ATT CBE Accounting Study Guide Exam
Questions And Actual Answers.
What is the double entry to record the sale of goods on credit for £500? - Answer DR: Debtors £500
CR: Sales £500
The profit of a business may be calculated by using which ONE of the following formulae?
Opening net assets - Drawings + Capital introduced - Closing net assets
Closing net assets + Drawings - Capital introduced - Opening net assets
Opening net assets + Drawings - Capital introduced - Closing net assets
Closing net assets - Drawings + Capital introduced - Opening net assets - Answer Closing net assets +
Drawings - Capital introduced - Opening net assets
Which of the following is a correct representation of the accounting equation?
Opening net assets plus profit less drawings less liabilities equals closing net assets
Assets less liabilities less drawings equals opening net assets plus profit
Assets less liabilities less net assets less drawings equals profit
Opening net assets plus profit less drawings plus closing liabilities equals closing assets - Answer
Opening net assets plus profit less drawings plus closing liabilities equals closing assets
,Liabilities of a sole trader's business are £1,702 and assets are £2,431. It is not possible totell how much
capital is in the business.
2 When the sole trader withdraws funds from the business, it is a credit against capital.
1 is true and 2 is false
Both 1 and 2 are true
Both 1 and 2 are false
1 is false and 2 is true - Answer Both 1 and 2 are false. Capital is the difference between liabilities and
assets. Drawingsare a debit against capital
Prepaid expenses are reflected as a debit balance in the trial balance - Answer True
Accrued expenses should be credited to the relevant expense account in the profit andloss account -
Answer False
Customer goodwill built up is not a purchased asset therefore does not qualify to be anintangible asset -
Answer True
Which TWO of the following should be included in the cost of a finished product?
Transport costs from factory to warehouse
Transport costs from supplier to factory
Transport costs from warehouse to customer
,Transport costs of sales staff - Answer Transport costs from factory to warehouse
Transport costs from supplier to factory
These are part of the cost of making the stock. The other items are sales and distribution costs
Which THREE suggest accruals are required in his accounts at the end of March?
Electricity invoice dated February, paying the charges for September to January.
Gas invoice dated March, paying the standing fee for March, April and May.
Telephone invoice dated March, paying the fee for the next quarter and call expenses from January to
March
Water bill dated January paying expenses relating to December to February - Answer Electricity invoice
dated February, paying the charges for September to January
Telephone invoice dated March, paying the fee for the next quarter and call expensesfrom January to
March
Water bill dated January paying expenses relating to December to February
Which of the following statements concerning accounting for stock is false?
At the accounting period end, the stock account should be credited to remove the last accounting
period's closing stock value.
The related debit entry is to cost of sales
, When the stock take has occurred, the value of closing stock will be debited to the stock account.
Closing stock increases the value of cost of sales in the profit and loss account - Answer Closing stock
increases the value of cost of sales in the profit and loss account
Closing stock reduces the value of cost of sales in the profit and loss account.
Identify whether the following statements are true or false.
1 When a company knows that a debtor will not pay for a sale, the sale should be debitedin the profit
and loss account.
2 When a company is uncertain whether a debtor will pay for a sale, the sale should remainin the books,
but an expense debited to account for the possible lack of payment. - Answer 1 is false and 2 is true
1 The company has a policy of making refunds to customers if they find that they have purchased faulty
goods. The directors estimate that about 3% of sales result in a refund.
2 Recent changes in the law mean that the company will have to retrain some of its staff.At the year-end,
it was not yet clear how many staff would be affected or how much thestaff training would cost.
For which of these items should Kola Ltd recognise a provision in the financial statements? - Answer
Item 1 only
In terms of recognition of financial statement items, which THREE of the following statementsare true?
In recognising a liability, it must be probable that economic benefit will flow to the entity.
In recognising an asset, it must be virtually certain that economic benefit will flow to theentity.
Questions And Actual Answers.
What is the double entry to record the sale of goods on credit for £500? - Answer DR: Debtors £500
CR: Sales £500
The profit of a business may be calculated by using which ONE of the following formulae?
Opening net assets - Drawings + Capital introduced - Closing net assets
Closing net assets + Drawings - Capital introduced - Opening net assets
Opening net assets + Drawings - Capital introduced - Closing net assets
Closing net assets - Drawings + Capital introduced - Opening net assets - Answer Closing net assets +
Drawings - Capital introduced - Opening net assets
Which of the following is a correct representation of the accounting equation?
Opening net assets plus profit less drawings less liabilities equals closing net assets
Assets less liabilities less drawings equals opening net assets plus profit
Assets less liabilities less net assets less drawings equals profit
Opening net assets plus profit less drawings plus closing liabilities equals closing assets - Answer
Opening net assets plus profit less drawings plus closing liabilities equals closing assets
,Liabilities of a sole trader's business are £1,702 and assets are £2,431. It is not possible totell how much
capital is in the business.
2 When the sole trader withdraws funds from the business, it is a credit against capital.
1 is true and 2 is false
Both 1 and 2 are true
Both 1 and 2 are false
1 is false and 2 is true - Answer Both 1 and 2 are false. Capital is the difference between liabilities and
assets. Drawingsare a debit against capital
Prepaid expenses are reflected as a debit balance in the trial balance - Answer True
Accrued expenses should be credited to the relevant expense account in the profit andloss account -
Answer False
Customer goodwill built up is not a purchased asset therefore does not qualify to be anintangible asset -
Answer True
Which TWO of the following should be included in the cost of a finished product?
Transport costs from factory to warehouse
Transport costs from supplier to factory
Transport costs from warehouse to customer
,Transport costs of sales staff - Answer Transport costs from factory to warehouse
Transport costs from supplier to factory
These are part of the cost of making the stock. The other items are sales and distribution costs
Which THREE suggest accruals are required in his accounts at the end of March?
Electricity invoice dated February, paying the charges for September to January.
Gas invoice dated March, paying the standing fee for March, April and May.
Telephone invoice dated March, paying the fee for the next quarter and call expenses from January to
March
Water bill dated January paying expenses relating to December to February - Answer Electricity invoice
dated February, paying the charges for September to January
Telephone invoice dated March, paying the fee for the next quarter and call expensesfrom January to
March
Water bill dated January paying expenses relating to December to February
Which of the following statements concerning accounting for stock is false?
At the accounting period end, the stock account should be credited to remove the last accounting
period's closing stock value.
The related debit entry is to cost of sales
, When the stock take has occurred, the value of closing stock will be debited to the stock account.
Closing stock increases the value of cost of sales in the profit and loss account - Answer Closing stock
increases the value of cost of sales in the profit and loss account
Closing stock reduces the value of cost of sales in the profit and loss account.
Identify whether the following statements are true or false.
1 When a company knows that a debtor will not pay for a sale, the sale should be debitedin the profit
and loss account.
2 When a company is uncertain whether a debtor will pay for a sale, the sale should remainin the books,
but an expense debited to account for the possible lack of payment. - Answer 1 is false and 2 is true
1 The company has a policy of making refunds to customers if they find that they have purchased faulty
goods. The directors estimate that about 3% of sales result in a refund.
2 Recent changes in the law mean that the company will have to retrain some of its staff.At the year-end,
it was not yet clear how many staff would be affected or how much thestaff training would cost.
For which of these items should Kola Ltd recognise a provision in the financial statements? - Answer
Item 1 only
In terms of recognition of financial statement items, which THREE of the following statementsare true?
In recognising a liability, it must be probable that economic benefit will flow to the entity.
In recognising an asset, it must be virtually certain that economic benefit will flow to theentity.
