Question

2.         Given the following, what is the amount of Capital? Assets: Premises $20,000; Inventory $8,500; Cash $100. Liabilities: Accounts payable $3,000; Loan from A.Adams $4,000:

1. $21,100

            b.   $21,600

            c.   $32,400

            d.   $21,400

                                         

3.         A debit balance of $100 in a cash account shows that:

1. There was $100 cash in hand

2. Cash has been overspent by $100

3. $100 was the total of cash paid out

4. The total of cash received was less than $100

                                                           

4.         Discounts received are:

1. None of the below

2. Deducted when we receive cash

3. Given by us when we sell goods on credit

4. Deducted by us when we pay our accounts

                                   

5.         Which of these best describes a Statement of Financial Position?

1. A listing of balances

2. A statement of assets       

3. A record of closing entries

4. An account proving the books balance

6.         Which one of the following categories of account is credited when it is decreased?

1. Revenue

2. Expenses

3. Liabilities

4. Source of funds    

7.         Given the figures showing: Sales $8,200, Opening Inventory $1,300, Closing Inventory $900, Purchases $6,400, Carriage Inwards $200, the Cost of Goods Sold figure is:

1. $6,800

            b.   $6,200

            c.   $7,000

            d.   Another Figure

8.        Carriage inwards is charged to the trading account because:

2. It is not part of motor expenses

            b.   It is an expense connected with buying goods

            c.   It should not go in the statement of financial position

            d.   Carriage outwards goes in the profit and loss account

           

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer - Part 2) - The correct answer is = B) $ 21600 Calculation Capital = assets - labilities = (20000+8500+100)-(3000+4000) 0 = $ 21600 1 2 Part 3) 3 The correct answer is 4 a) There was $ 100 cash inhand U 6 Explanation 7 debit balance of cash of $ 100 means there is cash with us of $ 100 8 9 Part 4) o The correct answer is 1 d) Deducted by us when we pay our accounts

3 Explanation 4 when ever the accounts payable are paid, the supplier offer cash discount which is deducted from purchases. 5 5 Part 5) 7 The correct answer is 3 b) A statement of assets Explanation 1 Statement of financial position contains the statement of assets held by the person. 2 3 Part 6) 4 The correct answer is 5 B) Expenses 5 7 Explanation 3 Expenses has favourable balance of debit, in order to decreases expenses are credited. 3 Part 7) 1 The correct answer is 2 C) $ 7000

43 44 Calculation 45 Cost of goods sold figure 46 = beginning inventory + purchases + carriage inward - ending inventory 47 = 1300+6400+200-900 48 = $ 7000 49 50 Part 8) 51 The correct answer is 52 B) It is expenses connected with buying goods 53 54 Calculation 55 Carriage inward expenses is related to buying the goods hence these are expensed in trading account. 56