Accounting equation and double entry
Quiz by Wan Marini Izayu Mahat
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- Q1
Accounting equation can be written as:
Assets - Liabilities - Opening capital + Drawings = Profit
Assets +Profit - Drawings = Liabilities + Capital
Assets + Profit - Drawings + Liabilities = Closing capital
Assets = Opening capital + Profit - Drawings - Liabilities
120s - Q2
A business can make a profit and yet have a decreased bank balance. Which of the following might cause this to happen?
The sale of non-current assets at loss
The lengthening of the period of credit given to customers
The charging of depreciation in the statement of profit or loss
The lengthening of the period of credit taken from suppliers
120s - Q3
A sole trader purchases goods on credit.
Which element(s) of the accounting equation will change due to this transaction?
Assets only
Assets and capital
Capital and liabilities
Assets and liabilities
120s - Q4
A sole trader borrows £10,000 from a bank.
Which element(s) of the accounting equation will change due to this transaction?
Assets and capital
Capital and liabilities
Assets and liabilities
Assets only
120s - Q5
A sole trader sells goods for credit at a profit of £300.
Which element(s) of the accounting equation will change due to this transaction?
Capital and liabilities
Assets and liabilities
Assets and capital
Assets only
120s - Q6
The following details are given:
PAYE payable £2,450
National insurance payable - employees' £1,350
- employer's £1,500
Net pay to employees £12,450
How much is the employees' gross wages?
£17,780
£27,450
£16,280
£12,450
120s - Q7
Michael purchases goods on credit from John for £1000. £100 of these goods are defective and Michael returns them to John. What document would John issue to Michael in respect of the returned goods?
Invoice
Delivery note
Remittance advice
Credit note
120s - Q8
Which of the following documents are send out to credit customers to request payment?
Sales order
Goods delivery note
Sales invoice
Purchase invoice
120s - Q9
Moana plc operates an imprest petty cash system. The imprest amount is £150. At the end of the period the totals of the expense columns in the petty cash book were as follows:
Stationery £25
Postage £10
Travel £55
How much cash is required to restore the imprest amount?
£80
£90
£60
£35
120s - Q10
The amount of petty cash spend for the month are as follows:
Petrol £46
Postage £22
How would you prepare a journal entry to reflect this transaction?
Debit Petty cash £68
Credit Bank £68
Debit Petrol £46
Debit Postage £22
Credit Petty cash £68
Debit Petty cash £68
Credit Petrol £46
Credit Postage £22
Debit Bank £68
Credit Petty cash £68
120s - Q11
On 1.1.20X9, £1,000 given to petty cashier, he has spent £860 during the month of January. According to the imprest system, how much is to be reimbursed on 1.2.20X9?
£1,860
£140
£860
£1,000
120s - Q12
Petty cash may be used to pay for?
Purchases of furniture and fittings
Salaries to staff
All of the above
Expenses relating to post and telegrams
120s