MCQs Exam Review Sheet Variant 2

PAKISTAN INTERNATIONAL SCHOOL JEDDAH - ENGLISH SECTION
Academic Subject Name Section Date

Year
2022-2023 Accounting Y-9
CW
Chapter 1-6 HW Obtained Marks
1. A supplier offers the following discounts on a sale of goods, list price $2000:
trade discount of 10%

cash discount of 5%
Which amount will be shown in the discount column in the cash book when the
customer pays?
A $90 B $100 C $200 D $300
2. Which of the following is both a book of prime entry and a part of the ledger?
A Cash book
B Journal
C Purchase Journal
D Sales Journal
3. Ace Motors sold a delivery van on credit to M. Johnson.
What entries will be made in the books of Ace Motors?
account debited account credited
A M. Johnson Motor Vehicles

B M. Johnson Sales
C Motor Vehicles M. Johnson
D Sales M. Johnson
4. What is the correct treatment of a sale on credit?
general ledger sales ledger
A debit cash credit sales

B credit sales debit cash
C credit sales debit debtor
D
debit debtor credit sales
5. Which one the following is an error of principle?
A cheque for $85 from W entered in W’s account as $58

B purchase of machinery entered in purchases account
C sales of $400 to X completely omitted from books
D sales to Y entered in account of Z
6. Why should a sole trader record all the financial information about her business?
A because she is required to do so by law

B because she needs to pay her creditors on time
C so that she can prepare final accounts
D so that she knows how much her debtors owe her
7. Which is one reason why the owner of a business needs to know how much profit he has
made?
A to calculate interest payable on a bank loan

B to calculate the cost of sales
C to calculate the return on capital
D to calculate total expenses
8. X owes Y $500 and pays this in cash.
How does this payment affect X’s current assets and current liabilities?
current assets current liabilities

A decrease Decrease
B decrease increase
C increase decrease
D increase increase
9. Why is a Balance Sheet prepared?
A to show debtors and creditors at a certain date

B to show how much profit a business made
C to show the financial position of a business at a certain date
D to show the total debits equal the total credits
10. Melanie is a trader. She returns goods to her supplier.
Which document will Melanie send to her supplier?
A credit note
B debit note
C invoice
D statement
11. On 1st March X, a trader, sells goods on credit terms to Y, a customer.
Y returns some of these goods to X the following day.
In what order will X issue business documents in March?

A credit note, invoice, statement
B invoice, credit note, statement
C invoice, statement, credit note
D statement, credit note, invoice
12. Where is cash discount first recorded?

A cash book
B journal
C ledger
D purchases book
13. Omar returns goods bought on credit from Abdul.
How is this recorded in Omar’s ledger?
account debited account credited

A Abdul Returns Inwards
B Returns Inwards Abdul
C Abdul Returns outwards
D Returns Outwards
Abdul
14. A business received cash from a debtor for goods sold on credit.
What entries record this transaction?
debit credit
A cash Debtor
B cash sales
C debtor cash
D
debtor sales
15. Where are the personal accounts of customers who buy goods on credit found?
A Purchases journal
B Purchases ledger
C Sales journal
D Sales ledger
16. Why is a trial balance prepared?

A To check that totals of debit and credit entries agree
B to give a record of receipts and expenditure
C to provide a means of closing ledger accounts
D to provide a statement of the assets and liabilities
17. X received a cheque from Z, a customer. X recorded it as being received from S,

another customer.
What type of error is this?

A commission
B compensating
C omission
D principle
18. Which of the following in the Balance Sheet of a business shows the owner how well his
business is doing?
A debtors
B drawings
C net profit
D working capital
19. X receives a cheque from a customer and pays this into his business bank account.
How does this affect X’s current assets?
bank debtors
A decrease decrease
B decrease increase
C
increase decrease
D
increase increase
20. What is a Balance Sheet?
A a list of all the accounts in the books of a business

B an account showing the trading activities of a business
C an account showing the financial position of a business at a certain date
D a list of assets, liabilities and capital of a business at a certain date
21. Which document from a supplier reduces the amount owed by a customer?
A credit note
B debit note
C invoice
D statement
22. An invoice for goods for $1200 has been wrongly entered as a credit note. The balance on the
purchases account is $17 000.
What is the correct balance?
A $14600 B $15800 C $18200 D $19 400
23. X returned faulty goods to Y, the supplier.
What are the entries in Y’s books?
debit credit
A purchase returns X
B X purchase returns
C sales returns X
D X sales returns
24. Which ledger account entries are made to record the purchase on credit of a motor vehicle?
debit credit
A creditors motor vehicles
B motor vehicles cash
C motor vehicles creditors
D motor vehicle expenses creditors

25. $2000 paid for Machinery repairs is entered in the Machinery account.
What kind of error is this?
A commission
B compensating
C original entry
D principle
26. In which columns of a trial balance do discounts allowed and discounts received appear?
debit credit
A discount allowed discount received
B discount allowed -
discount received
C discount received discount allowed
D - discount allowed
discount received

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PAKISTAN INTERNATIONAL SCHOOL JEDDAH - ENGLISH SECTION

Academic Subject Name Section Date

trade discount of 10%

A $90 B $100 C $200 D $300

What entries will be made in the books of Ace Motors?

account debited account credited

A M. Johnson Motor Vehicles

4. What is the correct treatment of a sale on credit?

general ledger sales ledger

A debit cash credit sales

5. Which one the following is an error of principle?

A cheque for $85 from W entered in W’s account as $58

A because she is required to do so by law

A to calculate interest payable on a bank loan

8. X owes Y $500 and pays this in cash.

current assets current liabilities

9. Why is a Balance Sheet prepared?

A to show debtors and creditors at a certain date

Which document will Melanie send to her supplier?

11. On 1st March X, a trader, sells goods on credit terms to Y, a customer.

Y returns some of these goods to X the following day.

In what order will X issue business documents in March?

12. Where is cash discount first recorded?

13. Omar returns goods bought on credit from Abdul.

How is this recorded in Omar’s ledger?

account debited account credited

What entries record this transaction?

16. Why is a trial balance prepared?

17. X received a cheque from Z, a customer. X recorded it as being received from S,

What type of error is this?

How does this affect X’s current assets?

20. What is a Balance Sheet?

A a list of all the accounts in the books of a business

What is the correct balance?

A $14600 B $15800 C $18200 D $19 400

23. X returned faulty goods to Y, the supplier.

What are the entries in Y’s books?

A creditors motor vehicles

B motor vehicles cash

C motor vehicles creditors

D motor vehicle expenses creditors

What kind of error is this?

A discount allowed discount received

C discount received discount allowed

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