Principles of Accounting (2017 | Study Mode

Question 41
A
Assets + Liability = Equity
B
Assets + Equity = Liabilities
C
Liabilities + Equity = Asset
D
Liabilities + Equity = Net assets
Explanation
Liabilities + Equity = Asset is given as the fundamental equation

Question 42
A

9,000

B

2,500

C

3,000

D

1,500

Explanation

$$\begin{array}{c|c} \text{Sales} & & 9000 \\ \hline \text{Stock Jan 1} & 2000 & \\ \hline \text{Purchases} & 4000 & \\ \hline \text{Carriage inwards} & 500 & 6500 \\ \hline \text{Gross profit} & & 2500 \end{array}$$

Question 43
A
Assets = Liabilities + Equity
B
Net assets = Liabilities + Equity
C
Assets + Liabilities = Equity
D
Assets = Equity - liabilities
Explanation
The fundamental accounting equation is Asset = Capital + Liabilities
Asset = Liabilities + Equity the total assets of the company is generated through liabilities to outsiders that the company is still enjoying in addition with the equity by the owners of the business

Question 44
A
current asset
B
current liability
C
fixed asset
D
long term liability
Explanation
current assets are assets of the company that can be easily converted to cash when needed

current liability: this is the liability owned to outsiders but still enjoying its benefit within a year e.g creditors, wages in arrears

Question 45
A
All records relevant to the organisation.
B
Records of assets of the organisation
C
A collection of data items
D
All records relating to employees
Explanation
All record relevant to the organization: the records which are only relevant to the organization such as the name and address as well as summary information such as amount due and year to date sales will be in master file

Question 46
A
treasury receipt
B
receipt voucher
C
payment voucher
D
treasury card
Explanation
Receipt voucher is raised as evidence by revenue collector when government funds and property or received

Receipt voucher: these are vouchers raised as evidence for the receipt of government funds and property. The revenue collected is prepared for the government ministry as a means that revenue has been collected

Question 47
A
public issue
B
bonus
C
right issue
D
dividends
Explanation
Dividend is known as the kind of benefit enjoyed by the shareholder for investing their fund in a particular organisation

Question 48
A
The accounting entries for goods stolen in branch will be to debit
B
branch stock account and credit branch adjustment account
C
branch adjustment account and credit profit and loss account
D
branch adjustment account and credit branch stock account
Explanation
A branch account is a small part of business account operating with some degree of independence . It maintains its own personal/self accounting entries to determine the profit/loss made by a specific period of time

The accounting entries is to debit profit and loss account and credit branch stock. The profit and loss is debited because the cost of the stolen goods must be charged against the profit for the period to balance the account and the branch stock account is credited because the cost of the goods is out of the branch already.

Question 49
A

3850

B

6650

C

1550

D

6850

Explanation

Dr Total Debtors Control A/c Cr

$$\begin{array}{c|c} \text{bal b/f.....4,000} & \text{Cash received..... 8,500} \\ \hline \text{Credit sales.....6,850} & \text{Bad debt written off.....50} \\ \hline & \text{Dr. Allowed.....500} \\ \hline & \text{bal c/d.....1,500} \\ \hline 10,850 & 10,850 \\ \hline \text{bal b/d.....1,500} & \end{array}$$

D is correct 6850 as the sales for the year accordingly to the above calculations
The total debtors account is meant to control the transactions with customers whether in cash or credits and to know the remaining cash receivables from customers.

Question 50
A
bank account and credit joint venture account
B
expenses account and credit bank account
C
joint venture account and credit expenses account
D
joint venture account and credit bank account
Explanation
Joint venture account is an account that all expenditure incurred for the venture is debited and all income is credited to.
Debit joint venture and credit bank account because expenses incurred on behalf of the venture has to be debited to the joint venture account and since the money is joint out the bank must be credited to balance the account

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