Calculate Petty Cash Balance Assignment

Assignment Task

Question 1

Business A is a credit customer of Business B. Business A says that a statement of account sent by Business B with a balance of $50,000 is incorrect because a credit note of $2,000 and a remittance advice of $15,000 have not been included. What should be the correct balance on the statement of account?

• $63,000
• $37,000
• $33,000
• $67,000

Question 2

A business is owed $10,000 by its credit customers at the beginning and $30,000 at the end of the month. The customers paid the business $40,000 during the month.

How much were the business`s credit sales?

• $20,000
• $50,000
• $70,000
• $60,000

Question 3

Which ledger account records goods returned by credit customers?

• Sales
• Sales Returns
• Purchase
• Purchase Returns

Question 4

An employee`s wages vary each week dependent upon the number of units produced. Which of the following describes the basis on which the employee is paid?

• Overtime
• Piecework
• Unitised
• Piecework hours

Question 5

Charlie is paid a basic hourly rate of $12. If his weekly hours exceed 38 he receives an overtime rate which is 150% of the basic hourly rate. In addition, he receives a productivity bonus of $25 if he produces more than 100 units in a week. If tax is deducted by the employer at 20%, what is Charlie`s net pay for a week in which he works 42 hours and produces 106 units?

• $423.20
• $553.00
• $447.40
• $442.40

Question 6

Which of the following are not details shown in the journal?

• Journal reference
• Ledger accounts to be removed
• Description of the journal entry
• Ledger account to be debited and credited

Question 7

Which transactions require journal entries?

• i)The transfer of an asset into a business by its owner
• ii) Writing off an irrecoverable debt
• i) only
• ii) only
• i) and ii)
• neither i) nor ii)

Question 8

Clive offers the following three discounts to his customers:

• 5% for bulk purchase
• 2% for regular customers
• 3% for early settlement of invoices
• All customers are expected to take advantage of the early settlement discounts.

When Clive calculates sales to be recorded in his financial statements, which discounts should be deducted?

• 1 only
• 1 and 2 only
• 3 only
• 1, 2 and 3

Question 9

Which of the following are reasons why a business must take extra care when accounting for payroll?

• i) Employers effectively act as tax collectors and have statutory responsibilities in most countries
• ii) The accuracy of wages is a matter of great sensitivity for employees
• i) only
• ii) only
• i) and ii)
• neither i) nor ii)

Question 10

A business’s petty cash box contains payment vouchers totalling $457 and receipts vouchers of $84. If the business has an imprest amount of $750, how much cash should the cashier have found in the petty cash box?

• $1,291
• $750
• $377
• $84

Question 11

Which statement is true about petty cash?

• Petty cash payments do not have sales tax
• Petty cash float remains fixed at the start of each month
• Petty cash tin must be balanced at the end of each day
• Petty cash vouchers are the source documents recorded therein

Question 12

Which is most likely paid using petty cash?

• Reimbursement of a taxi fare
• Drawings
• Purchase of a non-current asset
• Supplier refunds

Question 13

Which of the following statements is correct?

i)When paying casual labour through petty cash there is no obligation to deduct income tax

ii)There should be limits on the amount of petty cash held and the maximum allowable petty cash payment

• i) only
• ii) only
• i) and ii)
• neither i) nor ii)

Question 14

Which document is NOT used to verify a supplier invoice for inclusion in the Purchase ledger account?

• Delivery note
• Goods received note
• Purchase order
• Cheque requisition

Question 15

Which item is NOT a current liability?

• Bank loan payable in 5 years
• Interest charges on a loan
• Overdraft
• Trade payables

Question 16

A business needs to make a payment for the purchase of a large item of machinery. The supplier requires guaranteed payment before delivery. Which method of payment would the business be most likely to use for this purpose?

• Cash
• Cheque
• Direct credit transfer
• Direct debit

Question 17

One of a business`s suppliers offers a 5% settlement discount for invoices settled within 30 days. The business has also negotiated a 10% trade discount from the supplier.

The settlement discount is not recorded on the purchase date.

If the business buys goods with a list price of $7,400 and pays after 20 days, how will the payment be recorded by the business? (Ignore sales tax)

• DR Trade Payables: $6,660, CR Cash: $6,327, CR Discounts received: $333
• DR Trade Payables: $7,400, CR Cash: $6,327, CR Discounts received: $1,073
• DR Trade Payables: $7,400, CR Cash: $6,290, CR Discounts received: $1,110
• DR Trade Payables: $6,660, CR Cash: $6,290, CR Discounts received: $370

Question 18

Which of the following is true in respect of business cheques?

• They always require two signatories
• Any employee can sign
• Only individuals on the bank mandate can sign
• All directors of a company can sign

 Question 19

Alice is responsible for processing all purchase transactions. Before she processes a purchase invoice for payment, she completes a checklist to ensure all checks have been carried out.

1. Checked against the purchase order

• Checked against the delivery note
• Calculations checked
• Customer account code entered for posting
• General ledger account code entered for posting

Which would appear on the purchase invoice checklist?

• 1 and 2 only
• 3, 4 and 2 only
• 1, 2, 3 and 5 only
• 1, 2, 3, 4 and 5

Question 20

Gavin is a sole trader. During the year ended 31 December 20X6, he received a salary from the business.

In which ledger account should his salary be debited?

• Drawings
• Business Expenses
• Cost of Sales
• Bank

Question 21

In the course of the bank reconciliation of a business, the following comes to light: a cheque written to a supplier of $341 has not been cashed and cheques paid in yesterday totalling $836 have not yet cleared into the business`s account. In addition, a cheque written for $1,270 was recorded as $1,720. If the cash account balance was DR $8,923 prior to the reconciliation, what was the balance on the business`s bank statement?

• DR $8,878
• CR $8,878
• DR $9,868
• CR $9,868

Question 22

Which best describes the segregation of duties concerning receiving payments?

• Two members of staff should go to the bank to deposit receipts
• Different individuals should record monies received each week
• The person receiving and counting monies received should not also be responsible for recording them
• Incoming mail should be opened in the presence of a second employee

Question 23

Edward’s insurance company makes monthly deductions from his bank account to pay his insurance premium.

What is this type of deduction known as?

• Standing order
• Direct debit
• BACS payment
• Cheque payment

Question 24

Colin is starting a new business as a sole trader, and the business has taken out a loan from the bank for $10,000. He has also paid $2,500 of his own money into the business bank account and used it to purchase a van for $1,000.

What is the balance on Colin`s capital account?

• $10,000
• $2,500
• $1,500
• $12,500

Question 25

A debit entry to a general ledger account can relate to which of the following?

• A decrease in an expense
• A decrease in an asset
• A decrease in a liability
• A decrease in drawings

Question 26

A business`s payables ledger had a total balance of $5,400 at the start of May. During May the business purchases goods to the value of $8,200, half of which is for cash, and sends cheques to suppliers totalling $3,000 only $2,500 of which have been presented at the month end. What is the balance of the business`s payables ledger at the end of May?

• $11,100
• $10,600
• $7,000
• $6,500

Question 27

A business is registered for sales tax and buys goods from a supplier. The business`s purchases net of sales tax of 20% were $31,000. What are the accounting entries necessary?

• DR sales tax: $6,200, DR Purchases: $31,000, CR Payables: $37,200
• DR Payables: $37,200, CR Purchases: $31,000, CR Sales Tax: $6.200
• DR Purchases: $31,000, CR Payables: $31,000
• DR Purchases: $37,200, CR Payables: $37,200

Question 28

The trial balance of Chief failed to balance. Total debit balances were $842,000, and total credit balances were $821,700.

A suspense account was opened for the difference, and the following error was found and corrected:

A discount of $4,300 for prompt settlement of a credit purchase had not been posted to the Discount Received ledger.

After correcting this error, what will the remaining balance be on the suspense account?

• $16,000 Cr
• $16,000 Dr
• $24,600 Dr
• $24,600 Cr

Question 29

A business owes a supplier $6,400 for goods supplied. The supplier is also a customer that owes the business $3,850.

The business and its supplier/customer have agreed to net off their respective amounts owed.

What entries to the business’s general ledger would correctly reflect the net off?

• DR Trade Payables $3,850, CR Trade Receivables $3,850
• DR Trade Receivables $3,850, CR Trade Payables $3,850
• DR Trade Payables $6,400, CR Trade Receivables $6,400
• DR Trade Receivables $6,400, CR Trade Payables $6,400

Question 30

If a business`s liabilities increase by $20,000 and capital falls by $5,000, what must be the change in total assets?

• Increase of $15,000
• Decrease of $15,000
• Increase of $25,000
• Decrease of $25,000

Question 31

A business commences business in June. Its sales account from the general ledger at the end of June is as follows.

Sales Account (Income)

Sales Return - $100

Cash - $250

Trade Receivables - $800

What is the brought-down balance at the start of July?

• CR $1,050
• DR $1,050
• DR $950
• CR $950

Question 32

If a business takes advantage of an early settlement discount, which of the following is true?

It increases purchases

It increases net assets

• i) only
• ii) only
• i) and ii)
• neither i) nor ii)

Question 33

A business discovers that a customer has become bankrupt. The customer owes the business $2,360. If sales tax is 20%, what accounting entries are necessary?

• DR Irrecoverable debts: $2,360, CR Receivables: $2,360
• DR Irrecoverable debts: $1,888, DR Sales tax: $472, CR Receivables: $2,360
• DR Irrecoverable debts: $2,360, CR Sales tax: $393.33, CR Receivables: $1,966.67
• DR Irrecoverable debts: $1,966.67, DR Sales tax: $393.33, CR Receivables: $2,360

Question 34

A cash purchase of $529 was entered into a business`s accounting system as $259. What sort of error is this?

• Error of omission
• Error of Principle
• Transposition error
• Reversal error

Question 35

A credit sale of $34,562 was posted as $35,462 in error, debiting Sales and crediting the Trade Receivables account. What entry would be made to correct this error? (Ignore sales tax)

• DR Trade Receivables: $70,024, CR Sales: $70,024
• DR Trade Receivables: $34,562, CR Sales: $34,562
• DR Trade Receivables: $35,462, CR Sales: $35,462
• DR Trade Receivables: $69,124, CR Sales: $69,124

Question 36

A business`s general ledger contains the following balances:

Sales - 10000

Purchases - 4000

Irrecoverable debts - 500

Receivables - 4000

Payables - 2000

Non-Current assets - 5000

Wages and Salaries - 2000

Capital - 4450

Cash - 950

What will be the total of the debit side of the trial balance?

• $3,500
• $7,950
• $32,900
• $16,450

Question 37

Which statements are true of the Trade Payables account?

The Trade Payables account can be used to derive missing figures such as purchases and cash paid

It provides a figure for inclusion in the trial balance

• i) only
• ii) only
• i) and ii)
• neither i) nor ii)

Question 38

When a business`s accountant prepares the trial balance, a credit of $810 is transferred to the suspense account. Which of the following would explain the need for this?

• The entries for a credit sale of $810 were made the wrong way round
• A cash sale of $1,900 was recorded as $1,090
• A cash purchase of $810 was omitted from the accounting records
• Both entries in relation to a cash sale of $405 were recorded as debits

Question 39

Which of the following is true?

Opening a suspense account allows the trial balance to be redrafted

When the suspense account balance is zero, all errors in the accounting records have been detected and corrected

• i) only
• ii) only
• i) and ii)
• neither i) nor ii)

Question 40

Which of the following is classified as asset expenditure?

• Purchase of shelving units
• Payment of wages to employees
• Bank fees
• Cost of repairing existing computers

Question 41

Which of the following would not be found on the credit side of the Trade Receivables account?

• Irrecoverable debts
• Sales
• Cash received
• Returns

Question 42

If sales exceed purchases, sales tax in the trial balance will be which of the following?

• A credit
• A debit
• Zero
• Either a credit or a debit

Question 43

It has been identified that a credit sale of $349 has been entered twice and another credit sale of $571 was completely omitted. In addition, a cash sale of $286 was posted as $826. In the course of correcting these errors, what would be the total value of entries to the Trade Receivables account?

• $762 DR
• $222 DR
• $762 CR
• $222 CR