Test 2 Accounting Sec. 4 IGCSE

Which group contains only assets?

• cash at bank, debtors, office equipments

• cash, motor vehicle, bank overdraft

• creditors, bank loan, machinery

• debtors, bank loan, stock

A business has the following assets and liabilities.

What is the capital?

• $29 900

• $33 900

• $34 100

• $49 900

A business purchases a motor vehicle on credit.

What is the effect of this?

• It increases fixed assets.

• It increases owner’s capital.

• It reduces net profit.

• It reduces the bank balance.

A trader provided the following information for the year ended 31 August 2009.

sales $80 000

cost of sales $50 000

net profit $14 000

What were the expenses for the year ended 31 August 2009?

• $16 000

• $30 000

• $36 000

• $66 000

Which is calculated in a profit and loss account?

• capital

• drawings

• gross profit

• net profit

John is a trader. His business cash book includes the following payments.

How much will appear under expenses in the profit and loss account?

• $25 200

• $25 300

• $28 200

• $28 300

Why is a balance sheet prepared?

• to show debtors and creditors at a certain date

• to show how much profit a business made

• to show the financial position of a business at a certain date

• to show the total debits equal the total credits

A sole trader makes a gross profit in a financial year.

Where is this shown in his final accounts?

• Trading account /

  Profit and loss account X

  Balance sheet /

• Trading account X

  Profit and loss account /

  Balance sheet /

• Trading account /

  Profit and loss account /

  Balance sheet X

• Trading account /

  Profit and loss account /

  Balance sheet /

Each financial transaction has two opposite accounting entries.

Which accounting principle is being described?

• business entity

• duality

• going concern

• money measurement

Which is not shown in a business’s final accounts?

• cost of staff training courses

• improved knowledge of staff

• increase in sales staff bonuses

• staff holiday pay