Recording Financial Transactions (T1)

Mock Test – 1
Set A
1. The main types of business transactions are :
a. Sales
b. Purchase
c. Capital
d. A&B

2. What is or are the purpose of the accounting system?

a. Record
b. Summaries
c. Present
d. All of above
3. A customer writes out an order for goods he wishes to buy, is called :
a. Purchase order
b. Delivery note
c. Sales order
d. None
4. ‘F O B’ stands for :
a. fair of business
b. free of bonus
c. fund of books
d. free on board
5. Which is the correct equation?
a. Net assets = Current assets – Total liabilities
b. Assets = (capital + retained profits) + Liabilities
c. Assets = (Capital introduced + retained profit) – liabilities
d. Assets = ( Capital introduced + retained profit) + liabilities
6. Cash is introduced into the business by its owner which transaction is correct?
a. Assets increase, Capital increase
b. Assets decrease, Capital decrease
c. Capital increase, liabilities decrease
d. Assets increase, liabilities decrease
7. Which is not correct?
a. Assets = Capital + liabilities
b. Assets = Capital introduced + (earned profit – liabilities) + Drawings
c. Net assets = Total assets – Total liabilities
d. B & C
8. Which is not an example of current liabilities?
a. Bank overdrafts
b. Trade payables
c. Drawings
d. Taxation payable
9. Gross profit = ----------
a. Sales value – Purchase cost
b. Sales – Cost of sales
c. C & B
d. None of them
10. A balance sheet is a statement of __________ of a business at a given moment in
time.
a. Future position
b. The financial position
c. Past position
d. A & B
11. Which is not a book of prime entry?
a. Sales day book
b. Purchase day book
c. Price book d. Cash book
12. You pay D Smith $500. State this transaction in which books of prime entry would
be entered?
a. Cash book
b. Patty cash book
c. Journal
d. Sales day book
13. Which of the following will not be entered in the cash book?
a. Supplier’s invoice
b. Credit note
c. Debit note
d. A,B&C
14. Which of the error is coincidentally, equal and opposite to one another?
a. Error of transposition
b. Compensating error
c. Error of omission
d. Error of principle
15. A___________ is a program which deals with one particular part of a business
accounting system. Which of the following will be in the gap?
a. Payroll
b. Module
c. Software
d. Cash book

16. A_________ is made up of records which are made up of fields. Which of the
following will be in this gap?
a. Program
b. Patty cash book
c. File
d. Journal
17. What must be banked promptly?
a. Receipts
b. Payment
c. Cheque
d. Cash
18. Which of the followings is the evidence of payment?
a. Credit card
b. Debit card
c. Cheque
d. All of above
19. EFTPOS means____
a. English Financial Transfer at part of studies
b. Electronic Financial Transfer at point of Sale
c. Electronic Financial Transfer at point of Sale
d. Electronic Funds Transfer at point of sale.
20. Which of the following is not a smaller retail bank?
a. Barclays
b. Co-operative Bank
c. Yorkshire Bank
d. Abbey National
21. How many steps are there in applying controls over payments?
a. 2
b. 3
c. 4
d. 1
22. Which of the following are most common methods of payment?
a. Cash
b. Cheque
c. Direct debit
d. Standing order
 23. A $ 10 discount was allowed on our amount payable of $100. Which of the
following is correct?
$ $
a. Debit- Account payable 90
Credit- Cash 90
b. Debit- Cash 90
Credit-- Account payable 90
c. Debit-- Account payable 100
Credit- Cash 10
d. Debit- Cash 100
Credit-- Account payable 10
24. Which of the following automated credit system is used for processing?
a. standing orders
b. Direct debit
c. A&B
d. all
25. Which is the small item for expense?
a. Cash
b. Petty cash
c. Cheque
d. Draft
26. Who gets paid out of petty cash?
a. employee
b. employer
c. supplier
d. A&C
27. __________ petty cash might occur wherever the read arises which of the following
will be in this gap?
a. Topping up b. Imprested
c. none d. All of above
28. Which of the following is not an item of petty cash voucher?
a. Voucher b. Date
C. Cheque no d. Signature
29. What is or are the terms of bank reconciliation?
a. Correct the cash book.
b. Reconcile the bank Balance to the corrected cash book
c. A&B
d. None
30. What is including in a bank statement?
a. The transaction on the bank in a bank account of a business.
b. The transaction between customer & supplier
c. Petty cash transaction.
d. Transaction is a company credit card.

31. Which of the following is a valid method of payment?

a. A credit card in excess of its limit
b. A cheque on which the amounts in words and figures differ.
c. Cash
d. Pay order
32. The standard rate of sales tax is____
a. 19.5%
b. 18.5%
c. 17.5%
d. 17.05%

33. The sales returns day book is a listing of sales returns. In the gap
a. Valid b. True
c. One of method d. Chronological
34. What the sales account records?
a. Assets
b. Expense
c. Income
d. Profit

35. What does the receivable ledger contain?

a. The personal accounts of customer
b. The personal records of customer
c. The personal accounts of supplier
d. The personal records of supplier

36. ‘The customer has gone bankrupt’- this is an example of

a. Receivable
b. Bad debt
c. Payable
d. Theft

37. Which of the following is on item of sales daybook?

a. Signature
b. Sales tax
c. Sales returns
d. Debt

38. what is a debit note?

a. A debit note is issued to some one when you wish then to reduce your liability.
b. A debit note is received from someone when you
c. A debit notes issued to someone when you wish them to increase your capital.
d. All of above
39. What is the double entry for a credit purchase?
a. Debit – Payable, Credit - purchase
b. Debit – purchases, Credit- payables
c. Debit- assets, Credit- payables
d. Debit payables, Credit- assets

40. In a purchase system the must obvious example is________

a. Supplier account number
b. Product number
c. Service number
d. All above

41. An over of the supplier’s balance might be made in error. This statement in the
payables ledger’s balance will be:
a. Credit balance
b. Debit balance
c. A&B
d. None

42. What is the double entry for cash discount’s received from suppliers?
a. Debit- Suppliers, Credit- Discount
b. Debit- payable control account, Credit- Payable control account
c. Debit discountable received, credit- Payable control account
d. Debit- Discount, credit- Supplier
43. What is the status of a trade account payable in the accounts of a business?
a. An asset
b. An expense
c. A liabilities
d. Revenue
44. Which of the following is not the main type of report?
a. Day books
b. Sales tax analysis
c. A& B
d. “A” only

45. What does the balance on the payable control account represent?
a. The total amount owed by business to its suppliers.
b. The total owes to the business to its suppliers.
c. The total amount liable to the business to its suppliers
d. None

46. A trial balance is a type of_______

a. Account
b. Journal
c. Expense
d. Internal check

47. Which of the item in kept in Control Counts?

a. Goods
b. Wages
c. Salaries
d. B, C & A

48. What is payroll?

a. A payroll is a list employee
b. A payroll is a list of employees and Yare to be paid
c. A&B
d. None
49. What is NOT the main requirement of a payroll processing?
a. Accuracy
b. Timeliness
c. Security
d. Certainty

50. What is the right formula?

a. Wages = Units produced X Rate of pay per unit
b. Wages = Units purchased X Rate of Pay per unit
c. Wages = Units produced / Rate of pay per unit
d. Wages = Units perched / Rate of pay per unit.
Answer
Mock test – 1 (Set A)

1.d 26.d
2.d 27.a
3.c 28.c
4.d 29.c
5.d 30.a
6.a 31.c
7.b 32.c
8.c 33.d
9.c 34.c
10.b 35.a
11.c 36.b
12.a 37.b
13.d 38.a
14.b 39.b
15.b 40.d
16.c 41.c
17.a 42.b
18.d 43.c
19.d 44.c
20.a 45.a
21.b 46.d
22.b 47.d
23.a 48.b
24.d 49.d
25.b 50. a