Deck 14: The Final Financial Statements of Sole Traders

Question 1

The descending order in which current liabilities should be shown in the statement of financial position is:

A) Loan, Trade payables, Overdraft, Other payables
B) Trade payables, Other payables, Loan, Overdraft
C) Trade payables, Overdraft, Loan, Other payables
D) Overdraft, Trade payables, Loan, Other payables

Answer 1

Overdraft, Trade payables, Loan, Other payables

Question 2

Net profit is calculated as:

A) Gross profit plus discount received less expenses
B) Gross profit plus discount allowed less expenses
C) Gross profit plus discount received plus carriage outwards less expenses
D) Gross profit plus discount allowed plus carriage outwards less expenses

Answer 2

Gross profit plus discount received less expenses

Question 3

Sales revenue amounted to £27,612.50, and purchases amounted to £10,251.50. The total cost of sales amounted to £15,250. You are informed that closing inventory is £5,455. What is the figure for opening inventory?

A) £11,906.00
B) £9,795.00
C) £10,453.50
D) £12,362.50

Answer 3

£10,453.50

Question 4

The following information should be used to answer questions 4 to 8.


-A Dillon's turnover is:

A) £9,900
B) £9,950
C) £10,050
D) £10,100

Question 5

The following information should be used to answer questions 4 to 8.


-The gross profit as a percentage of net sales revenue is approximately:

A) 10%
B) 20%
C) 30%
D) 40%

Question 6

The following information should be used to answer questions 4 to 8.


-The net cost of purchases for the year was:

A) £6,900
B) £7,000
C) £7,100
D) £7,300

Question 7

The following information should be used to answer questions 4 to 8.


-Returns outward amounted to:

A) £50
B) £100
C) £150
D) £200

Question 8

The following information should be used to answer questions 4 to 8.


-If the purchases had been undercast by £1,000 the gross profit would be:

A) £3,150
B) £4,150
C) £5,150
D) £6,150

Question 9

The following information should be used to answer questions 9 to 11


-The loan was just obtained on the first day of the year. The interest on the loan paid during the year was:

A) £250
B) £500
C) £750
D) £1,000

Question 10

The following information should be used to answer questions 9 to 11


-Carriage outwards £1,000 has been recorded in the income statement under cost of sales, as a result?

A) Net profit is understated by £1,000
B) Net profit is overstated by £1,000
C) Gross profit is understated by £1,000, net profit is unchanged
D) Gross profit is overstated by £1,000, net profit is unchanged

Question 11

The following information should be used to answer questions 9 to 11


-The cost of goods sold is £40,000. Opening inventory is £5,000, closing inventory is £10,000. Carriage out is £1,000, carriage in is £2.00 and purchase returns are £3,000. What are the purchases?

A) £37,000
B) £46,000
C) £47,000
D) £48,000

Question 12

The cost of purchasing goods will appear in:

A) The statement of financial position
B) The trading part of the income statement
C) The statement of cash flows
D) The statement of other comprehensive income

Question 13

Administration expenses will be included in:

A) The statement of financial position
B) The trading part of the income statement
C) The statement of cash flows
D) The income statement

Question 14

Carriage inwards will be disclosed in:

A) The statement of financial position
B) The trading part of the income statement
C) The statement of cash flows
D) The income statement

Question 15

Carriage outwards will be disclosed in:

A) The statement of financial position
B) The trading part of the income statement
C) The statement of cash flows
D) The income statement

Question 16

If an entity starts up business purchases £15,000 worth of inventory, paying an additional £500 carriage inwards, pays £200 carriage outwards, receives £28,000 in sales and has £2,000 in closing inventory. Then its gross profit is:

A) £13,000
B) £13,200
C) £14,800
D) £15,000

Question 17

If an entity has £2,500 in opening inventory, purchases £35,000 worth of inventory, paying an additional £1,500 carriage inwards, pays £2,000 carriage outwards, receives £42,000 in sales, has £12,000 in closing inventory, rent income of £1,000 and other expenses of £8,000. Then its gross profit is?

A) £27,000
B) £29,000
C) £15,000
D) £13,500

Question 18

If an entity has £2,500 in opening inventory, purchases £35,000 worth of inventory, paying an additional £1,500 carriage inwards, pays £2,000 carriage outwards, receives £42,000 in sales, has £12,000 in closing inventory, rent income of £1,000 and other expenses of £8,000. Then its net profit is?

A) £16,000
B) £8,000
C) £6,000
D) £5,000

Question 19

A company sells 400 units at £20 each. It had 100 units of opening inventory at a value of £10 each; it purchased an additional 550 units at £10 each. During the year a total of 100 units were stolen and it returned 50 units.
What is the number of units in closing inventory?

A) 200 units
B) 150 units
C) 100 units
D) 50 units

Question 20

A company sells 400 units at £20 each. It had 100 units of opening inventory at a value of £10 each; it purchased an additional 550 units at £10 each. During the year a total of 100 units were stolen and it returned 50 units.
What is the gross profit?

A) £3,500
B) £3,000
C) £2,500
D) £2,000