1.Which of the Following Accounts Usually Have Credit Balances?
Quiz 2
1.Which of the following accounts usually have credit balances?
(i)Accounts receivable
(ii)Accounts payable
(iii)Drawings
(iv)Capital
A.(i) and (ii)
B.(i) and (iii)
C.(ii) and (iii)
D.(ii) and (iv)
2.The account balances of A Yeung’s books are shown below:
Sales / $231,980
Purchases / 163,260
Discounts received / 1,500
Returns outwards / 12,390
Inventory / 65,430
Bank / 76,850
Cash / 34,660
Buildings / 126,980
Debtors / 88,750
Creditors / 73,440
Loan from A Yeung’s relative / 23,000
Expenses / 21,170
Capital amounts to
A.$234,790.
B.$247,180.
C.$231,870.
D.$248,680.
3.When a trial balance agrees, it means
A.no error was made in the books
B.some errors exist in the books but cannot be found yet.
C.some errors could still have been made in the books.
D.there may be errors that affect the agreement of a trial balance.
4.The following is an extract from the trial balance of ACCT Company at the year end 31 December 20X6:
Dr / Cr$ / $
Beginning inventories / 5,500
Carriage inwards / 440
Carriage outwards / 660
Purchases / 73,000
Returns / 5,860 / 3,490
Sales / 113,500
Given that the amount of ending inventories was twice of the opening inventories, the cost of sale for the year is ______.
A.$62,080
B. $64,010
C. $64,450
D. $64,670
5.On 31 December 2009, the following figures appeared in Paul Wong’s income statement:
Sales / $470,890
Purchases / 396,730
Returns inwards / 2,500
Returns outwards / 2,390
Inventory as at 1 January 2009 / 89,000
Carriage inwards / 1,850
Carriage outwards / 2,460
Gross profit / 95,980
What is the amount of opening inventory in 2010?
A.$110,240
B.$89,000
C.$112,780
D.Cannot be determined due to insufficient information.
6.Which of the following should be classified as a non-current liability in a balance sheet?
A.A sum payable by the business within three months of the balance sheet date.
B.A sum payable by the business within six months of the balance sheet date.
C.A sum payable by the business more than 12 months after the balance sheet date.
D.None of the above
7.Which of the following statements about accounting equation is INCORRECT?
A.Assets – Liabilities = Capital
B. Assets – Liabilities = Capital + Revenues – Expenses
C. Fixed assets + Working capital = Capital + Long-term liabilities
D. Fixed assets + Current assets = Capital + Long-term liabilities– Current liabilities
8.On 1 January 2012, Mr Tong set up a firm and brought in motor vehicles of $2000, premises of $14 000 and inventory of $5000 to the business. The firm borrowed $3000 from the bank to acquire a piece of equipment. Meanwhile, Mr Tong put $1000 into the firm’s cash box and $8000 into the firm’s bank account. What was the amount of Mr Tong’s capital on 1 January 2012?
A.$9 000
B.$27 000
C.$30 000
D.$33 000
9.Which of the following accounting principles and conventions has been violated if the owner of a restaurant charges the unpaid bills for meals with his family sometimes to the company’s expense accounts but sometimes to his personal expense accounts?
A.Accrual
B. Business entity
C. Consistency
D. Going concern
10.Which of the following are nominal accounts?
(i)Office premises
(ii)Discounts received
(iii)Car repairs
(iv)Bank overdraft
A.(i) and (ii)
B.(ii) and (iii)
C.(ii), and (iv)
D.(iii), and (iv)
11.Which of the following accounting concepts cannot be applied in thesituation listed to its right?
Accounting concept / SituationA. / Historical cost / The market price of an asset is not shown on the statement of financial position.
B. / Business entity / The vehicle used by the owner and his family is not recorded as an asset of his firm.
C. / Consistency / The same method is used to record the same type of transaction in different companies.
D. / Accrual / The expenses prepaid in the previous year have been recorded in the financial statements of the current year.
12.On 31 December 2011, the amount of total current liabilities of a company is $120 000 and its current ratio is 3:1. What was the amount of working capital of the company on the same date?
A.$40 000
B.$80 000
C.$240 000
D.$360 000
13.The following information concerns the business of C Chau, a sole proprietorship, for the year ended 31 December 2008:
$Non-current assets / 136,600
Bank overdraft / 13,000
Cash on hand / 7,000
Accounts receivable / 42,000
Accounts payable / 12,000
Bank loan (repayable in 2012) / 87,900
Capital as at 31 December 2007 / 70,600
Capital as at 31 December 2008 / 88,700
Capital contributed in 2008 / 23,000
Drawings of goods by C Chau / 3,300
Sales / 182,700
Purchases / 71,500
Carriage inwards / 1,000
Operating expenses / 93,500
Inventory as at 31 December 2008 / 16,000
There was no inventory as at 1 January 2008. The gross profit ratio for the year 2008 was
A.69.07%.
B.71.43%.
C.70.88%.
D.62.12%.
14.Given the following figures: Non-current assets $180,000; Cash on hand $20,000; Accounts receivable $62,000; Inventory $17,000; Accounts payable $36,000; Bank overdraft $8,000; Long-term bank loans $120,000. What is the acid test ratio?
A.1.7 times
B.2.25 times
C.1.86 times
D.0.6 times
15.The following relates to Island Company for the year ended 31 December 20X6:
$Accounts payable / 5,000
Accounts receivable / 6,000
Bank loan (repayable in December 20X7) / 11,500
Capital as at 31 December 20X5 / 36,200
Capital as at 31 December 20X6 / 44,200
Cash / 1,000
Drawings of goods by the owner / 6,400
Ending inventories / 12,500
Introduction of capital during 20X6 / 20,000
Mortgage loan (repayable in 20X1) / 60,000
Net income for the year / 15,600
Plant and machinery / 80,000
Island Company’s return on capital employed for 20X6 is ______.
A.19.40%
B. 35.29%
C. 38.81%
D. 43.09%