Chapter 4 part 2 FA 1

The following are the year end balances in a business's general ledger:

Sales $628,000

Cost of sales $458,000

General overheads $138,000

Trade payables $54,000

Trade receivables $?

Bank $61,000

Capital $86,000

If the trial balance balances, what is the missing figure for trade receivables

• $61,000

• $111,000

• $233,000

• $387,000

What is the double entry for payment to a credit supplier

• DR purchases
  CR bank

• DR purchases

  CR trade payables

• DR Trade payables
  CR Bank

• DR Trade payables
  CR Purchases

What is the double entry required for discounts received from suppliers?

• DR trade payables
  Cr Discount received

• DR purchases
  CR Discount received

• DR Discount received
  CR purchases

• DR Discount received
  CR trade payable

Tilly makes a sale on credit for $1,200 inclusive of sales tax at a rate of 20%. What is the correct double entry for the transaction?

• DR Bank $1,200

  CR sales $1,200

• DR Trade receivables $1,200
  CR Sales $1,000 and CR sales tax $200

• DR trade receivables $1,200
  CR sales $960 and CR Sales tax $240

• DR Trade receivables $1,000

  CR Sales $1,000

Which of the following is the correct posting of the discounts received?

• DR Purchases
  CR Discount received

• DR Bank
  CR Purchases

• DR Trade payables
  CR Discount received

• DR Purchases
  CR Bank

Which of the following errors would result in an entry to the suspense account?

• Recording the purchase of a machine as a debit to wages

• Omitting an invoice for electricity

• Recording bank payment of $687 as $678 in both the bank general ledger account and trade payables general ledger account

• Recording a cash sale as a debit in both the sales account and the bank general ledger account

Where one side of a transaction has been recorded in the wrong class of account, such as electricity expenses posted to repair and maintenance, the error is known as an error of :

• Commission

• Omission

• Transposition

• Principle

An error of principle is one where:

• A transaction has not been recorded

• The rules of an accounting principle or concept have been broken

• The digits in a number are recorded the wrong way round

• One side of a transaction has been recorded in the wrong class of accounts, such as bank interest income to rental income

Which of the following errors would be found by extracting a trial balance?

• A transaction has been completely missed in the accounts

• The double entries have been made the wrong way round

• A bank payment was recorded in both the bank account general ledger and purchases for $100 when it should have been $1000

• None of the above

Which of the following errors will require an entry to a suspense account to correct it?

• A credit purchase was recorded as a cash purchase

• A credit sale was completely omitted from the accounting records

• A cash purchase was recorded correctly in the purchase account and debited to the bank general ledger account

• The payment of the rent expense was debited to the electricity account instead of the rent account