Multiple Choice Questions

sales 900
Opening inventory 200
+Purchases 500
------
=avalialble 700
-Closing stock (300)
-------
=Cost of goods sold 400
or cost of
Gross profit: 900 -400=$500

Beginning capital $28,000

+Net profit ?
-Drawings (2,000)
----------
=Ending capital $33,000
 CA - CL
(13,000+2,000+100) - (6,300 + 8,000)
Purchases $3,000
-Trade discount (30%) (900)
---------
=Purchase price 2,100
-Cash discount (5%) (105)
----------
=Amount paid 1,995
Beginning capital $30, 000
+Net profit ?
+Additional capital 3,000
-Drawings (4,000)
---------
=Ending capital 40,000
sales 11,000
Opening inventory 900
+Net purchases 0
+Cost of goods produced 6,100
----------
=Goods available 7,000
-Closing inventory (1,000)
----------
= Cost of goods sold 6,000
or cost of sales

Gross profit $11,000-6,000=$5,000

Sales understated means

sales was credited for $30
less
than it actually was to have.
Therefore, $30 is missing from sales
and we need to add $30 to sales.

Since "Sales is normally on

the credit side, then it increases
on the credit side. Since the other account
involved in that transaction had no
errors, that side of the journal entry
will be suspended.
 "Accumulated fund" is another
term used for "capital" or
"Equity" in a nonprofit business

Discount always follows cash. It's always on

the same side as "Cash" or "Bank"
sales 83,868
-Sales return (1,570) CA - inventory= $6,000 - i = 5
---------- ----------------- ----------
=Net sales 82,298 CL 1, 100
Opening inventory 9,850 =5,500 = $6,000 - i
+Purchases 52,640
-Return out (762) i = 500
-Closing inventory (11,075)
-----------
=Cost of oods sold 50,653

26) CA - CL = WC
25,000 - 5,000 20,000

if:
-2000 stock
+2,000 debtors

CA remains the same, therefore

WC remains the same
 Rent expense
---------------------
bal b/d 2,000
Cash 6,000 P & L 6.500
bal c/d 1,500
(Dr.. balance)
-------- ---------
8,000 8,000

Provision for Doubtful Debt a/c

-----------------------------------------
Bal b/d 800

Bal c/d 1,000 P & L 200

Therefore, adjustment for the year

P & L 200
Prov. For doubtful 200

-300 + 3000= 2700 paid

$2700 for 3 months is $900 per month

 Other Questions

38. What is a sales budget?

a.) A plan for what type of items you want to be sold

b.) A plan for how much the items will cost in stores
c.) A plan for tracking particular inventory and how much they sell
d.)A plan for how much sales revenue should be generated in a given period.

39. If your sales budget shows that you sold 10,000 units of Christmas lights last November and
you ran out at your warehouse, what does that tell you about customer expectations?

a.) You should repackage the Christmas lights as 'Winter Wonderland' lights in January so more
people will buy them then.
b.) You need to make more Christmas lights for this year, because your customers bought them
all.
c.) No one likes your Christmas lights.
d.) You should diversify into lawn ornaments.

40. Which is the mostly likely purpose of budgeting?

a.) Planning and control of an organization' s income and expenditure

b.) Preparation of a five-year business plan
c.) Determining the company’s valuation (value)
d.) Assess the non-financial performance of an organization

41. Which is the mostly likely purpose of budgeting?

a.) Planning and control of an organization' s income and expenditure

b.) Preparation of a five-year business plan
c.) Determining the company’s valuation (value)
d.) Assess the non-financial performance of an organization

42. Which of the following budgets would not form part of the master budget?

a.) Statement of cash projection

b.) Trading Profit and Loss
c.) Sales budget
d.) Production budget
43. A crockery company makes china cups and saucers. How much clay would they need to buy
if:
- a cup uses 100g of clay
- a saucer uses 150g of clay Production Budget
- it plans to make 450,000 cups and 280,000 saucers Beginning inventory (units) 0g
+ Production needed 87,000,000 g
- there is no opening inventory ----------------
- it would like to have closing inventories of 4,000kg of clay? Total inventory needed 87,000,000 g or 87,000 kg
-Sales of inventory 83,000,000 kg
--------------------
= Ending inventory (units) 4,000 kg
a.) 83,000kg
b.) 99,500kg
c.) 87,000kg
d.) 91,000kg

44. Calculate the production budget from the following data: sales 89,350 units; opening
inventory 23,864 units; closing inventory 33,156 units.

a.) 80,058 units Beginning inventory (units) 23, 864

+ Production needed 98, 642
b.) 146,370 units ------------
=Total inventory 122,506
c.) 32,330 units -Sales of inventory (units) 89,350
d.) 98,642 units ----------
=Ending inventory (units) 33,156

45. Define morality

a.) What is considered as correct within a society?

b.) Making the right decisions when there is a chance to do wrong
c.) Defining what is right and wrong for an individual or a community
d.) Where individuals have a conscious choice to make a right and ethical decision

46. It is the responsibility of every associate to:

a.) Make sure you have all the facts
b.) Ask themselves if what they are being asked to do is unethical or improper
c.) Discuss the problem with their supervisor
d.) Discuss the problem with other employees.

47. Accounting Information System (AIS) are interrelated components which acts together to
achieve a common goal. These components are used to achieve each of the following goals
EXCEPT
a. Collect financial data
b. Process financial data
c. Delete online financial data
d. Store financial data
48. Which of the following users rely on adequate collection and storage of data of the
company’s accounting information system for decision making purposes for the company?
a.) Investors
b.) Government
c.) Competitors
d.) Management

49. Which of the following is not a function of a company’s accounting software?

a.) Track creditors and debtors payment history
b.) Payroll calculations
c.) Maintains revenue and expenditures
d.) Prepare bank statement at the end of the month