‭ . What is the purpose of accounting?

‬
1
‭A. to prepare the trial balance‬
‭B. to record all the business documents‬
‭C. to prepare financial statements at regular intervals‬
‭D. to record all the financial transactions of the business‬

‭2. Which are examples of book-keeping?‬

‭1 Entering details of a cheque received from a customer in a cash book‬
‭2 Entering details of goods purchased on credit in a purchases journal‬
‭3 Producing an income statement to calculate the profit for the year‬
‭4 Recording details of credit sales in the account of a credit customer‬
‭A. 1, 2 and 3‬
‭B. 1, 2 and 4‬
‭C. 1 and 2‬
‭D. 3 and 4‬

‭ . What is the purpose of book-keeping?‬

3
‭A. to interpret the double entry records‬
‭B. to prepare financial statements at regular intervals‬
‭C. to record all the financial transactions of the business‬
‭D. to summarise the financial position of the business‬

‭ . What are assets?‬

4
‭A. items that are bought for long-term use by a business‬
‭B. items that are expected to be turned into cash in the near future‬
‭C. items that are owned by or owed by a business‬
‭D. items that are owned by or owed to a business‬

‭5. Sam owns a stationery shop. The following balances appear in his business’s accounts:‬
‭Equipment $10 000‬
‭Bank Overdraft $1 200‬
‭Cash $3 000‬
‭Loan to employee $500‬
‭Trade Payables $2 700‬
‭Inventory $2 300‬
‭What is the amount of the owner’s equity?‬
‭A. $10 900‬
‭B. $11 900‬
‭C. $13 300‬
‭D. $14 300‬
‭ . Which task would be carried out by an accountant?‬
6
‭A. Preparing trial balance‬
‭B. Preparing the books of prime entry‬
‭C. Writing up the ledger accounts‬
‭D. Preparing financial statements‬

‭ . What is the accounting equation?‬

7
‭A. assets = capital – liabilities‬
‭B. assets = liabilities – capital‬
‭C. assets – liabilities = capital‬
‭D. assets + capital = liabilities‬

‭ . What is a credit transaction?‬

8
‭A. A transaction where payment is made by cheque.‬
‭B. A transaction where payment is made immediately.‬
‭C. A transaction where payment is made at a later date.‬
‭D. A transaction where payment is made by credit card.‬

‭9. A business had the following assets and liabilities.‬

‭ ow much is the owner’s equity (capital)?‬

H
‭A. $11 000‬
‭B. $12 000‬
‭C. $13 000‬
‭D. $14 000‬

‭ 0. 7. Which of the following contains only assets?‬

1
‭A. Cash, equipment, machinery, trade receivables‬
‭B. Stationery, equipment, machinery, trade receivables‬
‭ . Bank loan, trade receivables, equipment, vehicle‬
C
‭D. Cash, fixtures, furniture, trade payables‬

‭ 1. Which would be recorded by a credit entry in an account?‬

1
‭A. a decrease in capital‬
‭B. a decrease in liabilities‬
‭C. an increase in assets‬
‭D. an increase in income‬

‭ 2. Which of the following contains only income?‬

1
‭A. rent received, trade receivable, interest received‬
‭B. sales, commission received, trade receivable‬
‭C. fees received, interest received, sales‬
‭D. wages, rent received, commission received‬

‭ 3. Which of the following contain an item that is not an expense?‬

1
‭A. Wages, carriage inwards, stationery.‬
‭B. Wages, advertising, carriage outwards.‬
‭C. Advertising, stationery, drawings.‬
‭D. Rent, wages, insurance.‬

‭ 4. What is owner’s equity?‬

1
‭A. Amount owed to lenders‬
‭B. Monetary value that the business owns‬
‭C. Amount the business owes to its owner‬
‭D. Returns received by the owner‬

‭15. Which are examples of cash transactions?‬

‭1 Purchase of computer and payment by debit card.‬
‭2 Sold goods and immediate receipt of bank transfer.‬
‭3 Bought goods on credit from Elephant Supplies.‬
‭4 Exchanged old machinery with old equipment.‬
‭A. 1 and 2‬
‭B. 2 and 4‬
‭C. 1 and 3‬
‭D. 3 and 4‬

‭ 6. Which of the following statements best describes return inwards?‬

1
‭A. The return of goods from the business to the customers.‬
‭B. The return of goods from the customers to the business.‬
‭C. The return of goods from the business to the suppliers.‬
‭D. The return of assets from the business to the customers.‬
‭ 7. Shin Yi is a trader. She took goods costing $500 for her own use.‬
1
‭How would Shin Yi record this in her ledger?‬

‭ ccount to be debited‬
A ‭ ccount to be credited‬
A
‭ .‬
A ‭Drawings‬ ‭Inventory‬
‭B.‬ ‭Drawings‬ ‭Purchases‬
‭C.‬ ‭Inventory‬ ‭Drawings‬
‭D.‬ ‭Purchases‬ ‭Drawings‬

‭ 8. Bubbles purchased equipment on credit from Blossom.‬

1
‭What entry should Bubbles make in her books?‬

‭Debit: _______________________ Credit: ________________________‬

‭ 9. Keanrich is a sole trader. He purchased an equipment on credit from Eunice.‬

1
‭How did Keanrich record this?‬

‭Debit: _______________________ Credit: ________________________‬

‭ 0. A loan to an employee is an example of‬

2
‭A. an asset‬
‭B. a liability‬
‭C. an expense‬
‭D. an income‬

‭ 1. A trade receivable’s account was written off a few years back. This trade receivable had‬
2
‭recently repaid his debt to the business by bank transfer. How should the business record this?‬

‭Debit: _______________________ Credit: ________________________‬

‭22. A trader made the following entries in his accounting records.‬

‭ ccount debited‬
A ‭ ccount credited‬
A
‭Chris‬ ‭Returns outwards‬

‭ hat did he record?‬

W
‭A. Return of faulty goods to a credit supplier.‬
‭B. Return of faulty goods from a credit customer.‬
‭C. Refund from a credit supplier.‬
‭D. Refund to a credit customer.‬
‭23. Amanda returns goods bought on credit from Ben. How does Ben record this in his books?‬

‭Debit: _______________________ Credit: ________________________‬

‭ 4. Levana returns goods bought on credit from Rio.‬

2
‭How does Rio record this in her books?‬

‭Debit: _______________________ Credit: ________________________‬

‭ 5. Lysandra bought goods on credit costing $2 750. What is the double entry for this‬
2
‭transaction?‬

‭Debit: _______________________ Credit: ________________________‬

‭ 6. A trader purchases a supply of office paper on credit. How should this transaction be‬
2
‭recorded?‬

‭Debit: _______________________ Credit: ________________________‬

‭ 7. Which of the following statements best describes sales return?‬

2
‭A. The return of goods from the business to the customers.‬
‭B. The return of goods from the customers to the business.‬
‭C. The return of goods from the business to the suppliers.‬
‭D. The return of goods from the suppliers to the business.‬

‭ 8. Which of the following statements best describes purchase returns?‬

2
‭A. the return of goods from the business to the suppliers.‬
‭B. the return of goods from the customers to the business.‬
‭C. the return of goods from the supplier to the business.‬
‭D. the return of goods from the business to the customers.‬
‭1.‬ E
‭ unice has recently set up a small shop to sell cupcakes.‬
‭She provides the following information for the month of June 2023.‬

‭ 023‬
2
‭June‬ ‭1 Started a business with $500 in cash and $4 500 in the bank.‬
‭4 Paid for rent by cheque $1 500.‬
‭7 Bought goods $4 000, on credit from Tracy.‬
‭15 Sold goods and received cash $800 and a cheque, $2 500.‬
‭20 Paid for advertising by cash $195.‬
‭23 Bought goods, $1 100 and paid by cheque.‬
‭25 Eunice took $220 from the business bank account to buy a Korean‬
‭skincare set for herself.‬

‭ ecord the above transactions in the following ledger accounts. Balance the ledger‬
R
‭accounts.‬

‭2.‬ A
‭ shley decided to set up a business selling phone covers. The following are the‬
‭transactions for the month of October 2024.‬

‭ 024‬
2
‭October‬ ‭‬
1 ‭ shley contributed $250 into the business cash account.‬
A
‭4‬ ‭Purchased stationery, $50, using cash.‬
‭8‬ ‭Bought phone covers, $300, on credit from Owen.‬
‭10‬ ‭Sold phone covers, $180, and received cash.‬
‭19‬ ‭Ashley returned phone covers worth$100 that she bought from‬
‭Owen.‬
‭25‬ ‭Sold phone covers, $90, and received cash.‬

‭ nter the above transactions in the ledger for Ashley for the month of October 2024.‬
E
‭Balance the account and bring down the balance on 1 November 2024.‬