Mirchawala’s Hub Of Accountancy:
FA1:Recording Financial Transactions:
Question#1:
Brian issues a document to a customer indicating that the amount owed is being reduced to reflect sales
return.
What is the document?
A. Advice note
B. Credit note
C. Delivery note
D. Debit note
Question#2:
Which of the following accounts would show a credit balance?
Account 1: Total Dr $400 Total Cr $200
Account 2: Total Dr $200 Total Cr $100
Account 3 Total Dr $300 Total Cr $300
Account 4: Total Dr $200 Total Cr $300
A. Account 4 only
B. Accounts 3 and 4
C. Accounts 2 and 3
D. Accounts 1 and 2
Question#3:
Dorien take a house on rent.
What is the correct double entry to account for the rent she pays?
A. Dr Rental expense Cr Cash
B. Dr Cash Cr Rent Expense
C. Dr Purchases Cr Cash
D. Dr Cash Cr Sales
Question#4:
At the start of the year Bharvinder had a loan of $40,000.During the year he repaid $20,000
Which part of the accounting equation will change as a result of the loan repayment?
A. Liabilities and profit
B. Capital and liabilities
C. Assets and liabilities
D. Capital and assets
Question#5:
The following is extracted from the trial balance at the year-end:
$
Capital 9,000
Sales 32,000
Purchases 26,000
Trade receivables 23,000
Inventory 14,000
Trade payables ?
From The Desk Of Sir Mustafa Ahmed Mirchawala: Page 1
Mirchawala’s Hub Of Accountancy:
What is the figure for the Trade payables?
A. $28,000
B. $10,000
C. $22,000
D. $12,000
Question#6:
Bob bought $2,000 of goods from Harvey on 1 November 20X7. He agreed to pay Harvey on 31 January
20X8
What kind of transaction is this from Harvey’s point of view?
A. Credit sales
B. Credit purchases
C. Cash sales
D. Cash purchases
Question#7:
Which of the following items would appear on opposite sides of the trial balance?
A. Sales and capital
B. Trade receivables and purchases
C. Motor vehicles and inventory
D. Trade payables and expenses
Question#8:
The following are extracted from Pierre’s trial balance:
$
Capital 30,000
Sales ?
Purchases 34,000
Inventory 20,000
Receivables 28,000
Payables 19,000
Cash 11,000
What is the figure for sales?
A. $44,000
B. $11,000
C. $26,000
D. $22,000
Question#9:
A credit in the ledger account can represent which of the following?
(1) Decrease in an asset
(2) Increase in a liability
(3) Increase in an expense
(4) Decrease in income
A. 1 and 2 only
B. 3 and 4 only
C. 2 and 3 only
D. 1,2,3 and 4
From The Desk Of Sir Mustafa Ahmed Mirchawala: Page 2
Mirchawala’s Hub Of Accountancy:
Question#10:
Which of the following should be classified as liabilities?
(1) Trade receivables
(2) Bank Overdraft
(3) Trade payables
(4) Drawings
A. 2 and 4
B. 3 and 4
C. 2 and 3
D. 1 and 2
Question#11:
The following are extracted from Boris’ trial balance:
$
Sales 67,000
Purchases ?
Capital 80,000
Trade payables 21,000
Trade receivables 35,000
Inventory 19,000
Cash 14,000
What is the figure for purchases?
A. $34,000
B. $128,000
C. $100,000
D. $5,000
Question#12:
Pervez has $2000 in his business bank account. He withdraws $750 from this account for personal use.
Which part of the accounting equation will change as a result?
A. Assets and Capital
B. Assets and Liabilities
C. Liabilities and Capital
D. Capital and Profit
Question#13:
Maria bought goods from Ali on credit, later she returned half of the goods.
What entry will be shown in the books of Ali to record the return of goods by Maria?
A. Sales Return DR Receivables CR
B. Receivables DR Sales Return CR
C. Receivables DR Sales CR
D. Payable DR Purchase Return CR
Question#14:
Which one of the following is the correct posting for cash purchases?
A. Dr Payables Cr Purchases
B. Dr Purchases Cr Cash
C. Dr Purchases Cr Payables
D. Dr Bank Cr Purchases
From The Desk Of Sir Mustafa Ahmed Mirchawala: Page 3
Mirchawala’s Hub Of Accountancy:
Question#15:
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#16:
Which of the following is the correct entry to record sale of goods on credit to customer?
A. Dr Payables Cr Purchases
B. Dr Receivables Cr Sales
C. Dr Purchases Cr Payables
D. Dr Sales Cr Receivables
Question#17:
Which of the following is correct?
A. Assets-Capital=Liabilities
B. Liabilities -Capital=Assets
C. Capital-Liabilities=Assets
D. Assets + Liabilities=Capital
Question#18:
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#19:
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#20:
Malcolm purchased goods from Wendy with a value of $4,000. He paid cash of $2,500 immediately and
agreed to pay the rest in 30 days.
What is the correct double entry to record this transaction in Wendy’s accounts?
A. Sales Cr $2,500 Cash Cr $1,500 Receivables Dr $4,000
B. Sales Dr $2,500 Cash Dr $1,500 Receivables Cr $4,900
C. Sales Dr $4,000 Cash Cr $2,500 Receivables Cr $1,500
D. Sales Cr $4,000 Cash Dr $2,500 Receivables Dr $1,500
Question#21:
Which of the following entries correctly records a purchase of goods on credit?
A. Dr Materials Cr Cash
B. Dr Purchase Cr Payable
C. Dr Cash book payment Cr Materials
From The Desk Of Sir Mustafa Ahmed Mirchawala: Page 4
Mirchawala’s Hub Of Accountancy:
D. Dr Purchase Cr Materials
Question#22:
Amir bought goods from Ali on credit, later he returned half of the goods.
What entry will be shown in the books of Amir to record the return of goods?
A. Sales Return DR Receivables CR
B. Receivables DR Sales Return CR
C. Purchase Return DR Payable CR
D. Payable DR Purchase Return CR
Question#23:
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
Question#24:
Which of the following item is a non current asset?
A. Cash
B. Car
C. Inventory
D. Receivables
Question#25:
Fatima paid $5,000 after deducting cash discount of 10%.
What was the original payable amount?
A. $5,555
B. $4,500
C. $5,500
D. $4,900
From The Desk Of Sir Mustafa Ahmed Mirchawala: Page 5
