Posting the same wrong amount to both sides of the right accounts.
Posting an amount to the wrong side of the right account.
Posting an amount to the right side of the wrong account.
Reversing the postings, that is, debiting the account that s
TOP: Transaction analysis extended
If a company borrows money to purchase equipment:
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. If the assets owned by a business total $90 000 and liabilities total $50 000, then shareholders
equity totals $140 000.
TOP: Maintaining the accounting equation
If a company pays a 12-month insurance premium for $2400 on 1 June 2016,
Which of the following is an internal transaction?
A. Payment of dividends to shareholders
B. Loan to a director
C. Depreciation of equipment
D. Purchase of machinery on credit
TOP: Financial accountings transactional filter
Which of t
TOP: Framework for the preparation and presentation of financial
The practice by Woolworths Ltd of presenting their financial statements in millions of dollars
TOP: Unearned revenues
On 27 September 2016, a builder received an advance of $50 000 from a client for future work.
The work was completed to the clients satisfaction on 3 December 2016. What is the journal
entry made by the builder on
A. $90 000.
B. $100 000.
C. $120 000.
D. $130 000.
TOP: More journal entries
Which of the following items would decrease profit for the year?
A. Purchase of equipment for cash
B. Payment of a dividend
C. Purchase of equipment on credit
For the following transaction, identify the type of change that would have occurred in the
Assets = Liabilities + Issued Capital + Opening retained profits + Revenue Expenses
Commission was earned which will be paid for
TOP: Inventory under different cost flow assumptions
Diligent Ltd had 5 units of the commodity Algo on hand at 1 September 2016. The following
purchases and sales were made during September:
B. $39 000
C. $25 000
D. $23 000
TOP: Preparation using the indirect method
Shippers Ltd made a net operating loss of $42 000. Depreciation expense was $80 000 and loss on
sale of vessels was $170 000. Accounts receivable increased by $6
A. Current asset
B. Noncurrent asset
C. Current liability
D. Noncurrent liability
TOP: A closer look at the balance sheet
To which balance sheet grouping does the item bank loan repayable in three years belong?
A. Current asset
TOP: Straight-line depreciation
Jacques Ltd purchased a computer for $4500 on 1 July 2015. It had an estimated useful life of 3
years. It was depreciated using the straight-line method. The financial year ends on 30 June. What
was the ba
C. Cost of operation is lower.
D. Details of the number of items on hand is available.
TOP: Inventory: cost and benefits of controls
Which of the following is NOT an advantage of the perpetual over the periodic inventory method?
A. A cont
10 units at $60
25 units at $63
30 units at $64
15 units at $70
The firm uses the periodic system and there are 20 units of the commodity on hand at the end of
the year. What is the amount
Indicate which of the features of an effective internal control system are involved in the practices
set out in the following question: The practice of issuing identification cards to employees
A. clear establishment of responsibility lines.
Purchases on credit
Cost of goods sold
Inventory at end
What was the value of opening inventory?
A. $459 000
B. $306 000
C. $204 000
D. None of the answers provided
TOP: Accrual accounting adjustments
Jog Ltd em
On 1 January 2015, Romulus Ltd signed a contract worth $21 000 000 to construct a light rail
from A to B. The light rail was to be built over three years, with progress payments of $7 000 000
to be made at the end of each year. Estimated costs were $1
Which of the following is/are essential requirements for an asset to exist for accounting purposes?
The entity must be able to control the future economic benefits associated with the item.
(ii) The entity must be the lega
The directors of Behrens Ltd decided to issue 300 000 ordinary shares at $1 each. 25 cents per
share was payable on application, 25 cents per share on allotment and the balance through two
equal calls. Applications were received for 250 000 shares, wh
The balance in the Prepaid rent account before adjustment at the end of the year is $15 000, which
represents three months rent paid on May 1. The adjusting entry required on June 30 is:
Gross profit is the difference between:
A. sales revenue and operating expenses.
B. sales revenue and cost of goods sold.
C. operating profit before tax and income tax expense.
D. sales and sales returns.
TOP: The income statement
On 1 January 2016, Sky-High Ltd acquired 100 000 shares (30 per cent of the voting interest) in
Down Ltd for $600 000 cash. On 30 June 2016, Down Ltd announced its earnings per share for
the first six months of 2016 at $1.50 per share. On 20 November,
C. The total of the balances appearing in the accounts in the subsidiary ledger should equal the
balance appearing in the control account.
D. If the total of the subsidiary ledger accounts fails to agree with the balance of the control
account, the subsid
In preparing a bank reconciliation statement for a business with a substantial bank balance, the
appropriate treatment for dividend on shares, $1200, deposited directly into the bank account,
appearing on the bank statement is to:
A. add it to the bal
A. Dr Expenses payable
Cr Advertising expense
B. Dr Advertising expense
Cr Prepaid expenses
C. Dr Prepaid expenses
Cr Expenses payable
D. Dr Advertising expense
Cr Expenses payable
TOP: Accounting books and records
Brownlee Ltd is a newl
The percentage of completion profit for a particular project of Redgate Ltd was $200 000 for year
1 and $220 000 for year 2 (completion). What difference would there be in profit for year 2 if the
completion of production method were used?
A. Profit w
Payments for wages
Purchase of land
Payment of dividends
Purchase of plant
Payment of taxes
Payment of interest
What was the cash flow from investing activities of Staple Ltd?
Which of the following is a financing activity?
A. Repayment of loan by other entity
B. Share buyback
C. Discount received
D. Discount allowed
TOP: Overview of the statement of cash flows
What effect does increasing depreciation expens
D. Governments and professional accounting standard setters have been reluctant to specify all
solutions and require all enterprises to follow them.
TOP: Background to accounting policy choices
In which of the following areas has choice l
D. maximising the net profits of the organisation.
TOP: What is sustainability reporting?
Which of the following is NOT an example of capital that reflects on an organisations impact and
A. Human capital
B. Working capital