MAN1068 Quick Test (Attempt in 25 minutes – 1 mark each)

1. A grocery retailer total sales in its books of accounts should include the value of:

a. Motor vehicles sold for cash only.

b. Motor vehicles sold on credit only.
c. Motor vehicles sold for cash and credit.
d. None of the above.

2. Which of the following statement is correct?

a. In accounting, only companies are considered separate from their owners.

b. In law, companies’ shareholders are personally liable for the business debts.
c. In accounting, all business entities are considered separate from their
owner(s).
d. None of the above.

3. The term “purchases” in accounting refers to:

a. Goods bought on credit only.

b. All items bought by the business.
c. Goods bought for cash only.
d. Goods bought for resale only.

4. When a business receives cash from one of its debtors, the effect on the accounting
equation is:

a. An increase in assets and an increase in liabilities

b. No change to the accounting equation
c. An increase in assets and an increase in capital
d. A decrease in assets and an increase in capital

5. Which of the following could result from a decrease in a firm’s fixed assets?

a. No change in current assets, total liabilities and capital

b. A corresponding increase in current assets and capital but no change in total
liabilities
c. A corresponding decrease in current assets and no change in total liabilities
and capital
d. A corresponding increase in current assets only and no change in total
liabilities and capital

Vicky: v.milligan@surrey.ac.uk;Office 64MS02

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MAN1068 Quick Test (Attempt in 25 minutes – 1 mark each)

6. When a sole trader purchases equipment on credit to be used in the business, the
double entry to record this transaction is in its books of accounts will be to:

a. Dr Purchases a/c Cr Equipment a/c

b. Dr Equipment a/c Cr Bank a/c
c. Dr Purchases a/c Cr Bank a/c
d. Dr Equipment a/c Cr Creditor’s a/c

7. In the accounts of J. Byrne, which of the double entries is the correct way to record
goods returned by P. Jack, a credit customer?

a. Dr Returns Inwards a/c Cr P. Jack a/c

b. Dr P. Jack a/c Cr Returns Inwards a/c
c. Dr Returns Outwards a/c Cr P. Jack a/c
d. Dr P. Jack a/c Cr Returns Outwards a/c

8. How would a business record rent receivable by cheque in its books of accounts by
subletting part of its premises?

a. Dr Rent a/c Cr Bank a/c

b. Dr Rent a/c Cr Creditor a/c
c. Dr Creditor a/c Cr Rent a/c
d. Dr Bank a/c Cr Rent a/c

9. When a bank loan is due for payment within the next six months, it should be
recorded as a:

a. Current asset
b. Non-current asset
c. Non-current liability
d. Current liability

10. A business capital at any particular date is equal to

a. The sum of its fixed assets plus long term liabilities

b. The sum of its total assets plus total liabilities
c. The total of its net assets at that date
d. The sum of all assets less current liabilities

Vicky: v.milligan@surrey.ac.uk;Office 64MS02

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