Question 1

Income tax previously provided for was paid.

Accepted Answer

A)   An asset increased and another asset decreased.
B)   An asset decreased and an expense increased.
C)   An asset decreased and a liability decreased.
D)   A liability increased and an expense increased.E) B) and D)
F) All of the above

Question 2

A company's first event in the year commencing 1 July 2012 was to pay $250 cash for stationery purchased in June 2012; this was recognised as an expense in that month.Which of the following changes took place as a consequence of this event?

Accepted Answer

A)   Assets increased by $250.
B)   Liabilities decreased by $250.
C)   Expenses increased by $250.
D)   None of the above changes occurred.E) B) and D)
F) None of the above

Question 3

A $10 000 receipt was received from an accounts receivable,as a result:

Accepted Answer

A)   an asset decreased and an expense decreased
B)   an asset decreased and another asset increased
C)   an asset decreased and an expense increased
D)   a liability decreased and an expense increased.E) A) and D)
F) A) and C)

Question 4

Use the information given below to answer the following questions:
Retained profits of Livermore Pty Ltd at 1 July 2011 were $5500. The accounting records for year ended 30 June 2012 showed the following information:
 $ Revenues earned 35500 Cash collected from customers 5700 Expenses incurred 32250 Expenses paid in cash 29620 Dividends declared and paid 1500\begin{array} { l r } &\$\	ext { Revenues earned } & 35500 \	ext { Cash collected from customers } & 5700 \	ext { Expenses incurred } & 32250 \	ext { Expenses paid in cash } & 29620 \	ext { Dividends declared and paid } & 1500\end{array} Revenues earned  Cash collected from customers  Expenses incurred  Expenses paid in cash  Dividends declared and paid ​$35500570032250296201500​  
-Additional credit sales of $2m (cost price $1.5m) are made on credit.This transaction will:

Accepted Answer

A)   increase net profit,increase cash,and increase total assets
B)   increase net profit,increase total assets but not affect cash
C)   increase net profit,and not affect cash or total assets
D)   increase net profit,increase cash. E) A) and D)
F) A) and C)

Question 5

An account was paid for stationery purchased in the previous accounting period.

Accepted Answer

A)   A liability increased and another liability decreased.
B)   An asset decreased and a liability decreased.
C)   An asset increased and revenue increased.
D)   An asset decreased and an expense increased.E) None of the above
F) All of the above

Question 6

At the end of the accounting period,3 months' interest is owing to the company on a term deposit with the bank.

Accepted Answer

A)   A liability increases and another liability decreases.
B)   An asset decreases and a liability decreases.
C)   An asset increases and revenue increases.
D)   An asset increases and another asset decreases.E) None of the above
F) A) and D)

Question 7

The assets of ALS Ltd increased by $5476 during year ended 30 June 2012 and during the same period liabilities decreased by $3019.Consequently shareholders' equity must have:

Accepted Answer

A)   increased by $2457
B)   increased by $8495
C)   decreased by $2457
D)   decreased by $8495.E) C) and D)
F) B) and D)

Question 8

If at the end of the financial year,2 months' interest is owing to the company from the bank,the effect on the accounting equation is that:

Accepted Answer

A)   an asset increases and another asset decreases
B)   a liability increases and another liability decreases
C)   an asset decreases and a liability decreases
D)   an asset increases and owners' equity increasesE) A) and D)
F) None of the above

Question 9

On 10 July 2011,RST Ltd borrowed $1m from a finance company,agreeing to pay principal and interest of 9% in 2 years' time.What journal entry should be recorded on 10 July 2012?
A. DR Cash  $\quad $ CR Loan

B. DR Cash  $\quad $ CR Loan or interest payable

C. DR Cash $\quad $CR Interest expense

D. DR Loan  $\quad $ CR Cash

Accepted Answer

The answer of On 10 July 2011,RST Ltd borrowed $1m...

Question 10

Consider the following transactions: 
(i) issued share capital for cash of $200 000
(ii) received $50 000 from accounts receivable
(iii) paid $30 000 to accounts payable
(iv) purchased new equipment for $160 000 on credit
(v) increased the long service provision by $5000.
Total assets increased by:

Accepted Answer

A)   $130 000
B)   $180 000
C)   $300 000
D)   $330 000.E) B) and D)
F) A) and D)

Question 11

In which of the following transactions or events are the debit entries NOT equal to the credit entries?

Accepted Answer

A)   Wages owing are recorded as increasing an expense and decreasing an asset.
B)   Credit purchase of inventory is recorded as increasing an asset and increasing a liability.
C)   Cash sales are recorded as increasing revenue and increasing an asset.
D)   Receipt from a customer is recorded as increasing an asset and decreasing another asset.E) None of the above
F) All of the above

Question 12

Use the information given below to answer the following questions:
Retained profits of Livermore Pty Ltd at 1 July 2011 were $5500. The accounting records for year ended 30 June 2012 showed the following information:
 $ Revenues earned 35500 Cash collected from customers 5700 Expenses incurred 32250 Expenses paid in cash 29620 Dividends declared and paid 1500\begin{array} { l r } &\$\	ext { Revenues earned } & 35500 \	ext { Cash collected from customers } & 5700 \	ext { Expenses incurred } & 32250 \	ext { Expenses paid in cash } & 29620 \	ext { Dividends declared and paid } & 1500\end{array} Revenues earned  Cash collected from customers  Expenses incurred  Expenses paid in cash  Dividends declared and paid ​$35500570032250296201500​  
-A company declares and pays an interim dividend.This transaction will:

Accepted Answer

A)   decrease total assets and total shareholders' equity but have no effect on profit
B)   decrease total assets,total shareholders' equity and profit
C)   decrease total assets but have no effect on profit or shareholders' equity
D)   none of the above. E) A) and D)
F) A) and C) A

Question 13

Given only the following information,how much revenue would L Ltd recognise in May 2012?
(i) A $160 000 deposit was received from a client in May for work to be carried out in June.
(ii) Credit sales of $300 000 made in May,with only $100 000 to be collected in May.
(iii) $40 000 was collected in May from customers for April sales.
(iv) Sold goods were valued at $60 000 on last day of May.Client to be invoiced in early June.
(v) A contract was signed to deliver client goods valued at $80 000 in June.

Accepted Answer

A)   $260 000
B)   $360 000
C)   $400 000
D)   $160 000.E) A) and D)
F) A) and B)

Question 14

A customer paid his account in full.

Accepted Answer

A)   A liability increased and another liability decreased.
B)   An asset decreased and a liability decreased.
C)   An asset increased and revenue increased.
D)   An asset increased and another asset decreased.E) All of the above
F) A) and C)

Question 15

Consider the following transactions. 
(i) Collect $100 000 from accounts receivable.
(ii) Receive $80 000 from a client for work to be done in the next accounting period.
(iii) Inventory (costing $50 000) sold on credit for $90 000.
(iv) Shares issued for $1 million.
Which of the above transactions do NOT increase revenue?

Accepted Answer

A)   (i) and (ii) only
B)   (ii) and (iii) only
C)   (i) and (iii) only
D)   (i) ,(ii) and (iv) .E) A) and B)
F) A) and C)

Question 16

During the accounting period there were no share issues,liabilities increased by $45 000,assets increased by $90 000,expenses of $55 000 were incurred and net profit was $115 000.Therefore,dividends declared must have been:

Accepted Answer

A)   $15 000
B)   $60 000
C)   $70 000.D) A) and B)
E) B) and C)

Question 17

Which of the following entries correctly records the receipt of an electricity bill from the power company?
A. DR Electricity expense  $\quad $ CR Accounts payable

B. DR Electricity payable  $\quad $ CR Accounts payable

C. DR Accounts payable  $\quad $ CR Electricity expense

D. DR Accounts payable  $\quad $ CR Utilities payable

Accepted Answer

A

Question 18

Which of the following are credits?

Accepted Answer

A)   increases in expenses
B)   decreases in liabilities
C)   increases in assets
D)   increases in owners' equity.E) A) and C)
F) B) and C) D

Question 19

Given the following information,how much revenue would be recognised in June? (i) Credit sales of $100 000 in June,20% to be collected in June.
(ii) Collected $70 000 in June from customers for May sales.
(iii) Received a deposit in June from a customer for $30 000 for work to be carried out in August.

Accepted Answer

A)   $90 000
B)   $10 000
C)   $120 000
D)   $130 000.E) All of the above
F) C) and D)

Question 20

A company borrows money to purchase equipment,when:

Accepted Answer

A)   one asset increases and another asset decreases
B)   an asset increases and a liability increases
C)   an asset decreases and a liability decreases
D)   an asset decreases and owners' equity decreases.E) B) and C)
F) A) and C)

Exam 3: The Double-Entry System

Income tax previously provided for was paid.

Correct Answer
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A company's first event in the year commencing 1 July 2012 was to pay $250 cash for stationery purchased in June 2012; this was recognised as an expense in that month.Which of the following changes took place as a consequence of this event?

Correct Answer
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A $10 000 receipt was received from an accounts receivable,as a result:

Correct Answer
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Correct Answer
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An account was paid for stationery purchased in the previous accounting period.

Correct Answer
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At the end of the accounting period,3 months' interest is owing to the company on a term deposit with the bank.

Correct Answer
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The assets of ALS Ltd increased by $5476 during year ended 30 June 2012 and during the same period liabilities decreased by $3019.Consequently shareholders' equity must have:

Correct Answer
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If at the end of the financial year,2 months' interest is owing to the company from the bank,the effect on the accounting equation is that:

Correct Answer
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Correct Answer
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Consider the following transactions: (i) issued share capital for cash of $200 000 (ii) received $50 000 from accounts receivable (iii) paid $30 000 to accounts payable (iv) purchased new equipment for $160 000 on credit (v) increased the long service provision by $5000. Total assets increased by:

Correct Answer
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In which of the following transactions or events are the debit entries NOT equal to the credit entries?

Correct Answer
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Correct Answer
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A

Correct Answer
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A customer paid his account in full.

Correct Answer
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Correct Answer
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During the accounting period there were no share issues,liabilities increased by $45 000,assets increased by $90 000,expenses of $55 000 were incurred and net profit was $115 000.Therefore,dividends declared must have been:

Correct Answer
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Correct Answer
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A

Which of the following are credits?

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D

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A company borrows money to purchase equipment,when:

Correct Answer
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Exam 3: The Double-Entry System

Income tax previously provided for was paid.

Correct AnswerverifiedShow Answer

A company's first event in the year commencing 1 July 2012 was to pay $250 cash for stationery purchased in June 2012; this was recognised as an expense in that month.Which of the following changes took place as a consequence of this event?

Correct AnswerverifiedShow Answer

A $10 000 receipt was received from an accounts receivable,as a result:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An account was paid for stationery purchased in the previous accounting period.

Correct AnswerverifiedShow Answer

At the end of the accounting period,3 months' interest is owing to the company on a term deposit with the bank.

Correct AnswerverifiedShow Answer

The assets of ALS Ltd increased by $5476 during year ended 30 June 2012 and during the same period liabilities decreased by $3019.Consequently shareholders' equity must have:

Correct AnswerverifiedShow Answer

If at the end of the financial year,2 months' interest is owing to the company from the bank,the effect on the accounting equation is that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Consider the following transactions: (i) issued share capital for cash of $200 000 (ii) received $50 000 from accounts receivable (iii) paid $30 000 to accounts payable (iv) purchased new equipment for $160 000 on credit (v) increased the long service provision by $5000. Total assets increased by:

Correct AnswerverifiedShow Answer

In which of the following transactions or events are the debit entries NOT equal to the credit entries?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA

Correct AnswerverifiedShow Answer

A customer paid his account in full.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

During the accounting period there were no share issues,liabilities increased by $45 000,assets increased by $90 000,expenses of $55 000 were incurred and net profit was $115 000.Therefore,dividends declared must have been:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA

Which of the following are credits?

Correct AnswerverifiedD

Correct AnswerverifiedShow Answer

A company borrows money to purchase equipment,when:

Correct AnswerverifiedShow Answer

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A

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A

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D

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