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1. q-image

What is the amount of capital employed?

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A.

?7000

B.

?10000

C.

?22000

D.

?15000

Explanation. Give a better Explanation

Capital Employed is the difference between the total assets and current liabilities of the company



2.

Advertising expenses incurred on a product in a business organization should be charged to

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A.
Sales department
B.
Production department
C.
Purchase department
D.
Administration department
Explanation. Give a better Explanation

Advertising expenses are expenses incurred in order to enhance the sales of the company’s product/services



3.
                                      N                              N
Capital                                         39,000  Land  20,000
Long Term Loan      15, 000                    Building 30,000
Creditors                                       9,000 Stock  40,000
  Debtors  6,000
Accrued wages                             5,000 Cash  8, 000
                       68,000    68,000

 

 

 

Use the information above to answer the question

 : The acid test ratio in the company is___________

 

 

 

 

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A.
1:1
B.
2:3
C.
1:2
D.
3:2
Explanation. Give a better Explanation

Acid test ratio measures the liquidity position of a company after deduction stock (inventory) from current assets

  Formula: current assets less inventory/current liabilities

  18000 - 4000/14000 = 1 : 1



4.

When goods are sent to branch at cost plus mark up, it means that the branch should sell at_____________

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A.
Price above or below the stipulated price
B.
Any price but not below the transfer price
C.
Cost price
D.
A price that is equal to the mark up
Explanation. Give a better Explanation

Cost plus mark up is a pricing strategy in which the selling price is determined by adding a specific amount mark up to a product unit cost



5.

The office responsible for ascertaining whether all public expenditures and appropriations are in line with approved guidelines is the________

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A.
Accountant general
B.
Finance minister
C.
Auditor general
D.
Permanent secretory.
Explanation. Give a better Explanation

Appropriation is the amount that government reserves for a particular purpose. Public expenditure is the spending made by government of a country on collective needs



6.

Use the information below to answer question

 
Trading account for the year ended 31st December 2009

 

? ?
Opening Stock                                               32,000 Sales                48,000     
Purchases                           40,000 Less Return       2,000
Carriage inwards                   1,000  
                                            41,000  
Less Return                          2,000                 39,000  
   
Cost of goods available                                     ??  
Less closing stock                                            9,000  
Cost of goods sold                                            ??  

 

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A.
#20,500
B.
#23,000
C.
#28,000
D.
#27,000
Explanation. Give a better Explanation

Average stock is the calculating the addition of stock at the beginning and at the end of the financial period and dividing the value by two.

  It is the average value of products kept for sale during an accounting period.

  Therefore:

  Average stock = opening stock + closing stock/2

  = 32000 + 9000/2

  = 41000/2

  =? 20500



7.

Use the information below to answer question

 
Trading account for the year ended 31st December 2009

? ?
Opening Stock                                               32,000 Sales                48,000     
Purchases                           40,000 Less Return       2,000
Carriage inwards                   1,000  
                                            41,000  
Less Return                          2,000                 39,000  
   
Cost of goods available                                     ??  
Less closing stock                                            9,000  
Cost of goods sold                                            ??  

 

Calculate the cost of goods sold

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A.
#61,000
B.
#62,000
C.
#58,000
D.
#57,000
Explanation. Give a better Explanation

Cost of goods sold is the direct costs attributable to the production of the goods sold in a company.

  Cost of goods available for sale (32000 + 39000) = 71000

  Less closing stock = 9000

  Cost of goods sold = 7100 - 9000

 = 62000



8.

The amount called in respect of a share but not paid before or on the date fixed for payment is referred to as:

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A.
Call in advance
B.
call in arrears
C.
forfeiture
D.
shares
Explanation. Give a better Explanation

is the amount called by the company which is not paid by the shareholders before the due date fixed for payment



9.

When goodwill is not retained in the business, the entries in the new partners books will be to debit______________

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A.
Goodwill account and credit partners capital account
B.
Cash account and credit goodwill account
C.
Goodwill account and credit cash account
D.
Partners capital account and credit goodwill account
Explanation. Give a better Explanation

When goodwill is raised in the books at full value, the entry is

  Dr Goodwill Account

  Cr Old partners capital account (old ratio)

  When the raised goodwill is written off, entry will be:

  Dr All partners capital account

  Cr Goodwill accounts

  Note: goodwill written off includes new partners in the new profit sharing ratio



10.

Use the information below to answer the question

 

Liabilities                     ? Assets                                   ?
Capital                        40,000          Furnishing                               10,000
  Ceiling Fan                               1,500
  Cash in Hand                         28,500
                                    40,000                                                40,000

 

If at 31/1/95 the following information was ascertained

 

  (i). rent for shop #12,000 paid for the year

  (ii). Total purchases #15,000

  (iii). Total sales #8,200

  (iv). Stock of goods left #10,000

  (v). paid sales boy #500

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A.
#40,000
B.
#41,500
C.
#41,700
D.
48,500
Explanation. Give a better Explanation

Trading, profit and loss account for the month ended 31/1/95

 

For the month ended 31/1/95

                                                                ?                             ?

Sales                                                                                      8200

Cost of sales:

Purchases                                           15000

Closing stock                                      (10000)                (5000)  

Gross profit                                                                        8200

Gross profit b/d                                                                8200

Sales commission                             500

Rent                                                    1000                     (1500)

Net profit                                                                            1700

WORKINGS:

Rent paid for 12 months                                                   12000

Rent paid for one month

12000 x 1/12                                                                      (1000)

Prepaid rent                                                                       11000

Balance sheet as at 31/1/95                                                                                                                                                                                                                                                       

Noncurrent asset:                                                           

Furnishing                                           10000

Ceiling fan                                           1500                      11500

Current asset:

Cash (see cash account)                     9200

Inventory                                             10000 

Prepaid rent (see above)                    11000                          30200   

                                                                                               41700

Capital                                                                                    40000

Net profit (see p&l)                                                                  1,700                                    

                                                                                                41700



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