June 2023 Variant 1

Identify which is a current liability.

• Cash in hand

• Inventory

• Trade receivables

• Trade payables

Identify the book of original entry in which irrecoverable debts are recorded.

• Cash book

• Journal

• Purchases day book

• Sales day book

Identify in which book of original entry a credit note received by a trader would

be recorded.

• Purchases day book

• Purchases returns day book

• Sales day book

• Sales returns day book

Identify the type of error when a sales invoice for $500 is entered in the sales day

book as $450.

• Commission

• Compensating

• Original entry

• Principle

Identify what will be confirmed by preparing a trade payables ledger control account.

• All purchase invoices have been posted

• All supplier payments have been processed

• Entries have been posted to the correct personal accounts

• The closing balance agrees with the total of individual balances

Identify the main purpose of providing depreciation on non-current assets.

• To know the profit or loss on disposal

• To provide funds for the replacement of the asset

• To show the market value of the asset

• To spread the cost of the asset over its useful life

Identify the accounting concept being described.

“Financial statements can record only information that has a monetary value”

• Business entity

• Materiality

• Money measurement

• Prudence

Identify the effect on profits if revenue expenditure is treated as capital expenditure.

• Gross profit overstated

• Gross profit understated

• Profit for the year overstated

• Profit for the year understated

Identify the principle of professional ethics being described.

“Accountants must make their own judgements on the accounts”

• Confidentiality

• Integrity

• Objectivity

• Professional behaviour

Identify the double entry to record goods taken for personal use by a trader.

• Debit Drawings Credit Purchases

• Debit Drawings Credit Sales

• Debit Purchases Credit Drawings

• Debit Sales Credit Drawings