BUSINESS STUDIES / ACCOUNTING
Question 1
Which of the following business organisations has an advantage of raising more capital?
A Partnership
B Private limited company
C Public limited company
D Sole proprietor
Question 2
Which of the following is an advantage of using manual method of processing data?
A Cheap to use
B Faster to process data
C Minimises errors
D Stores more information
Question 3
A trader bought goods on credit.
Which source document was used?
A Cheque
B Purchases invoice
C Receipt
D Sales invoice
Question 4
What is the source document for the sales returns journal?
A Credit note
B Debit note
C Invoice
D Receipt
Question 5
Office equipment sold on credit is recorded in the
A cash book.
B general journal.
C sales journal.
D purchases journal.
Question 6
Which of the following accounts is found in the private ledger?
A Bank account
B Capital account
C Trade receivables account
D Wages and salaries account
Question 7
Goods bought by cheque were recorded in the purchases account and omitted in the bank account.
To correct the error
| | **debit** | **credit** | | :--- | :--- | :--- | | A | bank account | suspense account. | | B | purchases account | suspense account. | | C | suspense account | bank account. | | D | suspense account | purchases account. |
Question 8
A trader decides to create a provision for bad debts.
This is in accordance to the
A consistency concept.
B double entry concept.
C matching concept.
D prudence concept.
Question 9
In a statement of financial position of a sole trader, what makes up owner's equity?
A Opening capital - net loss - drawings
B Opening capital + net loss + drawings
C Opening capital - net profit - drawings
D Opening capital + net profit + drawings
Question 10
In the preparation of statement of financial position which items are classified as current liabilities?
A Income owing and inventory of stationery
B Income owing and rates accrued
C Income prepaid and inventory of stationery
D Income prepaid and rates accrued
Question 11
The following transactions appeared in the books of a trader.
(i) Bought a delivery van
(ii) Paid for rent and rates
(iii) Paid for carriage on purchases
(iv) Paid for carriage on delivery van
Which transactions fall under capital expenditure?
A (i) and (ii)
B (i) and (iv)
C (ii) and (iii)
D (iii) and (iv)
Question 12
Items entered on the debit side of a trade payables control account include
A credit purchases and discount received.
B returns outwards and credit purchases.
C returns outwards and discount received.
D set off and cash refund.
Question 13
Information entered in control accounts is extracted from the
A ledger accounts.
B source documents.
C subsidiary books.
D trial balance.
Question 14
Which of the following is used on the preparation of a bank reconciliation statement?
A Bank charges
B Cash book error
C Credit transfer
D Unpresented cheques
Question 15
Which of the following items are used to update the cash book?
A Bank charges and standing order
B Deposits not yet credited and standing order
C Unpresented cheques and bank charges
D Unpresented cheques and standing order
Question 16
Margin is
A gross profit expressed as a percentage of cost of sales.
B gross profit expressed as a percentage of turnover.
C net profit expressed as a percentage of cost of sales.
D net profit expressed as a percentage of turnover.
Question 17
Which of the following can be used to calculate purchases?
A Cost of sales - opening inventory - closing inventory
B Cost of sales - opening inventory + closing inventory
C Cost of sales + opening inventory - closing inventory
D Cost of sales + opening inventory + closing inventory
Question 18
Which of the following items is shown in the receipts and payments account?
A Cash at end of period
B Inventory of stationery
C Subscriptions owing at end of period
D Surplus at end of period
Question 19
Which of the following items is credited in an income and expenditure account?
A Depreciation of office furniture
B Motor vehicles repairs
C Stationery
D Subscriptions
Question 20
Which of the following inventories is part of total cost of production?
A Closing inventory for raw materials
B Closing inventory for work in progress
C Opening inventory for finished goods
D Opening inventory for work in progress
Question 21
Which of the following is part of prime cost for a furniture manufacturing company?
A Carriage on furniture
B Carriage on timber
C Wages of factory supervisor
D Wages of office supervisor
Question 22
Cost of unfinished goods at the end of a given period is
A cost of raw materials consumed.
B inventory of raw materials.
C inventory of work in progress.
D prime cost of production.
Question 23
Which of the following items is shown on the credit side of a partnership appropriation account?
A Interest on capital
B Interest on drawings
C Salaries to partners
D Share of profits
Question 24
One of the advantages of forming partnerships is that
A business risks are shared.
B decision making takes long.
C partners have unlimited liability.
D profits are shared.
Question 25
Which of the following set of items are shown in the statement of changes in equity?
A Dividends paid and interest on debentures
B Dividends proposed and interest on debentures
C Transfer to reserves and dividends paid
D Transfer to reserves and dividends proposed
Question 26
Which business ethic will a company apply if it requires its employees to keep company information to themselves?
A Competence
B Compliance
C Confidentiality
D Objectivity
Question 27
A trader's trial balance failed to agree. It was discovered that sales returns were overcast by \(\$ 800\).
The effect of this error on the trial balance was to
A increase the credit side by \(\$ 800\).
B increase the debit side by \(\$ 800\).
C reduce the credit side by \(\$ 800\).
D reduce the debit side by \(\$ 800\).
Question 28
The following balances were extracted from the ledger of a business:
| Provision for depreciation: office equipment | \(\$\) | | :--- | ---: | | Drawings | 12500 | | Returns outwards | 7800 | | Returns inwards | 2600 | | Discount allowed | 1900 | | | 800 |
Total debit balances in the trial balance amounted to
A \(\$ 10200\).
B \(\$ 10500\).
C \(\$ 15100\).
D \(\$ 23000\).
Question 29
A trader provided the following information:
2020 January 1 Office equipment at cost \(\$ 35000\).