MCQ PYP

Why does a trader calculate the profit of the business?

• to calculate the interest payable on a loan

• to calculate the provision for doubtful debts

• to know the total expenses of the business

• to know whether drawings are at a reasonable level

Hassan is a trader. During the financial; year he tool goods from the business for his own use.

How should he record this?

• Drawings Debit

  Inventory Credit

• Drawings Debit

  Purchases Credit

• Income statement Debit

  Inventory Credit

• Income Statement Debit

  Purchases Credit

Where are the accounts of the credit suppliers maintained?

• Purchases journal

• Purchases ledger

• Sales journal

• Sales ledger

Which document does a trader issue to remind a credit customer that a payment is due?

• Credit note

• Debit note

• receipt

• statement of account

What is a cheque counterfoil used for?

• to pay cheque into the bank account

• to pay for goods purchased by cheque

• to record a cheque payment in the cash book

• to record a cheque received in the cash book

Farouk sells goods on credit. A cheque from Khalid, a credit customer, was dishonoured by the bank. How should Farouk record this?

• Bank Debit

  Khalid Credit

• Irrecoverable debts Debit

  Khalid Credit

• Khalid Debit

  Bank Credit

• Khalid Debit

  Irrecoverable Debts Credit

Tumelo sells on credit. The terms of trade are listed.

list price: $200 per unit

credit period: 60 days

trade discount 15% if 10 units or more are purchased

cash discount 3% if the debt is paid within one month

A credit customer purchased 20 units and paid the debt within 15 days

What was the total of invoice?

• $3298

• $3400

• $3880

• $4000

Jane purchased goods and paid by credit transfer.

How should this be recorded in Jane's accounting records?

• Bank Debit

  Purchases Credit

• Purchases Debit

  Bank Credit

• Purchases Debit

  Trade Payable Credit

• Trade Payable Debit

  Purchases Credit

What is shown in a trial balance?

• capital and profit on a particular date

• financial transactions for a particular period

• ledger balances on a particular date

• receipts and payments for a particular period

At the end of each year, PT Limited transfers 20% of the profit for the year to the general reserve.

Draft financial statements were prepared for the ended 30 September 2021. It was then discovered that the inventory at 30 September 2021 had been overstated by $1500.

Which effects did the correction of this error have on retained earnings and general reserve at 30 September 2021?

• retained earnings

  decrease $300

  general reserve

  increase $300

• retained earnings

  decrease $1200

  general reserve

  decrease $300

• retained earnings

  increase $300

  general reserve

  increase $1200

• retained earnings

  increase $1500

  general reserve

  no effect