Accounting and Finance
Which error will not affect the balancing of the Trial Balance?
An electricity payment of $420 was entered correctly in the Bank account but debited as $240 in the Electricity account
A purchase invoice of $200 had not been entered in the Purchases Journal
A rent payment of $600 had been entered correctly in the Bank account but omitted from the Rent account
The Sales account was overcast by $90
A purchase invoice of $200 had not been entered in the Purchases Journal
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An electricity accrual of $450 is treated as a prepayment when preparing a trader’s Profit and Loss account. What effect does this have on the trade/’s net profit?A. It is overstated by $450
B. It is understated by $450
C. It is overstated by $900
D. It is understated by $900
How is the factory cost of production calculated?
A. direct labour + direct material
B. direct labour + factory overheads
C. direct material + direct labour + factory overheads
D. direct material + direct labour + total overheads
In a trading section of income statement, closing inventory of $4 000 has been added to opening inventory and purchases. What is the effect of this on gross profit?
A. It is overstated by $4 000
B. It is understated by $4 000
C. It is overstated by $8 000
D. It is understated by $8 000
Which transaction is entered in the general journal?
A. credit sale of goods
B. goods returned to supplier
C. purchase of a non-current asset on credit
D. purchase of inventory for cash
A company makes furniture What will be treated as a direct cost in the company’s manufacturing account?
A. depreciation of vehicles that deliver the furniture
B. insurance of the machinery used to make the furniture
C. transport costs of bringing in the raw materials to make the furniture
D. wages of workers maintaining the factory machinery
Which of the following is an expense account?
A. Sales
B. Cash
C. Janitorial receivable
D. Accounts payable
A social club’s records for a year show: What is the total net income for the year?
A. $8 000
B. $9 800
C. $10 000
D. $12 000
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