Pearson A-Level Review Quiz 1

What is the primary purpose of a statement of profit or loss?

• To show the financial position of a business

• To calculate the net profit or loss of a business

• To track the cash inflows and outflows

• To reconcile control accounts

Which account is debited when a provision for irrecoverable debts is created?

• Trade Receivables

• Bank

• Sales Account

• Irrecoverable Debts Expense

In a manufacturing account, factory rent is classified as a direct cost.

• True

• False

The ___________ account is used to record changes in asset values when there are changes in a partnership.

A manufacturer’s data is as follows:

• Opening Inventory of Raw Materials: $5,000

• Purchases: $15,000

• Closing Inventory of Raw Materials: $4,000

What is the cost of raw materials consumed?

• $14,000

• $16,000

• $17,000

• $20,000

Which of the following is an example of a non-cash expense in a statement of profit or loss?

• Wages

• Interest on a loan

• Depreciation

• Cost of goods sold

Factory overheads include indirect costs such as factory rent, indirect materials, and depreciation on machinery.

• True

• False

A manufacturer’s data is as follows:

• Direct materials: $25,000

• Direct labor: $15,000

• Factory overheads: $10,000

• Opening work in progress: $5,000

• Closing work in progress: $8,000

What is the total cost of production?

• $47,000

• $52,000

• $53,000

• $55,000

X, Y, and Z are partners sharing profits in the ratio of 3:2:1. After revaluing assets, a revaluation surplus of $18,000 arises. How much of this will be credited to Y’s capital account?

• $6,000

• $3,000

• $9,000

• $12,000

10. The following balances relate to a partnership at the end of the year:

• Capital Accounts: A = $50,000, B = $30,000, C = $20,000

• Current Accounts: A = $5,000 (credit), B = $2,000 (credit), C = $1,000 (debit)

• Profit for the year: $24,000 (shared equally)

What will be the final balance on C’s Current Account after sharing the profit?

• $5,000

• $7,000

• $3,000

• $9,000