Question 1

The bank notifies the company of fees for the month already taken out of the company's bank account. The transaction should be recorded as:

Accepted Answer

A)   Dr Bank chargesCr Accounts payable
B)   Dr Bank chargesCr Expenses payable
C)   Dr Bank chargesCr Cash
D)   No entry is required.E) B) and D)
F) B) and C)

Question 2

Which of the following is an internal transaction?

Accepted Answer

A)   Payment of dividends to shareholders
B)   Loan to a director
C)   Depreciation of equipment
D)   Purchase of machinery on creditE) B) and C)
F) C) and D)

Question 3

On 30 June, Dawes Pty Ltd receives an account for TV advertising for the month of June. It is not due for payment until August. The transaction would be recorded as:

Accepted Answer

A)   Dr Expenses payableCr Advertising expense
B)   Dr Advertising expenseCr Prepaid expenses
C)   Dr Prepaid expensesCr Expenses payable
D)   Dr Advertising expenseCr Expenses payableE) All of the above
F) A) and B)

Question 4

Which of the following is an accounting transaction?

Accepted Answer

A)   Make a purchase order.
B)   Establish a bank overdraft.
C)   Hire a new staff member.
D)   Sign a new contract.E) A) and B)
F) B) and D)

Question 5

A trial balance would detect which of the following errors?

Accepted Answer

A)   Failure to record depreciation for the year.
B)   A credit purchase recorded in accounts payable account as $927 instead of $972.
C)   A cash purchase of inventory recorded as a debit to plant and a credit to accounts payable.
D)   A salesman failing to record a cash sale, and retaining the proceeds.E) B) and C)
F) A) and D)

Question 6

Which of the following errors, each considered individually, would cause the trial balance totals to be unequal?

Accepted Answer

A)   A transaction was not posted.
B)   A payment of $64 for supplies was posted as a debit of $46 to Supplies and a credit of $46 to cash.
C)   A payment of $131 to a creditor was posted as a debit of $131 to accounts payable and a debit of $131 to accounts receivable.
D)   Cash received from customers on account was posted as a debit of $240 to cash and a credit of $240 to accounts payable.E) A) and D)
F) A) and C)

Question 7

What source document supports the provision of services on credit?

Accepted Answer

A)   Supplier's invoice received by the business
B)   A copy of a credit note issued by the vendor
C)   Cash receipt
D)   Invoice sent by the business to a customerE) A) and D)
F) A) and C)

Question 8

The journal entry for the receipt of cash from accounts receivable is:

Accepted Answer

A)   Dr CashCr Sales revenue
B)   Dr Accounts receivableCr Sales revenue
C)   Dr CashCr Accounts receivable
D)   Dr SalesCr Accounts receivableE) A) and C)
F) B) and D)

Question 9

A chart of accounts is:

Accepted Answer

A)   a means of ensuring that the debits equal the credits.
B)   a chronological record of all transactions.
C)   a list of the titles of all accounts in the ledger, together with an appropriate numbering system for the accounts.
D)   a trial balance.E) B) and C)
F) A) and D)

Question 10

If the two totals of a trial balance are not equal, it could be due to:

Accepted Answer

A)   failure to record a transaction.
B)   recording the same erroneous amount for both the debit and the credit parts of a transaction.
C)   an error in determining the account balances, such as an incorrectly computed balance.
D)   recording the same transaction more than once.E) A) and B)
F) None of the above

Question 11

The following accounts were taken from the trial balance:

Net profit for the period is:

Accepted Answer

A)   $10 000.
B)   $11 000.
C)   $12 000.
D)   $12 500.E) A) and B)
F) A) and C)

Question 12

Supplies purchased on account were incorrectly recorded as office equipment. The correcting entry would be:

Accepted Answer

A)   Dr SuppliesCr Office equipment
B)   Dr Accounts payableCr Supplies
C)   Dr Office equipmentCr Supplies
D)   Dr SuppliesCr Accounts payableE) A) and C)
F) B) and C)

Question 13

Which of the following statements about a trial balance is true?

Accepted Answer

A)   A trial balance is one of the financial statements provided to shareholders at the close of the financial period.
B)   A trial balance will detect if a transaction was not recorded.
C)   The sum of the debits is not necessarily the same as the total of the assets side of the balance sheet.
D)   None of the statements are true.E) A) and B)
F) All of the above

Question 14

Which of the statements about closing the accounts is NOT true?

Accepted Answer

A)   Revenue accounts are debited.
B)   A net profit is credited to the retained profits account.
C)   Expense accounts are credited.
D)   Dividends received are credited.E) A) and B)
F) A) and C)

Question 15

Which of the following accounts does NOT appear on a post-closing trial balance?

Accepted Answer

A)   Insurance expense
B)   Prepaid rent
C)   Accumulated depreciation
D)   Retained profitsE) All of the above
F) B) and D)

Question 16

Which of the following is NOT a source document?

Accepted Answer

A)   Invoice
B)   Cash register listings
C)   Goods received advice
D)   Journal entryE) A) and C)
F) None of the above

Question 17

A chart of accounts is:

Accepted Answer

A)   a depiction of the significant and formal relationships and roles within a business organisation.
B)   a list, in some logical form, of all relevant transactions in a business organisation.
C)   a list, in chronological order, of journal accounts used in an accounting system.
D)   a list of the complete set of account titles and their related reference numbers.E) A) and B)
F) All of the above

Question 18

ABC paid $1 million for a business and acquired the following assets and liabilities:

Which of these entries would be made for goodwill?

Accepted Answer

A)   Dr Goodwill $50 000
B)   Dr Goodwill $950 000
C)   Cr Goodwill $200 000
D)   Goodwill is not entered in the accounts until the business is sold.E) A) and C)
F) B) and D)

Question 19

The total of the debit column of the trial balance exceeds that of the credit column by $27. Which of the following errors could NOT have caused this?

Accepted Answer

A)   A credit of $13.50 inadvertently posted to the debit of the account concerned.
B)   An item of $27 debited, but not credited to any account.
C)   Omission of a credit purchase of $27 from the journal.
D)   In posting a transaction to the ledger, the credit was correctly recorded as $36, but the debit was recorded as $63.E) A) and D)
F) A) and C)

Question 20

Identify the correct classification for the following four ledger accounts:

Accepted Answer

A)   1 expense, 2 expense, 3 asset, 4 expense.
B)   1 expense, 2 asset, 3 revenue, 4 liability.
C)   1 asset, 2 asset, 3 revenue, 4 liability.
D)   1 asset, 2 asset, 3 asset, 4 liability.E) All of the above
F) A) and C)

Exam 4: Record-Keeping

Which of the following is an internal transaction?

Correct AnswerverifiedShow Answer

Which of the following accounts does NOT appear on a post-closing trial balance?

Correct AnswerverifiedShow Answer

The journal entry for the receipt of cash from accounts receivable is:

Correct AnswerverifiedShow Answer

A chart of accounts is:

Correct AnswerverifiedShow Answer

The bank notifies the company of fees for the month already taken out of the company's bank account. The transaction should be recorded as:

Correct AnswerverifiedShow Answer

Which of the following is NOT a source document?

Correct AnswerverifiedShow Answer

What source document supports the provision of services on credit?

Correct AnswerverifiedShow Answer

Which of the following is an accounting transaction?

Correct AnswerverifiedShow Answer

Which of the statements about closing the accounts is NOT true?

Correct AnswerverifiedShow Answer

The total of the debit column of the trial balance exceeds that of the credit column by $27. Which of the following errors could NOT have caused this?

Correct AnswerverifiedShow Answer

On 30 June, Dawes Pty Ltd receives an account for TV advertising for the month of June. It is not due for payment until August. The transaction would be recorded as:

Correct AnswerverifiedShow Answer

Supplies purchased on account were incorrectly recorded as office equipment. The correcting entry would be:

Correct AnswerverifiedShow Answer

If the two totals of a trial balance are not equal, it could be due to:

Correct AnswerverifiedShow Answer

Identify the correct classification for the following four ledger accounts:

Correct AnswerverifiedShow Answer

A trial balance would detect which of the following errors?

Correct AnswerverifiedShow Answer

Which of the following statements about a trial balance is true?

Correct AnswerverifiedShow Answer

Which of the following errors, each considered individually, would cause the trial balance totals to be unequal?

Correct AnswerverifiedShow Answer

A chart of accounts is:

Correct AnswerverifiedShow Answer

ABC paid $1 million for a business and acquired the following assets and liabilities: Which of these entries would be made for goodwill?

Correct AnswerverifiedShow Answer

The following accounts were taken from the trial balance: Net profit for the period is:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified