Is it true that the trial balance totals should agree?

No, there are sometimes good reasons why they differ

Yes, except where the trial balance is extracted at the year end

No, because it is not a balance sheet

Excess of sales over cost of goods sold

Cost of goods sold + opening inventory

Net profit less expenses of the period

To find the value of closing inventory at the end of a period we

Do this by physically counting the inventory (i.e. stocktaking)

Deduct opening inventory from cost of goods sold

Deduct cost of goods sold from sales

Which of these best describes a balance sheet?

An account proving the books balance

The descending order in which current assets should be shown in the balance sheet is

Inventory, Trade receivables, Bank, Cash

Cash, Bank, Trade receivables, Inventory

Trade receivables, Inventory, Bank, Cash

Inventory, Trade receivables, Cash, Bank

Which of these best describes non-current assets?

Items having a long life and not bought specifically for resale

Items bought to be used in the business

Items which will not wear out quickly

Expensive items bought for the business

Carriage inwards is charged to the trading account because

It is an expense connected with buying goods

It should not go in the balance sheet

It is not part of motor expenses

Carriage outwards goes in the profit and loss account

The sales day book is best described as

Part of the double entry system

Containing customers’ accounts

A debit balance of £100 in a cash account shows that

Cash has been overspent by £100

£100 was the total of cash paid out

The total of cash received was less than £100

£50 cash taken from the cash till and banked is entered

Debit bank column £50: Credit cash column £50

Debit cash column £50: Credit bank column £50

Debit cash column £50: Credit cash column £50

Debit bank column £50: Credit bank column £50

What are the two fundamental characteristics of useful financial information according to the IASB’s Conceptual Framework for Financial Reporting?

Relevance and faithful representation

Comparability and understandability

‘Posting’ the transactions in bookkeeping means

Making the second entry of a double entry transaction

Making the first entry of a double entry transaction

The total of the Returns Outwards Book is transferred to

The credit side of the Return Outwards Account

The debit side of the Return Outwards Account

The credit side of the Return Outwards Book

The debit side of the Purchase Return Journal

A credit balance brought down on a Rent Account means

We have paid that rent in advance at that date

We have paid too little in rent

A debit balance brought down on a Packing Materials Account means

We have an inventory of packing materials unused

We are owed for packing materials

We have lost money on packing materials

If we take goods for own use we should

Debit Drawings Account: Credit Purchases Account

Debit Purchases Account: Credit Drawings Account

Debit Drawings Account: Credit Inventory Account

Debit Sales Account: Credit Inventory Account

Not part of the double entry system

Part of the double entry system

Not part of the double entry system

Which of the following equations properly represents a derivation of the fundamental accounting equation?

Assets – liabilities = owner's equity.

Assets + liabilities = owner's equity.

Wilson Company owns land that cost $100,000. If a “quick sale” of the land was necessary to generate cash, the company feels it would receive only $80,000. The company continues to report the asset on the balance sheet at $100,000. Which of the following concepts justifies this?

The value is tied to objective and verifiable past transactions.

Which of these items would be accounted for as an expense?

Payment of the current period's rent.

Which of the following transactions would have no impact on stockholders’ equity?

Purchase of land from the proceeds of a bank loan.

Investments of cash by stockholders.

The following comments all relate to the recording process. Which of these statements is correct?

The general ledger is posted from transactions recorded in the general journal.

The general ledger is a chronological record of transactions.

The trial balance provides the primary source document for recording transactions into the general journal.

Transposition is the transfer of information from the general journal to the general ledger.

The following comments each relate to the recording of journal entries. Which statement is true?

It is customary to record credits on the left and debits on the right.

For any given journal entry, debits must exceed credits.

The chart of accounts reveals the amount to debit and credit to the affected accounts.

Journalization is the process of converting transactions and events into debit/credit format.

The proper journal entry to record Ransom Company’s billing of clients for $500 of services rendered is:

Accounts Receivable 500 Service Revenue 500

Cash 500 Accounts Receivable 500

Accounts Receivable 500 Capital Stock 500

The proper journal entry to record $1,000 of Dividends paid by Myer’s Corporation is:

Accounts Payable 1,000 Cash 1,000

Dividends Expense 1,000 Cash 1,000

Dividends Expense 1,000 Service Revenue 1,000

Lynn Lipincott invested land valued at $5,000 in her business. This transaction would be recorded by:

Land 5,000 Service Revenue 5,000

Provides a listing of the balance of each account in active use.

Is a formal financial statement.

Is used to prove that there are no errors in the journal or ledger.

Provides a listing of every account in the chart of accounts.

For purposes of measuring business income, the life of a business is:

divided into discrete accounting periods.

divided into specific points in time.

considered to be a continuous cycle.

Adjusting entries at the end of an accounting period would not be required for which of the following

Revenue that has been earned and recorded in the accounting records.

Multiperiod costs that must be split among two or more accounting periods.

Multiperiod revenues that must be split among two or more accounting periods.

Expenses that have been incurred in a given period but not as yet recorded in the accounts.

Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. Which of the following journal entries would Blankenship ordinarily record on the Friday payday?

Salary Expense 10,000 Cash 10,000

Salary Expense 10,000 Salary Payable 10,000

Salary Payable 10,000 Cash 10,000

Salary Payable 10,000 Salary Expense 10,000

Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. What journal entry would be recorded (on Wednesday) if the end of the accounting period occurred on a Wednesday?

Salary Expense 6,000 Salary Payable 6,000

Salary Expense 6,000 Cash 6,000

Salary Payable 6,000 Cash 6,000

Salary Payable 6,000 Salary Expense 6,000

Blankenship Company pays its employees every Friday for work rendered that week. The payroll is typically $10,000 per week. Blankenship’s year-end occurred on Wednesday, at which time a correct adjusting entry was recorded. On the following Friday, which of the following payroll journal entries should be recorded?

Salary Expense 4,000 Salary Payable 6,000 Cash 10,000

Salary Expense 10,000 Cash 10,000

Salary Expense 6,000 Salary Payable 4,000 Cash 10,000

Salary Payable 10,000 Cash 10,000

PoA - Revision Final

Authored by Trung Nguyen

Business

University

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MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following statements is incorrect?

Assets - Capital = Liabilities

Liabilities + Capital = Assets

Liabilities + Assets = Capital

Assets - Liabilities = Capital

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following is not an asset?

Buildings

Cash balance

Trade receivables

Loan from K. Harris

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following is a liability?

Machinery

Trade payables for goods

Motor vehicles

Cash at bank

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following best describes the meaning of ‘Purchases’?

Items bought

Goods bought on time

Goods bought for resale

Goods paid for

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following should not be called ‘Sales’?

Office fixtures sold

Goods sold on time

Goods sold for cash

Sale of item previously included in ‘Purchases’

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following is correct?

Profit does not alter capital

Profit reduces capital

Capital can only come from profit

Profit increases capital

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which of the following best describes a trial balance?

It shows the financial position of a business

It shows the financial position of a businessIt is a special account

It shows all the entries in the books

It is a list of balances on the books

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PoA - Revision Final

Which of the following statements is incorrect?

Which of the following is not an asset?

Which of the following is a liability?

Which of the following best describes the meaning of ‘Purchases’?

Which of the following should not be called ‘Sales’?

Which of the following is correct?

Which of the following best describes a trial balance?

Is it true that the trial balance totals should agree?

Gross profit is

Net profit is calculated in th

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