correctly to the sales account, but entered in the customer's account using the incorrect amount 
C)  Debited to the sales account and credited to the supplier's account 
D)  Debited and credited to the correct accounts using the incorrect amount in both instances. D

Question 3

The main purpose of a trial balance is to:

Accepted Answer

A)  Help balance the bank account 
B)  Help check the arithmetical accuracy of the double entry 
C)  Help check the bank account with the bank statement 
D)  Check the accuracy of the books of original entry 
A)  Help balance the bank account 
B)  Help check the arithmetical accuracy of the double entry 
C)  Help check the bank account with the bank statement 
D)  Check the accuracy of the books of original entry B

Question 4

Which of the following items appear on the same side of the trial balance?

Accepted Answer

A)  Motor vehicles and motor vehicle expenses 
B)  Fixtures and fittings and capital introduced 
C)  Drawings and income 
D)  Purchase returns and property 
A)  Motor vehicles and motor vehicle expenses 
B)  Fixtures and fittings and capital introduced 
C)  Drawings and income 
D)  Purchase returns and property

Question 5

Which of the following is an error of omission?

Accepted Answer

A)  Rent was recorded as (Cr Bank £500, Cr. Rates £500) 
B)  An invoice for the sale of goods was omitted from the books 
C)  A sundry receipt of £250 was debited to income and credited to bank 
D)  An invoice for stationery for £250 was debited to stationery and credited to bank. 
A)  Rent was recorded as (Cr Bank £500, Cr. Rates £500) 
B)  An invoice for the sale of goods was omitted from the books 
C)  A sundry receipt of £250 was debited to income and credited to bank 
D)  An invoice for stationery for £250 was debited to stationery and credited to bank.

Question 6

Which of the following errors will cause the trial balance to disagree?

Accepted Answer

A)  Posting stationery purchases to the fixtures and fittings account 
B)  Posting £100 received from A. Glen to A. Glean's account 
C)  Casting the motor vehicles expense account incorrectly when extracting the trial balance 
D)  Debiting £100 received to the sales account and crediting the Bank account with the £100. 
A)  Posting stationery purchases to the fixtures and fittings account 
B)  Posting £100 received from A. Glen to A. Glean's account 
C)  Casting the motor vehicles expense account incorrectly when extracting the trial balance 
D)  Debiting £100 received to the sales account and crediting the Bank account with the £100.

Question 7

Which of the following is not an error?

Accepted Answer

A)  Rent was recorded as (Cr Bank £500, Cr. Rates £500) 
B)  An invoice for the sale of goods was omitted from the books 
C)  A sundry receipt of £250 was debited to income and credited to bank 
D)  An invoice for stationery for £250 was debited to stationery and credited to bank. 
A)  Rent was recorded as (Cr Bank £500, Cr. Rates £500) 
B)  An invoice for the sale of goods was omitted from the books 
C)  A sundry receipt of £250 was debited to income and credited to bank 
D)  An invoice for stationery for £250 was debited to stationery and credited to bank.

Question 8

It is important to prepare a trial balance in advance of extracting the financial statements because:

Accepted Answer

A)  It assists the accountant in preparing any adjustments that may be required 
B)  It shows that debits and credits have been posted to the ledger accounts in equal values 
C)  It confirms that the ledger account balances are correct 
D)  It provides the figures that are required for the preparation of the final financial statements 
A)  It assists the accountant in preparing any adjustments that may be required 
B)  It shows that debits and credits have been posted to the ledger accounts in equal values 
C)  It confirms that the ledger account balances are correct 
D)  It provides the figures that are required for the preparation of the final financial statements

Question 9

Which of the following is a reversal error?

Accepted Answer

A)  Rent was recorded as (Cr Bank £500, Cr. Rates £500) 
B)  An invoice for the sale of goods was omitted from the books 
C)  A sundry receipt of £250 was debited to income and credited to bank 
D)  An invoice for stationery for £250 was debited to stationery and credited to bank. 
A)  Rent was recorded as (Cr Bank £500, Cr. Rates £500) 
B)  An invoice for the sale of goods was omitted from the books 
C)  A sundry receipt of £250 was debited to income and credited to bank 
D)  An invoice for stationery for £250 was debited to stationery and credited to bank.

Question 10

A trial balance failed to agree. The total of the debits amounted to £100,600. The credit balances totalled £111,600. Which of the following might explain the difference?

Accepted Answer

A)  Rent was recorded as (Cr Bank £500, Cr. Rates £500) 
B)  An invoice for the sale of goods was omitted from the books 
C)  A sundry receipt of £250 was debited to income and credited to bank 
D)  An invoice for stationery for £250 was debited to stationery and credited to bank. 
A)  Rent was recorded as (Cr Bank £500, Cr. Rates £500) 
B)  An invoice for the sale of goods was omitted from the books 
C)  A sundry receipt of £250 was debited to income and credited to bank 
D)  An invoice for stationery for £250 was debited to stationery and credited to bank.

Question 11

An error of original entry would occur if the sale of goods was:

Accepted Answer

A)  Credited to a non-current asset account 
B)  Entered correctly to the sales account, but entered in the customer's account using the incorrect amount 
C)  Debited to the sales account and credited to the supplier's account 
D)  Debited and credited to the correct accounts using the incorrect amount in both instances. 
A)  Credited to a non-current asset account 
B)  Entered correctly to the sales account, but entered in the customer's account using the incorrect amount 
C)  Debited to the sales account and credited to the supplier's account 
D)  Debited and credited to the correct accounts using the incorrect amount in both instances.

Question 12

A trial balance failed to agree. The total of the debits amounted to £315,600; the credit balances totalled £310,600. Which of the following might explain the difference?

Accepted Answer

A)  Rent was recorded as (Dr Bank £5,000, Cr. Insurance £5,000) 
B)  An invoice for the purchase of inventory was omitted from the books 
C)  A sundry receipt of £2,250 was debited to income and credited to bank 
D)  An invoice for stationery for £2,250 was debited to stationery and also debited to bank. 
A)  Rent was recorded as (Dr Bank £5,000, Cr. Insurance £5,000) 
B)  An invoice for the purchase of inventory was omitted from the books 
C)  A sundry receipt of £2,250 was debited to income and credited to bank 
D)  An invoice for stationery for £2,250 was debited to stationery and also debited to bank.

Question 13

What is the correct closing description for the following account at the year end 31 January?-Drawings account

Accepted Answer

A)  Income statement: £420 
B)  Balance carried down: £420 
C)  Balance brought down: £420 
D)  Capital account: £420 
A)  Income statement: £420 
B)  Balance carried down: £420 
C)  Balance brought down: £420 
D)  Capital account: £420

Question 14

When preparing financial statements, the bad debts account is closed by a transfer to:

Accepted Answer

A)  The statement of financial position 
B)  The income statement 
C)  The trading account 
D)  The provision for bad debts account 
A)  The statement of financial position 
B)  The income statement 
C)  The trading account 
D)  The provision for bad debts account

Question 15

What is the balance brought down on the following account on 31 May?-P. Kelly

Accepted Answer

A)  £380 debit 
B)  £395 credit 
C)  £395 debit 
D)  None of the above 
A)  £380 debit 
B)  £395 credit 
C)  £395 debit 
D)  None of the above

Question 16

At the end of the financial year the entries regarding bad debts are:

Accepted Answer

A)  Dr. Income statement account Cr. Bad debts account 
B)  Dr. Bad debts account Cr. Income statement account 
C)  Dr Trade receivables account Cr. Provision for bad debts account 
D)  Dr. Provision for bad debts account Cr. Income statement account 
A)  Dr. Income statement account Cr. Bad debts account 
B)  Dr. Bad debts account Cr. Income statement account 
C)  Dr Trade receivables account Cr. Provision for bad debts account 
D)  Dr. Provision for bad debts account Cr. Income statement account

Exam 10: The Balancing of Accounts and the Trial Balance

What is the balance carried down on the following account on 30 June?-S. McKee (supplier)

An error of original entry would occur if the sale of goods was:

The main purpose of a trial balance is to:

Which of the following items appear on the same side of the trial balance?

Which of the following is an error of omission?

Which of the following errors will cause the trial balance to disagree?

Which of the following is not an error?

It is important to prepare a trial balance in advance of extracting the financial statements because:

Which of the following is a reversal error?

A trial balance failed to agree. The total of the debits amounted to £100,600. The credit balances totalled £111,600. Which of the following might explain the difference?

An error of original entry would occur if the sale of goods was:

A trial balance failed to agree. The total of the debits amounted to £315,600; the credit balances totalled £310,600. Which of the following might explain the difference?

What is the correct closing description for the following account at the year end 31 January?-Drawings account

When preparing financial statements, the bad debts account is closed by a transfer to:

What is the balance brought down on the following account on 31 May?-P. Kelly

At the end of the financial year the entries regarding bad debts are:

Entities and Financial Reporting Standards

International Accounting: Institutional Framework and Standards

The Nature and Objectives of Financial Accounting

Accounting Principles, Concepts and Policies

The Conceptual Framework of Accounting

Auditing, Corporate Governance and Ethics

The Accounting Equation and Its Components

Basic Documentation and Books of Accounts

The General Ledger

Day Books and the Journal

The Cash Book

The Petty Cash Book

The Final Financial Statements of Sole Traders

Depreciation and Non-Current Assets

Bad Debts and Provisions for Bad Debts

Accruals and Prepayments

The Preparation of Final Financial Statements From the Trial Balance

The Bank Reconciliation Statement

Control Accounts

Errors and Suspense Accounts

Single Entry and Incomplete Records

Inventory Valuation

Financial Statements for Manufacturing Entities

The Final Financial Statements of Clubs

The Final Financial Statements of Partnerships

Changes in Partnerships

Partnership Dissolution and Conversion to Company Status

The Nature of Limited Companies and Their Capital

The Final Financial Statements of Limited Companies

Statement of Cash Flows

The Appraisal of Company Financial Statements Using Ratio Analysis

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