Mirchawala’s Hub Of Accountancy:

FA1:Recording Financial Transactions:

Mock Exam 3:
Question#1:
Vic’s receivables ledger balances total $50,000 which does not agree with his trade receivables
ledger control account. On investigation, the following errors were discovered:
(1) A bank credit transfer from a credit customer of $750 was not recorded in the receivables ledger
(2) A contra entry of $2,000 was entered into the control account but not in the receivables and
payables ledgers
What should the total of the balances of Vic’s receivables ledger be after correcting for the errors?
A. $49,250
B. $47,250
C. $52,750
D. $50,000
Question#2:
Which of the following is an asset?
A. The capital of a business
B. An overdraft
C. Money owed by a business
D. Machinery owned by a business
Question#3:
Which of the following is the correct entry to record buying goods on credit form a supplier?
A. Dr Payables Cr Purchases
B. Dr Receivables Cr Sales
C. Dr Purchases Cr Payables
D. Dr Sales Cr Receivables
Question#4:
Which of the following would be on the credit side of the trade payables control account?
A. Purchases
B. Contras with the trade receivables control account
C. Purchase returns
D. Payment to suppliers
Question#5:
Bharvinda offers customers a 5% settlement discount if they pay within ten days. Bharvinda sold
goods to Jacob on 4 march 20X8 and did not expect Jacob to take advantage of the settlement
discount. Jacob paid for the goods on 12 March 20X8.
What is the journal entry to record the payment on 12 March 20X8 in the records of Bharvinda?
A. Dr Bank Cr Receivables
B. Dr Sales Cr Receivables
C. Dr Bank Cr Receivables Cr Sales
D. Dr Bank Dr Sales Cr Receivables
Question#6:
Which of the following is correct?
A. Assets-Capital=Liabilities
B. Liabilities -Capital=Assets
C. Capital-Liabilities=Assets
D. Assets + Liabilities=Capital
Question#7:
What document is a proof of payment?
A. Advice note
B. Invoice
C. Delivery note

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D. Receipt
Question#8:
Ailsa purchased goods from her supplier and was offered a 3% discount if she paid within 30 days.
Which of the following should Ailsa post to record the discount given by her supplier?
A. Dr Payables Cr Purchases
B. Dr Purchases Cr Payables
C. Dr Payables Cr Discounts received
D. Dr Discounts received Cr Payables
Question#9:
Warren had a positive cash balance of $430.60 in his cash book. When performing a bank
reconciliation he discovered that he had not recorded a standing order payment of $80.
After this error has been corrected what will be the balance both in his cash book and on his bank
statement?
A. Cash book $510.60 Dr Bank statement $510.60 Cr
B. Cash book $510.60 Cr Bank statement $510.60 Dr
C. Cash book $350.60 Cr Bank statement $350.60 Dr
D. Cash book $350.60 Dr Bank statement $350.60 Cr
Question#10:
Which of the following accounts is an expense account?
A. Rent paid
B. Discounts received
C. Ebeneezer (a customer)
D. Kamalar (a supplier)
Question#11:
Shazheena offers a 2% trade discount to all customers whose purchases exceed £1,000. The trade
discount increases to 7% if a customer’s purchases exceed $5,000. She sells goods to Alan with a list
price of $5,200.
What will be the total on the invoice she sends to Alan? (ignore sales tax)
A. $4,940
B. $5,096
C. $4,836
D. $5,086
Question#12:
Which of the following errors would require a suspense account in order for the trial balance to
balance?
A. A debit balance of $7,300 for motor expenses in the trial balance actually related to the
purchases of a motor van
B. The sales day book has been overstated by $3,200
C. A purchase invoice of $562 has been omitted from the books of prime entry
D. Irrecoverable debts expense has been recorded as a credit balance in the trial balance
Question#13:
Which business document authorises a payment to a supplier?
A. Internal cheque requisition
B. Purchase requisition
C. Advice note
D. Remittance advice
Question#14:
Farsa returned some goods to Kerry, a credit supplier, because they were unsuitable.
Which of the following would correctly document the return?
(1) Farsa sends Kerry a debit note
(2) Farsa sends Kerry a credit note

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(3) Kerry sends Farsa a debit note

(4) Kerry sends Farsa a credit note
A. 2 and 4
B. 2 and 3
C. 1 and 3
D. 1 and 4
Question#15:
How should the total of discounts column on the cash payment side of the cash book be posted to
the general ledger?
A. Dr Discounts received Cr Receivables control
B. Dr Payables control Cr Discounts received
C. Dr Discounts received Cr Payables control
D. Dr Receivables control Cr Discount received
Question#16:
May has purchased goods for resale from a supplier for $315.She has agreed to pay for them in 30
days time.
Which of the following is the correct entry for May to record this transaction?
A. Dr Sales $315 Cr Receivables $315
B. Dr Payables $315 Cr Purchases $315
C. Dr Receivables $315 Cr Sales $315
D. Dr Purchases $315 Cr Payables $315
Question#17:
The following statements relate to an aged receivables analysis:
(1) An aged receivables analysis is a report listing all the suppliers of a business, how much they are
owed and for how long the amount has been outstanding
(2) An aged receivables analysis is a report that is useful for identifying late payers and for providing
information on debt collection efficiency to the management
Which of the above statements is/are correct?
A. Neither statement
B. Both statement
C. Statement 1 only
D. Statement 2 only
Question#18:
What does a paying-in slip give details of?
A. The amount of cash and cheques paid into the bank
B. The cheques paid out to suppliers
C. The invoice a customers is paying
D. The credit card payments made by customers
Question#19:
The balance on the payables ledger control account is $3,300 but the total of the individual trade
payables ledger account is $4,900.
Which of the following could account for the difference?
A. Discounts received of $1,600 omitted from the control account
B. Discounts received of $1,600 omitted from the individual accounts
C. A balance of $1,600 owing to Bob Smith omitted from the total of the individual ledger accounts
D. The Purchase day book is overcast by $1,600
Question#20:
The following statements relate to the coding of transaction:
(1) Faceted codes are made up of a number of sections, each section of the code representing a
different feature of the item
(2) Sequence code include a descriptive element to make it easy to find the right code

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Which of the above statement is/are correct?

A. Neither statement
B. Statement 2 only
C. Statement 1 only
D. Both statements
Question#21:
With an imprest system of petty cash which of the following is correct?
A. Vouchers + Cash held = Imprest
B. Imprest + Vouchers = Cash held
C. Cash held + Imprest = Vouchers
D. Cash held – Vouchers = Imprest
Question#22:
Which of the following types of account would normally have credit balances in a trial balance?
(1) Asset accounts
(2) Liability accounts
(3) Income accounts
(4) Expense accounts
A. 2 and 3
B. 2 and 4
C. 1 and 4
D. 1 and 3
Question#23:
Which department within an organization is MOST affected by data protection legislation?
A. Product research and development
B. Treasury
C. Purchasing
D. Human resource
Question#24:
When a cheque is crossed A/C payee which of the following is true?
A. It does not have to go through a clearing system
B. It can be endorsed
C. It can be cashed by any type of business
D. It must be paid into the account of the person named on the cheque
Question#25:
Which of the following describes a sales invoice?
A. A document sent to a potential customers quoting the price for goods
B. A written statement of the amount of money that has been paid to the customer
C. A written request to a credit customer for payment giving details of items sold
D. A written request for payment from a supplier giving details of items purchased
Question#26:
Xyon buys machinery from Zavlax for $10,000 agreeing to pay in 30 day’s time?
What is the correct double entry to record this transaction in Xyon’s books?
A. Dr Purchases Cr Payables
B. Dr Machinery Cr Payables
C. Dr Purchases Cr Cash
D. Dr Machinery Cr Cash
Question#27:
Dean owed Hadley $192.00 but was declared bankrupt and was only able to pay his credit suppliers
$0.30 for every $1 outstanding.
How should Hadley record the payment from Dean in his ledger?
A. Dr Cash $57.60 Dr irrecoverable debts $134.40 Cr Receivables $192.00

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B. Dr Irrecoverable debts $134.40 Cr Payables $134.40

C. Dr Irrecoverable debts $57.60 Cr Receivables $57.60
D. Dr cash $57.60 Cr Irrecoverable debts $134.40 Cr Payables 192.00
Question#28:
Juliette paid a supplier $240 after taking advantage of a 5% settlement discount received. She also
made a credit purchase from another supplier on the same day.
Which two books of prime entry would the above transactions be recorded in?
A. Cash receipts books and purchase day book
B. Cash receipts book and sales day book
C. Cash payments book and purchase day book
D. Cash payment book and sales day book
Question#29:
Which of the following employee related expenses would be paid out of petty cash?
A. The purchase of a car to be driven by the sales director
B. Payment of pensions contribution
C. Payment of monthly salaries for the production staff
D. Payments of taxi journeys for employees occasionally working late
Question#30:
Which double entry would record the sale of goods to customer on credit?
A. Dr Sales Cr Receivables
B. Dr Payables Cr Sales
C. Dr Receivables Cr Sales
D. Dr Sales Cr Payables
Question#31:
Sogo Co has credit accounts set up all of its suppliers.
Which of the following are reasons why a particular supplier account may not reconcile to the
supplier’s statement?
(1) Sogo Co recently sent a payment by cheque in the post to the supplier
(2) The supplier recently sent Sogo Co a credit note which Sogo Co has not recorded on the supplier
account
(3) The supplier recently purchased goods from Sogo Co and has entered a contra on Sogo Co’s
customer account. Sogo Co has not entered the same contra
(4) There is a dispute between Sogo Co and the supplier over a particular invoice which both parties
have recorded in their accounts
A. 1,2 and 3
B. 1 and 2 only
C. 3 and 4
D. 1,2 and 4
Question#32:
Johan had a debit balance in his cash book of $2,312 but his bank statement showed he was in credit
by $3,425.
Which of the following would explain the difference?
A. Outstanding lodgements of $1,113
B. Unpresented cheques of $5,737
C. Outstanding lodgements of $5,737
D. Unpresented cheques of $1,113
Question#33:
Which of the following would be on the debit side in the trade receivables control account?
A. Cash received
B. Sales
C. Irrecoverable debts

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D. Credit notes
Question#34:
Bank purchased items of stationary paying by cheque.
What is the double entry to record this?
A. Dr Petty cash Cr Stationary
B. Dr Stationary Cr Bank
C. Dr Stationary Cr Petty cash
D. Dr Bank Cr Stationary
Question#35:
A suspense account has been opened showing a credit balance of $560 in order to balance the trial
balance.
Which one of the following could be the reason for the suspense account?
A. Opening inventory of $560 omitted from the trial balance
B. Purchase of a van for $560 recorded as a motor expense
C. A bank overdraft of $280 shown as a positive cash balance
D. Receivables recorded in the trial balance as $3,620 instead of $4,180
Question#36:
Bertha had a credit balance of $4,697 on her suspense account. The following errors were then
discovered:
(1) Inventory of $2,672 had been omitted from the trial balance
(2) Capital brought forward of $10,000 had been included on the debit side of the trial balance
(3) A cash payment of $2,600 had been included twice in the cash account
After adjusting for the above errors what is the outstanding balance on the suspense account?
A. $10,031 Dr
B. $14,769 Cr
C. $5,375 Cr
D. $15,231 Dr
Question#37:
At the beginning of May Barbara has a receivables account balance of $42,390. During May she has
the following transactions:
$
Sells goods on credit 12,380
Makes cash sales 3,890
Receives cash from credit customers 8,490
Writes off irrecoverable debts 695
Returns from credit customers 426
What is the balance on Barbara’s receivables account at the end of May?
A. $45,159
B. $49,049
C. $2,769
D. $6,659
Question#38:
Anton is employed at an annual salary of $20,800. He is contracted to work 40 hours per week, 52
weeks a year (including 5 wees paid holiday). If overtime has to be worked the first six hours of
overtime in any week are not paid for. Any overtime in excess of six hours in a week is paid for at
time and a half.
During one week Anton worked 9 hours of overtime.
What will be Anton’s overtime pay for the week?
A. $45
B. $30
C. $135

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D. $445
Question#39:
The sales ledger control account had a balance of $32,920 but the list of customer balances totalled
$35,760
Which of the following would explain the difference?
A. A contra of $2,840 with the purchase ledger has not been done in the control account
B. The trade receivables column of the cash receipts book is understated by $2,840
C. A customer balance of $2,840 has been omitted from the list of customer balances
D. The sales day book total is understated by $2,840
Question#40:
Which of the following would normally be on the same side in the trial balance?
A. Receivables and Purchases
B. Sales and Drawings
C. Loan liabilities and Interest expense
D. Payables and wages and salaries expense
Question#41:
Gustav is invoicing a customer for goods with a list price of $8,000. The customer is given:
(1) A trade discount of 10%
(2) A settlement discount of 5% if the invoice is paid within 28 days
The customer is expected to take advantage of settlement discount
How much should the customer pay if payment in full is made in 21 days?
A. $7,200
B. $7,600
C. $6,840
D. $8,000
Question#42:
Nanette works for Piroz and is paid a basic wage of $1,000 a week. Piroz operates the following
scheme:
(1) Each employee gets bonus of $4 for every unit they produce in excess of 2,000 units for the
week
(2) If total production is more than 15% higher than the target production for that week an
additional bonus of 8% of the basic wage for the week is paid to each employee
In week 26 the target set by Piroz was 40,000 units and actual production was 39,200 units.
Nanette produced 2,600 of these.
What is Nanette’s bonus for the week 26?
A. $2,480
B. $3,480
C. $3,400
D. $2,400
Question#43:
The balance on the list of supplier balances of $15,950 does not agree with the purchase ledger
control account. It is subsequently found that a credit note issued by a supplier for $680 was missed
from the list of balances and that the purchase day book was undercast by $1,220
What is the corrected total on the purchase ledger control account?
A. $15,270
B. $16,490
C. $16,630
D. $17,850
Question#44:
Malcolm purchased goods from Wendy with a value of $4,900. He paid cash of $2,900 immediately
and agreed to pay the rest in 30 days.

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What is the correct double entry to record this transaction in Wendy’s accounts?
A. Sales Cr $2,900 Cash Cr $2,000 Receivables Dr $4,900
B. Sales Dr $2,000 Cash Dr $2,900 Receivables Cr $4,900
C. Sales Dr $4,900 Cash Cr $2,900 Receivables Cr $2,000
D. Sales Cr $4,900 Cash Dr $2,900 Receivables Dr $2,000
Question#45:
Pavan has a year end of 30 November 20X8. On 30 November 20X8 she buys a car on credit to use
solely in her business.
Which parts of business accounting equation will change as a result of the purchase of the car?
A. Capital and Profit
B. Assets and Liabilities
C. Assets and Profit
D. Capital and Liabilities
Question#46:
Javesh has a basic salary of $3,200 for November. His income tax on the salary is $640 and he pays
state benefit contribution of $290. His employer also pays state benefit contributions of $340 and
pension contributions for Javesh of $160.
How much will Javesh receive as his net pay for November?
A. $2,270
B. $1,770
C. $1,930
D. $2,770
Question#47:
Which one of the following is a reason for preparing a receivables ledger reconciliation?
A. To confirm the accuracy of posting
B. To identify overdue accounts
C. To calculate irrecoverable debts
D. To check the calculation of gross profit
Question#48:
On December 20X8 Pavel received a loan of $5,000 to help finance his business. He paid interest of
5% for the year on 30 November 20X9
Which of the following is the correct treatment for interest expense?
A. Dr Bank Cr Loan
B. Dr Loan Cr Bank
C. Dr Bank Cr Interest expense
D. Dr Interest expense Cr Bank
Question#49:
At the beginning of October Simon has total trade receivables of $26,700. During October he has the
following transactions:
$
Credit sales 75,500
Cash receipts from customers 80,000
Sales returns 700
Irrecoverable debts 2,000
What is the balance on Simon’s trade receivables account at the end of October?
A. $19,500
B. $23,900
C. $28,500
D. $20,900
Question#50:
The following has been extracted from Gordon’s purchase returns day book:

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Purchase returns Sales tax Total

$15,260 $3,052 $18,312
How should this be recorded in Gordon’s ledgers?
A. Dr Purchase returns $18,312 Cr Sales tax $3,052 Cr Payables $15,260
B. Dr Payables $18,312 Cr Purchase returns $18,312
C. Dr Purchase returns $15,260 Dr Sales tax $3,052 Cr Payables $18,312
D. Dr Payables $18,312 Cr Sales tax $3,052 Cr Purchase returns $15,260

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