Deck 22: Single Entry and Incomplete Records

Question 1

If gross profit is £50,000 and the net profit is 25% of gross profit, the expenses must be:

A) £12,500
B) £37,500
C) £41,500
D) £62,500

Answer 1

£37,500

Question 2

You are told that the mark up on an item is 20%. If the item costs £50, then the sales price should be:

A) £60
B) £62.50
C) £65
D) None of the above

Answer 2

£60

Question 3

Opening inventory is £29,000, closing inventory is £31,000, purchases are £128,000, and purchase returns are £8,500.
Assume that the suppliers are always paid for in cash and returns are always received in cash, what is the charge to the income statement in the period.

A) £128,000
B) £117,500
C) £119,500
D) £117,000

Answer 3

£117,500

Question 4

Calculate the value of purchases from the following information:

A) £151,300
B) £253,200
C) £261,600
D) £289,100

Question 5

B. Little owed his suppliers £95,000 at the start of the year. By the end of the year he had debts
Outstanding to suppliers of £60,000. He paid suppliers £150,000 by cheque and £25,000 in cash. The
Suppliers gave B. Little a total of £4,000 in cash discounts.
What are the purchases for the year?

A) £119,000
B) £140,000
C) £144,000
D) £175,000

Question 6

A business commenced with a bank balance of £6,500; it subsequently purchased goods by cheque for £20,000; gross profit mark-up was 120%; half the goods were sold for cash, less cash discount of 5%; all takings were banked.
The resulting net profit is:

A) £1,400
B) £7,400
C) £10,900
D) £12,000
E) * £20,000 x 120% = £24,000 Gross margin

Question 7

A business has the following cash and bank transactions during the year ended 31/12/X1. Opening balance: Cash £1,000, Bank £2,000 overdrawn
Cash receipts: £25,200
Cash paid: £6,400
Cash paid to bank: £11,000
Cheque payments: £16,400
Closing balance: Cash £1,200, Bank £12,400 overdrawn. What are the total cash and bank drawings?

A) £1,720
B) £12,600
C) £23,600
D) £29,600

Question 8

An entity sells goods earning a constant mark up of 25%. Sales revenue in the period is £250,000. Opening inventory is valued at £5,000; closing inventory is valued at £10,000. Purchases were £225,000. The owner suspects theft; calculate the expected loss from theft given all the previous figures are correct.

A) £20,000
B) £32,500
C) £30,000
D) £25,000

Question 9

The net assets of Stuart Ltd. at 1 January 20X1 amounted to £128,000. During the year ended 31 December 20X1 he introduced a further £50,000 of capital and made drawings of £48,000. At 31 December 20X1 Stuart Ltd's net assets totalled £94,000
What was Stuart Ltd.s profit/ (loss) for the year ended 31 December 20X1?

A) £(36,000)
B) £(34,000)
C) £36,000
D) £34,000

Question 10

A business has the following items extracted from its accounting records. Sales £75,000, opening inventory £5,000, closing inventory £7,500. The business applies a constant mark up of 25%. The total purchases for the year are?

A) £57,500
B) £72,500
C) £58,750
D) £62,500

Question 11

Opening inventory is £29,000, closing inventory is £31,000, purchases are £128,000, and purchase returns are £8,500.
There was an opening balance on the supplier's account of £10,000 and a closing balance of £12,500. How much was paid to the suppliers in the period.

A) £128,000
B) £117,500
C) £119,500
D) £117,000

Question 12

A business achieves a margin of 25% on sales revenue. Opening inventory was £36,000, closing inventory was £56,000 and purchases totalled £600,000. The sales in the period are therefore:

A) £725,000
B) £773,200
C) £800,000
D) £876,460

Question 13

The net book value of a company's non-current assets was £400,000 at 1 January 20X0. During the year to 31 December 20X0 the company sold non-current assets for £50,000, incurring a loss of £10,000. The depreciation charge for the year was £40,000. What was the net book value of the non-current assets at 31 December 20X0?

A) £300,000
B) £310,000
C) £320,000
D) £360,000

Question 14

The telephone account for the year ended 30 June 20X2 was as follows: Opening balance for telephone accrued at 1 July 20X2 £6,000 Payments made during the year:
1 August 20X1 for the period to 31 July 20X1 £12,000
1 November 20X1 for the period to 31 October 20X1 £14,400 1 February 20X2 for the period to 31 January 20X2 £18,000 30 June for the period to 30 April 20X2 £16,800
Which of the following is the appropriate entry for telephone in the financial statements at 30 June 20X2?

A) £55,200
B) £61,200
C) £66,400
D) £68,400
E) *£16,800 x 2/3 = £11,200

Question 15

Anna had an opening cash balance of £500, she received £28,000 cash in the period, paid £15,000 into the bank, paid staff wages of £3,200, paid sundry expenses of £800, paid the window cleaner £200, paid a repair man £2,000 and had £800 left on hand at the end of the year.
Anna helped herself to cash when she was short. Which of the following is correct?

A) Anna took drawings of £6,000 in cash in the period
B) Anna took drawings of £6,500 in cash in the period
C) Anna took drawings of £21,000 in cash in the period
D) Anna took drawings of £21,500 in cash in the period

Question 16

Anna is not wealthy. Her retail business had an opening cash balance of £500, she paid £15,000 cash into the bank, paid staff wages of £3,200 cash, paid sundry expenses of £800 cash, paid the window cleaner £200 cash, paid a repair man £2,000 cash and had £800 left on hand at the end of the year. Anna did not take any cash drawings.
Which of the following is most likely to be correct?

A) Anna made cash sales of £21,500 in the period
B) Anna took cash out of the bank to cover the expenditure but there is no record of it.
C) Anna introduced £21,500 cash to the business
D) Anna got a loan for £21,500