29 Alison has pregared the following reconciliation of the balance on the receivables ledger control account in her general ledger to the total of the list of balances on customers! personal accounts: $s Balance on receivables contral account 75,356 Balance omitted from list of balances (3a' 74.507 Sales day book undercast 400 Total of Ist of balances 74307 What is the correct balance of receivables to be reported on the statenent of financial position? A $75,756 B $75,356 © $74,907 D $74,507 30 A suspense account was opened when a tral balance fallec to balance. Wren the folowing errors ‘were corrected, the suspense account was cleared: = Agas bill for $420 was entered on the correct side of the gas account 2s $240 + Adiscount of $50 givon to a customer had beon credited to the discounts received account. The other entry had been made correctly ‘© Interest received of $70 was entered correctly in the bank account, but no other entry was made. \Whet was the balance on the suspense account when it was created? A pepir $210 B CREDIT $210 © DEBIT $100 D CREDIT $160 38 At 1 Jenuary 20X1 there was an allowence for receivables of $2,000. During the year $1,000 of obt was writton off and $800 of irrecoverable debt was recoverod. At 31 December 20Xi, it was decided to adjust the receivables allowance to 10% of receivables, which were $20,000. What was the total receivables expense in the statement of profit or loss for the year? A $200 B $1,200 c $1,800 D $2,800 39° Graham prepared hiis draft end of year accounts, however he has now realised that he did not adjust these for a prepayment of $2,100 and an accrual of $800. How will Graham's profit and net assets be affected by including the prepayment and accrual? Net Profit wil Net assets will A increase by $2,900 Reduce by $2,900 B Increase by $1,300 Increase by $1,300 Reduce by $1,300 Increase by $1,300 D Reduce by $2,900 Reduce by $2,90040 42 4a a4 (On 3 July 20X0 Alex paid rent of $18,000 for the period 1 July 20X0 to 30 June 20X1. He is drawing up accounts for the year to 31 January 20K1. In respect of the rent, his accounts should incluce: A A prepayment of $7,500 B Anacerual for $7,500 CA prepayment of $10,500 D — Anacerual for $10,500 Serah made a mistake when she calculated the value of her clesing inventory. AS a result the Inventory is undervalued, How are her net profits for the year and net assets at the end of the year affected by this error? et prorit Net assets A Overstated Unoerstated B Overstated Overstated C Understates Understated D —_Understatec Overstated Femando runs clothes shop selling replica foctball kits and valued all his inventory at 31 March 20X8 at its cost of $15,560. Inventory includes 50 of ast season's tootball Kits which orginally cost $30 and were on sale uring the year for $50 each. However, now that new kits are out for the coming season, Fermando Knovrs he will have to reduce the old kits to halt price in order to sell tiem. The correct value for inventory at 31 March 20X8 is; A $14,050 B $15,300 c $15,560 D $16,560 ‘The following records were kept tor an inventory item in June. June 1 100 units in inventory at $10 each 5 50unts bought at $10 each 12. 60units sold 20 20 units bought at $8 each 29° 80 units sold ‘The value of inventory at June 30" using FIFO Is: A $300 B $260 c $340 D $22045 a7 a8 49 50 ‘Adam uses the continuous weighted average cost method of valuing inventories. During May 20X1., he recorced the following inventory details: ‘Opening balance 50 units valued at $4 each 4 May purchase of 50 units at $4.40 each 11 May issue of 80 units 19 May purchase of 60 units at $4.60 each 24 May issue of 50 units ‘The value of the inventory held at 31 May 20X1 was. A $120.00 B $126.00 c $132.00 D $135.00 The purpose of charging depreciation on non-current assets is to Put money aside to replace the assets when required Show the assets at their current market value Ensure thet the prof is not understated Spread the cost of the assets over their estimated useful life vow» Brook sold a delivery van which criginally cost $24,500. The accumulated depreciation on the van was $13,650 at the date it was sold. Sale proceeds of $7,500 were received ‘What Is the profit or lass on the disposal of the van? A Alloss of $3,350 B Alloss of $6,150 © Alloss of $17,000 B A prott of $3,350 The following information relates to questions 49 and 50 Holly bought some equipment for use in her business on 1 May 20X8. In order to purchase the asset she transferred $15,000 from her bank account to the supplier's bank account and traded in some old equipment which was assigned a part exchange value of ‘$4,450 by the supplier. Holly depreciates equipment on the reducing balance basis at a rate of 20% per annum. The old equipment had cost $15,000 and had been depreciated by $9,855, What is the depreciation charge on the new equipment for the year to 30 Aoril 20x9? A $1,336 B $4,500 Cc $5,835 D $6,044 What is the profit or oss on disposal arising on the old equipment that was traded in? $10,550 profit $10,550 loss $695 profit $3695 oss com>51 {An organisation's asset register shows a net book value of $145,600. The non current asset account in tne general ledger snows a net Dook value of $135,600. The difference could be due toa disposed asset nt having been deducted from the asset register: A With cisposal proceeds of $15,000 and a profit on disposal of $5,000 B With cisposal proceeds of $15,000 and a net book value of $5,000 With aisposal proceeds of $15,000 and a loss on disposal of $5,000 Wit aisposal proceeds of $5,000 anc a net Deok value of $5,000, 52 52 61 A sole tradar is balancing and ruling off a ledger account at the end of the year. The ledger account shows an overall credit balance. Which of the folowing could it represent? (2) Aliability that should be carried forward to the next year (2) An ascot that should be carried forward to the naxt year (3) An expense to be transferred to the statement of profit or loss (4) Income to be transterted to the statement of profit or loss A Land2 B Sanda © 2ana3 D Landa Which one of the following would be included amongst current liebilities in the accounts of a business? (2) Anallowanee tor receivables (2) Accrual tor rent 3) Bank overdraft (@) Anew bank loan due for repayment in 2 years time A Lend2 B 2end3 © Lends DD 2eng4 Alfred does not keep full accounting records. He has calculated that his assets and liatilities at 30 June 20X1 were. $ Non-current assets 51,200 Inventory 7,770 Receivables 5,585 Payables 3,994 Bank overdraft 3.537 (On reviewing his calculations, you ncte that there were no entries made in relation to rent for the month of June 20X1 because rent is paid in arrears, with the payment for June having been made on 1 July 20X1. Rent is $500 per month. What Is the value of Alfred's closing capital at 30 June 20x17 $64,678 $56,604 $57,604 $63,678 vom>