Double Entries

Financial Accounting: Key Concepts and
Double Entries UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Profit - Correct answers✔✔Closing net assets + Drawings - Capital introduced - Opening net
assets



Closing net assets - Correct answers✔✔Opening net assets + profit - Drawings + closing
liabilities



Cost of sales - Correct answers✔✔Opening stock + purchases - closing stock



Gross profit - Correct answers✔✔Sales - cost of sales



Net profit - Correct answers✔✔Gross profit - operating expenses



Net assets - Correct answers✔✔assets - liabilties



Assets - Correct answers✔✔Capital + liabilities



Capital - Correct answers✔✔B/F capital + profit - drawings + injections



What is a revenue expenditure and what is a capital expenditure - Correct answers✔✔Revenue =
expense

Capital = asset

, Straight line depreciation - Correct answers✔✔(Cost of asset - residual value) / life expectancy



Double entry for depreciation - Correct answers✔✔Dr Depreciation expense

Cr Accumaltive depreciation



Double entry for disposal of an asset - Correct answers✔✔Dr cash

Dr Accumaltive depreciation

Cr cost of asset



What is the profit/loss equation of a sale of an asset - Correct answers✔✔Proceeds - Net book
value



How do you do a double entry for a discount allowed - Correct answers✔✔Do the normal entry

Dr cash

Cr income



Then an assumed entry

Dr cash

Dr expense

Cr income



How do you do a double entry for a discount received - Correct answers✔✔Do normal entry

Dr expense

Cr cash