1 Sami returns goods bought on credit from Javed.

How is this recorded in Javed’s books?

Account to be debited Account to be credited
A purchases returns Sami
B sales returns Sami
C Sami purchases returns
D Sami sales returns
2 Which entry records a cheque paid to a supplier for goods bought on credit?
Account to be debited Account to be credited
A bank Trade Payables
B bank purchases
C Trade Payables bank
D purchases bank
3 Goods for re-sale are bought for cash.
What are the entries in the books of the purchaser?
account to be debited account to be credited
A Cash purchases
B Cash supplier
C purchases Cash
D supplier cash
4 X owns a shop. He took inventory for his own use costing $100 but did not pay for it.
The sales price of this inventory was $150.
How should this be entered in the accounts?
Dedit Credit
A Trade Receivables $100 sales $100
B Trade Receivables $150 sales $150
C drawings $100 purchases $100
D drawings $150 purchases $150
5 There is a debit balance of $100 on Yasmin’s account in Shula’s sales ledger.
What does this mean?
A Yasmin has paid $100 to Shula
B Yasmin has returned goods, $100 to Shula
C Yasmin owes $100 to Shula.
D Shula owes $100 to Yasmin
6 A company buys a machine for $10 000. This amount is debited to the Machinery
account and credited to the Bank account.
Which accounting principle has been applied?
A dual aspect
B going concern
C matching
D money measurement
7 What is the purpose of double entry bookkeeping?
A to apply the dual aspect concept
B to avoid errors
C to prepare books of prime entry accurately
D to record revenue and capital transactions correctly.
8 Brown charged Jones for carriage on goods delivered to Jones’ premises.
What entries will Brown make in his ledger?
Dedit Credit
A carriage inwards Jones
B carriage outwards Jones
C Jones carriage inwards
D Jones carriage outwards

9 What is the purpose of a trial balance?

A to calculate a provisional net profit for a financial year
B to confirm that the total of debit balances in the ledger agree with the total
credit balances
C to confirm the cash book balance agrees with the bank statement balance
D to show the assets and liabilities of a business at a certain date.
10 Which entry records a cheque paid to a supplier for goods bought on credit?

account to be debited account to be credited

A bank creditor
B bank purchases
C creditor bank
D purchases bank
 11 Which group only contains fixed assets?
A land, machinery, premises and Trade Receivables
B land, machinery, premises and vehicles
C land, premises, loans and Trade Receivables
D inventory, land, machinery and Trade Receivables
12 Which is a liability of a business?
A amount owing by credit customers
B amount owing to credit suppliers
C loan to employee
D fixtures and fittings bought

13 Which best describes the assets of a business?

A cash and items that should turn into cash in the near future
B cash invested by the owner of the business
C items bought for long term use by the business
D items owing to or owned by the business

14 Which statements about book-keeping and accounting are correct?

1 Accounting is performed periodically rather than daily.
2 Accounting relies on having accurate book-keeping records.
3 Book-keeping involves the preparation of financial statements.
4 Book-keeping is based on the double entry system of recording.
A 1, 2 and 4 B 1 and 3 C 2, 3 and 4 D 2 and 4
15 Which account will have a credit balance?
A Bank Account
B Cash Account
C Vehicle Account
D Trade Receivables Account
16 Jane made a payment to a supplier for goods bought on credit. Jane does not have
a bank overdraft.
 What is the effect on the accounting equation?
A) decrease capital and decrease assets
B) decrease liabilities and decrease assets
C) increase assets and decrease liabilities
D) increase liabilities and decrease capital
17 Which task would not be carried out by an accountant?
A) comparing one year’s results with those of previous years
B) interpreting the accounting records
C) preparing financial statements
D) recording the financial transactions
18 On 1 April the bank column in Miriam’s cash book showed a debit balance of $150.
During April the following transactions took place.
$
receipts from sales 4210
banked 180
dividends banked 3270
cheques paid to
suppliers

What was the bank balance on 1 May?

A) $790 credit B) $910 credit C) $970 debit D) $1270 debit
19 Melanie provided the following information at the end of her financial year.
$
non-current assets at cost 14 000
amount owing by customers 1 250
amount owing to suppliers 850
inventory 1 875
bank overdraft 365
What was Melanie’s capital?
A) $12 160 B) $15 110 C) $15 910 D) $16 640
20Tony owns a bookshop. He sells a book to Susie who pays cash.
How will Tony record this transaction?
account to be debited account to be credited
A) cash sales
B) cash Susie
C) sales cash
D) Susie sales

21 Which is a current liability for a business?

A) Account payables
B) Fixtures and fittings
C) Five-year loan from bank
D) Account receivables
22 Businesses make use of both book-keeping and accounting procedures.
What is the purpose of book-keeping?
A) To interpret the double entry records
B) To prepare financial statements at regular intervals
C) To record all the financial transactions of the business
D) To summarize the financial position of the business
23 What is a trial balance?
A) a list of balances on a business’s books on a certain date
B) a list of the assets, liabilities and capital of a business on a certain date
C) a summary of all a business’s transactions for the year
D) a summary of the financial position of a business at the year-end
24 Which of the following statement is correct?
Assets Liabilities
A) We paid a creditor by cheque -Bank -Payables
B) A debtor paid us $90 by cheque +Cash +Receivables
C) Fajar lends us $500 by cheque +Bank -Loan from fajar
D) Bought goods on credit +inventory +capital
25 Which of the following are correct
A/c to be debited A/c to be credited
i. Bought office furniture for cash Office furniture Cash
 ii. A debtor, P Sangster, Pays us by cheque Bank P Sangster
iii. Introduced capital by cheque Capital Bank
iv. Paid a creditor, B lee, by cash B lee Cash

A) (i),(ii) and (iii) only

B) (ii),(iii) and (iv) only
C) (i),(ii) and (iv) only
D) (i) and (iv) only
26 A trader took goods costing $100 for his own use.
How is this recorded in the ledger?
A) Debit drawings, credit inventory
B) Debit drawings, credit purchases
C) Debit inventory, credit drawings
D) Debit purchases, credit drawings

27 Which account could appear in either the debit column or the credit column of a trial
balance?
A) Wages paid
B) Bank
C) Drawings
D) Sales

28 Which entries are made in Xanthe’s ledger to record the payment by a customer of
money owing to Xanthe?

account to be debited account to be credited

A Cash creditor
B Cash debtor
C creditor cash
D debtor cash

29 Which is not a current asset?

 A) Cash in hand
B) Money owed by a customer
C) Inventory at the end of the year
D) Unpaid invoice from a supplier

30 Which of the following statements is incorrect?

A) Assets – Capital = Liabilities
B) Liabilities + Capital = Assets
C) Liabilities + Assets = Capital
D) assets – Liabilities = Capital
31 Roger Started business at 1st January 2012. Following transaction take place during the
1st month of trading.

January
1 Roger invested $400 000 cash and a building worth $600 000 as capital.
3 Purchased inventory for resale from A.G traders costing $ 50 000 paying
$10 000 by cash and remaining to be pain after two months
5 Opened a business bank account by depositing $200 000 from cash to
bank
8 Purchased a delivery van for $ 15 000 paying by cheque
13 Purchases from A Tog costing $30 000, B.Shawls costing $22 000 on
credit
15 Returned goods unsuitable for use to A Tog costing $800,and to A.G
traders amounting $1 500
23 Goods sold to Mr Kamal amounting $25 000 on credit
25 Roger paid some personal expenses out of cash amounting to $2 000
[Total 20]
Journal
Debit Credit
Date Detail
$ $
32 Shah Bano is a trader who maintains a full set of accounting records.
On 1 April 2013 Shah Bano’s trade debtors included Zara, who owed $240 and her
trade creditors include Ayesha who is owed by $110.
Her bank balance at that date was $4 450
.
Shah Bano’s transactions for April 2013 included the following:

April 2 Received a cheque from Zara in settlement of his total debt.

7 Purchased goods from Ayesha for $345 on credit
11 Sold goods on credit to Zara, list price $460
Zara returned goods. These were purchased on 11 April, list price $70
14 Paid wages to workers $1 200 by cheque.
20 Paid Ayesha half of the amount due to her.
28 Withdrew cash $420 for office use
30

REQUIRED:

a) Write up the accounts of Zara, Ayesha and Bank as they should appear in Shah
Bano’s ledger for the month of April 2013.
Shah Bano’s Books
 Zara’s Account
Date Detail $ Date Detail $

[6]

Ayesha’s Account
Date Detail $ Date Detail $

[6]
Bank Account
Date Detail $ Date Detail $

[6]
33 Tahir Shah commenced a business- Eye 2 Eye Entertainment Company. Following
are the transactions for his first month of operations.

2012
June 1 Started business with $12,000 in cash.
2 Paid $11,700 of the opening cash into a bank account for the business.
5 Bought office furniture on credit from Zara Khan for $1,900.
8 Bought a van paying by cheque $5,250.
12 Bought equipment from Noor khurram on credit $2,300.
 18 Returned faulty office furniture costing $120 to Zara Khan.
25 Sold some of the equipment for $200 cash.
26 Paid amount owing to Zara Khan$1,780 by cheque.
28 Took $130 out of the bank and added to cash.
30 Nida Qaiser lent us $4,000 – giving us the money by cheque.

REQUIRED

Pass journal entries for Eye 2 Eye Entertainment Company for the month of June.
Journal
Debit Credit
Date Detail
$ $

[20]

a) From the following information, write up the account of Mim Chul in the books of
Juicy Jones for the month of May 2012. Prepare the account in three column running
balance format.

May 1 Mim Chul owes Juicy Jones $920

14 Juicy Jones sold goods , $440, on credit to Mim Chul
16 Mim Chul returned goods, $175, to Juicy Jones
 19 Mim Chul paid Juicy Jones $100 in Cash
21 Juicy Jones sold goods on credit to Mim Chul $ 93
26 Mim Chul paid Juicy Jones, $900, by cheque

Books of Juicy Jones

Mim Chul Account

Date Detail $ Date Detail $

[7]

b) The following trial balance was extracted from the books of Sabena Khan at 31 January
2011by an inexperienced accountant.
Debit Credit
$ $
Drawings 4 800
Premises at cost 30 000
Equipment at Cost 4 500
Fixtures and fittings at cost 5 400
Inventory 1 February 2010 7 500
Miscellaneous expense 1 080
Trade receivables 4 900
Revenue 58 200
Purchases 51 400
Purchases returns 2 300
Trade payables 5 100
Bank overdraft 5 240
Administration expenses 7 960
 Capital 1 February 2010 ?

REQUIRED
a) Prepared the corrected Trial Balance for Sabena Khan as at 31 January 2011. Clearly
State the capital of the business at 1 February 2010.