FA-Recording transaction

In double-entry bookkeeping, which of the following statements is true?

• Credit entries decrease liabilities and increase income

• Debit entries decrease income and increase assets

• Credit entries decrease expenses and increase assets

• Debit entries decrease expenses and increase assets

1       Winn Ltd has opening trade payables of £24,183 and closing trade payables of £34,655. Purchases for the period totalled £254,192 (£31,590 relating to cash purchases).

Total payments recorded in the payables ledger for the period were

• £212,130

• £233,074

• £243,720

• £264,664

What is the correct double entry to record an invoice raised to a credit customer who is not expected to take advantage of an early settlement discount?

• Debit Revenue, Credit Receivables

• Debit Payables, Credit Revenue

• Debit Receivables, Credit Revenue

• Debit Revenue, Credit Payables

Which of the following could be a debit entry in the payables account?

• Output VAT

• Cash purchases total

• Payments made to suppliers

• Early settlement discounts given to customers

1       Anchor Ltd is preparing its financial statements. After transferring the balances on all the income and expense ledger accounts to the profit and loss ledger account, the total credits in the profit and loss ledger account exceed the total debits by £4,000.

Which two of the following statements about Anchor Ltd are correct?

• Anchor Ltd has made a loss for the year of £4,000

• Anchor Ltd has made a profit for the year of £4,000

• To begin to calculate the closing capital account balance, Anchor Ltd should credit the capital account and debit the profit and loss ledger account with £4,000

• The opening balance on the profit and loss ledger account for the next reporting period is £4,000 credit

• The closing balance on the profit and loss ledger account of £4,000 should be deducted from the capital account to give the profit for the year.

Which of the following would be classified as a non-current asset

• Cash

• Prepayments

• Land

• Receivables

Which of the following statements concerning preparation of financial statements is true

• The balances on income and expense accounts are brought down at the end of the accounting period to be carried forward to the next accounting period

• The balances on asset and liability accounts are summarised in an additional ledger account known as the statement of financial position ledger account

• The statement of profit or loss ledger account is a list of all the balances extracted from the business's accounts

• Loss for the year is a credit entry in the profit or loss ledger account

Which two of the following types of account would normally appear on the debit side of the initial trial balance

• Asset

• Liability

• Income

• Expense

• Capital