Institute of Professional Studies and Accounting Services (IPSAS)

Bosasso, Puntland-Somalia.

Tel: 7790443/7970443

COURSE NAME: Diploma in Financial Accounting (Batch 26)

Date: 16th Nov. 2023
Class work-4
Student name: ______________________________________________________________
Instructions (30 marks): Work out ALL 15 questions. Each question carries 2 marks.

1) Debits :
A. Increase both assets and liabilities.
B. Decrease both assets and liabilities.
C. Increase assets and decrease liabilities.
D. Decrease assets and increase liabilities.
2) Which of the following which are correct?

Account to be debited Account to be credited

1. Van sold on credit to Ali Cash Van
2. Payment to a creditor by cash Creditor Cash
3. Purchase of a computer on credit Computer Creditor
4. We returned a computer to Hassan Computer Hassan
A. 1 and 3 only
B. 2 and 3 only
C. 1 and 2 only
D. 1 and 4 only
3) Which of the following statements is incorrect?
EFFECT UPON
_________________________________
ASSETS LIABILITIES
A. We paid a creditor by cheque. – Bank – creditors
B. A debtor paid us $90 cash + Cash – Debtors
C. Ali lent us $500 by cheque + Bank + Loan from Ali
D. Bought goods on credit + Stock + Capital

4) The proprietor pays a supplier out of his/her private funds. How should the supplier record this?

1
 S/N Account to be debited Account to be credited

A. Creditor’s account Capital account

B. Creditor’s account Bank account

C. Capital account Creditor’s account

D. Creditor’s account Cash account

5) Ahmed has recorded the following double entry in his books:

Dr Ali’s account Cr Cash account
What does this represent?
A. Cash purchase from Ali.
B. Cash receipt from Ali
C. Cash payment to Ali
D. Credit purchase from Ali
6) Complete the table below. The first is done for you:

S/N Transactions Account to be debited Account to be credited

a) Bought a computer from
Hillaac Computers on Computer account Hillaac Computers.
credit.
b) We received cash from
a debtor.
c) We paid to creditor by
cheque.
d) We sold some office
equipment no longer
needed to Ali on credit.
e) We received loan from
Dahabshil Bank.
The owner pays a
f) creditor from his private
funds.
g) We bought a lorry for
by cheque.
h) We returned a computer
to Hillaac Computers.
i) The proprietor took cash
for his/her own use.
j) We repaid part of the loan
from D/shil Bank.

Good luck.