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Question text Choo Ltd invested $200 000 with a bank for one year at 12% on 1 September 2010 (interest payable at end of loan). What is the adjusting journal entry at balance date, 30 June 2011? Select one: a. Dr Accrued Revenue $18 000 Cr Interest Revenue $18 000 b. Dr Accrued Interest $20 000 Cr Interest Revenue $20 000 c. Dr Accrued Revenue $24 000 Cr Interest Revenue $24 000 d. Dr Unearned Revenue $18 000 Cr Interest Revenue $18 000

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Question text The statement that compares the balance as shown in the bank's records with the balance in the Cash at Bank account at a particular date is known as the: Select one: a. bank statement b. bank reconciliation statement c. bank control account d. cash flow statement

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Question text Consider the following information. A - Paid $20 000 of accounts payable B - Received $100 000 from accounts receivable C - Purchased inventory of $200 000 on credit D - Credit sales of $700 000 (cost of goods sold was $450 000) E - $10 000 of prepayments expired during the month What is the profit for the period? Select one: a. $120 000 b. $240 000 c. $250 000 d. none of the above

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Question text A $10 000 payment was made to accounts payable, as a result: Select one: a. an asset decreased and an expense decreased b. an asset decreased and a liability decreased c. an asset decreased and an expense increased d. a liability decreased and an expense increased
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Question text Additional credit sales of $2 million (cost price $1.5 million) are made on credit. This transaction will: Select one: a. increase net profit, increase cash, and increase total assets b. increase net profit, increase total assets but not affect cash c. increase net profit, and not affect cash or total assets d. none of the above
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Question text The trial balance of Anderson Ltd included the following balances: Debit Credit Accounts Receivable $35 000 Allowance for Doubtful Debts $4000 On 1 October 2009, an account for $1600 was determined to be uncollectable. The journal entry to be made on that date would include a debit to: Select one: a. Bad Debts Expense b. Accounts Receivable c. Allowance for Doubtful Debts d. none of the above

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Question text The allowance for doubtful debts account would appear in the balance sheet under: Select one: a. current assets b. current liabilities c. shareholders' equity d. property, plant and equipment
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Question text Red Shoes Ltd has gone bankrupt and will not pay $10 000 to XYZ. XYZ has accounts receivable of $12 million and an allowance for doubtful debts of $500 000. XYZ does not adjust the accounts for the $10 000 that will not be paid by Red Shoes Ltd. Which of the following statements is true about the balance sheet of XYZ? Select one: a. total assets are overstated b. total assets are understated c. net accounts receivable is correctly stated d. none of the above
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Question text On 1 May 2012, A Ltd pays $9600 for a one-year fire insurance policy that expires on 30 April 2013. Which of the following will appear on A Ltd's balance sheet at 30 June 2012? Select one: a. prepaid insurance $1600 b. prepaid insurance $8000 c. prepaid insurance $9600 d. prepaid insurance $8800.

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Question text In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for monthly service charge appearing on the bank statement, $45, is to: Select one: a. add it to the balance as per bank statement b. deduct it from the balance as per bank statement c. add it to the balance per company records d. deduct it from the balance per company records
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Question text At year-end Shifty Ltd had a balance of Accounts Receivable of $90 000 and an Allowance for Doubtful Debts of $4000. It was decided to write off the debt of Wriggler totalling $2500 as irrecoverable. It was further decided that the Allowance for Doubtful Debts should stand at 5% of Accounts Receivable. What was the journal entry needed to write off the debt of Wriggler as irrecoverable? Select one: a. Dr Bad Debts Expense..........$2500 Cr Accounts Receivable..........$2500 b. Dr Bad Debts Expense..........$2500 Cr Allowance for Doubtful Debts..........$2500 c. Dr Allowance for Doubtful Debts..........$2500 Cr Accounts Receivable..........$2500 d. none of the above
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Question text A credit balance in a customer's account in the Debtors ledger could be due to: Select one: a. increased credit sales in the period b. an overpayment by the customer c. a bad debt d. none of the above
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Question text In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a cheque outstanding at end of month, $450, is to: Select one: a. add it to the balance as per bank statement b. deduct it from the balance as per bank statement c. add it to the balance per company records d. deduct it from the balance per company records
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Question text Which of the following is NOT true of a sound system of internal control? Select one: a. implementation of controls involves costs b. a sound system of internal control is the responsibility of management c. all errors and irregularities should be eliminated d. a sound system of internal control is fundamental to the production of reliable financial reports
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The trial balance of Allen Ltd at balance date showed a credit balance of $5000 in the Allowance for Doubtful Debts account. Although the account of a customer outstanding at $1400 had been determined to be uncollectable, this had not been written off. What was the effect of this neglect on the year-end balance sheet? Select one: a. there was an understatement of total liabilities b. there was an overstatement of total assets and shareholders' equity c. there was an understatement of total assets and shareholders' equity d. there was no effect on total liabilities, assets or shareholders' equity

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Question text Gum Ltd maintains subsidiary ledgers for debtors and creditors. At 1 July 2008, debtors owed $4000, and $7200 was owing to creditors. Transactions for year ended 30 June 2009 were as follows:

What was the balance of the Creditors control account at 30 June 2009? Select one: a. $5200 b. $5500 c. $6000 d. none of the above
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A company declares and pays an interim dividend. This transaction will: Select one: a. decrease total assets and total shareholders' equity but have no effect on profit b. decrease total assets, total shareholders' equity and profit c. decrease total assets but have no effect on profit or shareholders' equity d. none of the above
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Question text In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for $650 that a customer paid directly into the company's bank account is to: Select one: a. add it to the balance as per bank statement b. deduct it from the balance as per bank statement c. add it to the balance per company records d. deduct it from the balance per company records

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Question text Which of the following is NOT a way that management can establish proper control over the enterprise's affairs? Select one: a. rotation of employees over a range of jobs

b. combining record-keeping with handling of assets c. carrying insurance on assets d. requiring staff to take annual leave

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Question text In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a deposit for $2300 not appearing on the bank statement is to: Select one: a. add it to the balance as per bank statement b. deduct it from the balance as per bank statement c. add it to the balance per company records d. deduct it from the balance per company records
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