Questions and Answers of Business Accounting

The Milham Theatre Club has been in existence for a number of years. Members pay an annual subscription of £15 which entitles them to join trips to professional productions at a reduced rate.On 1
The treasurer of the Plumpton Leisure Centre has produced the following receipts and payments account for the year ended 31 December 20X4:Notes:(i ) Refreshment stocks were valued: 31 December 20X3
Read the following and answer the questions below.On 1 January 20X8 The Happy Haddock Angling Club had the following assets:During the year to 31 December 20X8 the Club received and paid the
Although Janet Lambert has run a small business for many years, she has never kept adequate accounting records. However, a need to obtain a bank loan for the expansion of the business has
A summary of the Downline Rugby Club is shown below. From it, and the additional information, you are to construct an income and expenditure account for the year ended 31 December 20X6, and a balance
On 1 May 20X8 Jenny Barnes, who is a retailer, had the following balances in her books: Premises £70,000; Equipment £8,200; Vehicles £5,100; Stock £9,500; Trade debtors £150. Jenny does not keep
A Bell has kept records of his business transactions in a single entry form, but he did not realise that he had to record cash drawings. His bank account for the year 20X8 is as follows:Records of
The following is a summary of Jane’s bank account for the year ended 31 December 20X2:All of the business takings have been paid into the bank with the exception of £17,400. Out of this, Jane has
B Barnes is a dealer who has not kept proper books of account. At 31 October 20X3 his state of affairs was as follows:During the year to 31 October 20X4 his drawings amounted to £32,200. Winnings
The following trading account for the year ended 31 December 20X8 is given to you by M Pole:Pole says that normally he adds 20% to the cost of goods to fix the sales price. However, this year saw
F Lee started in business on 1 January 20X2 with £35,000 in a bank account. Unfortunately he did not keep proper books of account.He is forced to submit a calculation of profit for the year ended 31
The following figures relate to the retail business of A Bell for the month of July 20X3. Goods which are on sale fall into two categories, X and Y.You are to calculate for each category of goods:(a)
R Jack gives you the following information as at 31 March 20X5:Jack’s mark-up is 40% on ‘cost of goods sold’. Her average stock during the year was £17,000. Draw up a trading and profit and
G Flynn is a trader who sells all of his goods at 20% above cost. His books give the following information at 31 December 20X7:You are required to:(a) Ascertain cost of goods sold.(b) Show the value
L Hope’s business has a rate of stock turnover of 8 times per year. Average stock is £16,240. Mark-up is 60%. Expenses are 70% of gross profit.You are to calculate:(a) Cost of goods sold.(b) Gross
The bookkeeper of a firm failed to agree the trial balance at 30 June, the end of the financial year. She opened a suspense account into which she entered the amount she was out of balance and
Journalise the matters arising from the following items in the books of B Danby, including the narrative in each case. Note that for this purpose cash and bank items may be journalised. In the case
At the end of a financial year, the trial balance of a small company failed to agree and the difference was entered in a suspense account. Subsequently, the following errors were discovered:(i) The
The following points were discovered in the books of a small building firm before the closing entries had been made. Draft financial statements had already been prepared and showed a net profit of
The following is a trial balance which has been incorrectly drawn up:In addition to the mistakes evident above, the following errors were also discovered:1. A payment of £315 made to a creditor had
Chi Knitwear Ltd is an old-fashioned firm with a handwritten set of books. A trial balance is extracted at the end of each month, and a profit and loss account and balance sheet are computed. This
The trial balance as at 30 April 20X7 of Timber Products Limited was balanced by the inclusion of the following debit balance:Difference on trial balance suspense account £2,513.Subsequent
Study the following and answer the questions below. The trial balance of Mary Harris (Gowns) as at 31 December 20X8 showed a difference which was posted to a suspense account. Draft final accounts
Show how each of the following errors would affect trial balance agreement:(i) Computer repairs £184 was debited to the computer account.(ii) £819 discounts received credited to discounts allowed
You have extracted a trial balance and drawn up accounts for the year ended 31 December 20X7. There was a shortage of £78 on the credit side of the trial balance, a suspense account being opened for
Thomas Smith, a retail trader, has very limited accounting knowledge. In the absence of his accounting technician, he extracted the following trial balance as at 31 March 20X8 from his business’s
Your bookkeeper extracted a trial balance on 31 December 20X5 which failed to agree by £210, a shortage on the credit side of the trial balance. A suspense account was opened for the difference. In
A trial balance was extracted from the books of V Baker, and it was found that the debit side exceeded the credit side by £40. This amount was entered in the suspense account. The following errors
Journal entries to correct the following are required, but the narratives can be omitted.(a) Rent Received £430 have been credited to the Commissions Received account.(b) Bank charges £34 have been
After preparing its draft final accounts for the year ended 31 March 20X6 and its draft balance sheet as at 31 March 20X6 a business discovered that the stock lists used to compute the value of stock
Give the journal entries needed to record the corrections of the following. Narratives are not required.(a) Extra capital of £5,000 paid into the bank had been credited to Sales account.(b) Goods
Show the journal entries necessary to correct the following errors:(a) A sale of goods £412 to T More had been entered in T Mone’s account.(b) The purchase of a machine on credit from J Frank for
Give an example of each of the different types of error which are not revealed by a trial balance?
A friend of the family believes that depreciation provides him with a reserve to purchase new assets. His secretary has blown up his computer, but he knows he has the funds to replace it in the
On 1 September, V Duckworth, a bar manager and entrepreneur, has the following financial position relating to her activities as a corporate function organiser:During September the following events
(a) What is the meaning of depreciation?(b) Give three reasons why depreciation may occur.(c) Name two methods of depreciation.(d) In what way do you think the concept of consistency applies to
The following is a summary of the receipts and payments of the Miniville Rotary Club during the year ended 31 July 20X9.The following valuations are also available:Required:(a) Calculate the value of
A business prepares its financial statements annually to 30 April and stock-taking is carried out on the next following weekend. In 20X5, 30 April was a Wednesday. Stock was taken on 3 May and the
Bill Smithson runs a second-hand furniture business from a shop which he rents. He does not keep complete accounting records, but is able to provide you with the following information about his
R Sheldon presents you with the trading account set out above. He always calculates his selling price by adding 331/3% of cost on to the cost price.(a) If he has adhered strictly to the statement
Complete the gaps in the following table: (b) (c) (d) (f) Assets £ 12,500 28,000 16,800 19,600 ? ? Liabilities £ 1,800 4,900 ? · ? 6,300 11,650 Capital 42.7. ? ? 12,500 16,450 19,200 39,750
Complete the gaps in the following table: (a) (b) (c) (d) (e) (f) Assets £ 55,000 ? 36,100 119,500 88,000 ? Liabilities £ 16,900 17,200 ? 15,400 ? 49,000 Capital £ ? 34,400 28,500 ? 62,000 110,000
Which of the items in the following list are liabilities and which of them are assets?(a) Loan to C Shirley(b) Bank overdraft(c) Fixtures and fittings(d) Computers(e) We owe a supplier for goods(f)
State which of the following are wrongly classified: Assets Loan from C Smith Cash in hand Machinery Creditors Premises Motor vehicles Liabilities Stock of goods Debtors Money owing to bank
Classify the following items into liabilities and assets:(a) Motor vehicles(b) Premises(c) Creditors for goods(d) Stock of goods(e) Debtors(f) Owing to bank(g) Cash in hand(h) Loan from D Jones(i)
Which of the following are shown under the wrong headings? Assets Cash at bank Fixtures Creditors Building Stock of goods Debtors Capital Liabilities Loan from J Graham Machinery Motor vehicles
B Wise is setting up a new business. Before actually selling anything, he bought a van for £4,500, a market stall for £2,000 and a stock of goods for £1,500. He did not pay in full for his stock
Draw up G Putty’s balance sheet from the following information as at 31 December 20X8: Capital Debtors Van Creditors Fixtures Stock of goods Cash at bank £ 7,200 1,200 3,800 1,600 1,800 4,200 300
Draw up A Brick’s balance sheet as at 30 June 20X6 from the following items: Capital Equipment Creditors Stock of goods Debtors Cash at bank £ 10,200 3,400 4,100 3,600 4,500 2,800
F Flint is starting a business. Before actually starting to sell anything, he bought fixtures for £1,200, a van for £6,000 and a stock of goods for £2,800. Although he has paid in full for the
Complete the columns to show the effects of the following transactions: (a) We pay a creditor £70 in cash. (b) Bought fixtures £200 paying by cheque. (c) Bought goods on credit £275. (d) The
Complete the columns to show the effects of the following transactions; (a) Bought a van on credit £8,700. (b) Repaid by cash a loan owed to F Duff £10,000. (c) Bought goods for £1,400 paying by
Write up the asset and liability and capital accounts to record the following transactions in the records of F Murray. 20X7 July "1 11 1 Started business with £15,000 in the bank. 2 Bought office
G Brown has the following items in her balance sheet as on 30 April 20X8: Capital £18,400; Creditors £2,100; Fixtures £2,800; Car £3,900; Stock of goods £4,550; Debtors £2,780; Cash at bank
You are required to open the asset and liability and capital accounts and record the following transactions for June 20X8 in the records of P Bernard. 20X8 June 11 "1 11 11 11 11 "1 "1 Started
J. Hill has the following assets and liabilities as on 30 November 20X9: Creditors £2,800; Equipment £6,200; Car £7,300; Stock of goods £8,100; Debtors £4,050; Cash at bank £9,100; Cash in hand
Write up the accounts to record the following transactions: 20X7 March 1 Started business with £750 cash and £9,000 in the bank. 11 2 Received a loan of £2,000 from B Blane by cheque. 3 Bought a
You are to write up the following in the books: 20X8 July "1 "1 11 "1 "1 "1 "1 "1 3 7 Started in business with £750 cash. Bought goods for cash £110. Bought goods on credit £320 from F Herd. 10
Enter the following transactions in the appropriate accounts: 20X6 Aug 1 Started in business with £7,400 cash. 11 11 11 11 11 11 11 11 11 11 11 2 4 5 7 10 12 19 Sold goods for cash £54. 22 Bought
Enter the following transactions in the accounts: 20X9 May "1 "1 "1 "1 "1 "1 11 11 11 11 11 11 11 11 "1 2 Started in business with £18,000 in the bank. Bought goods on credit from B Hind £1,455. 3
Enter the following transactions, completing the double entry in the books for the month of May 20X7. 20X7 May "1 "1 "1 "1 "1 "1 = = Started in business with £10,000 in the bank. 2 Purchased goods
Write up the following transactions in the books of P Hewitt: 20X8 March 1 Started in business with cash £8,500. "1 2 Bought goods on credit from W Young £420. Paid rent by cash £210. 3 4 Paid
Prepare the double entries (not the T-accounts) for the following transactions using the format: Date July "1 "I 11 "1 "1 "I "1 "1 "1 11 "1 "1 "" "1 "1 Account name Account name 1 Started in business
From the following statements which give the cumulative effects of individual transactions, you are required to state as fully as possible what transaction has taken place in each case. That is,
Write up the following transactions in the T-accounts of F Fernandes: Feb 11 "1 "1 11 "1 1 Started in business with £11,000 in the bank and £1,600 cash. 2 Bought goods on credit: J Biggs £830; D
The following table shows the cumulative effects of a succession of separate transactions on the assets and liabilities of a business. The first column of data gives the opening
Enter the following items in the appropriate debtors’ accounts (i.e. your customers’ accounts) only; do not write up other accounts. Then balance off each of these personal accounts at the end of
Enter the following in the appropriate creditors’ accounts (i.e. your suppliers’ accounts) only. Do not write up the other accounts. Then balance off each of these personal accounts at the end of
Enter the following in the personal accounts (i.e. the creditor and debtor accounts) only. Do not write up the other accounts. Balance off each personal account at the end of the month. After
Enter the following transactions in personal accounts only. Bring down the balances at the end of the month. After completing this, state which of the balances represent debtors and which are
Redraft each of the accounts given in your answer to 5.1 in three-column ledger style accounts. 5.1 Enter the following items in the appropriate debtors' accounts (i.e. your customers' accounts)
Redraft each of the accounts given in your answer to 5.2 in three-column ledger style accounts. 5.2 Enter the following in the appropriate creditors' accounts (i.e. your suppliers' accounts) only. Do
You are to enter up the necessary accounts for the month of May from the following information relating to a small printing firm. Then balance off the accounts and extract a trial balance as at 31
Enter the following transactions of an antiques shop in the accounts and extract a trial balance as at 31 March 20X6. 20X6 March 1 Started in business with £8,000 in the
Record the following details relating to a carpet retailer for the month of November 20X7 and extract a trial balance as at 30 November 20X7: 20X7 Nov 11 11 "1 "1 "1 "1 1 Started in business with
Redraft each of the accounts given in your answer to 5.6A in three-column style accounts. 5.6A Enter the following transactions in personal accounts only. Bring down the balances at the end of the
Record the following transactions for the month of January of a small finishing retailer, balance off all the accounts, and then extract a trial balance as at 31 January 20X8:
On 1 October 20X9, the owner of the USS Enterprise, Mr Kirk, decided that he will boldly go and keep his records on a double entry system. His assets and liabilities at that date were:Kirk’s
From the following trial balance of B Morse drawn up on conclusion of his first year in business, draw up a trading and profit and loss account for the year ended 31 December 20X8. A balance sheet is
From the following trial balance of B Lane after his first year’s trading, you are required to draw up a trading and profit and loss account for the year ended 30 June 20X8. A balance sheet is not
Henry York is a sole trader who keeps records of his cash and bank transactions in a threecolumn cash book. His transactions for the month of March were as follows:Required:(a) Enter the above
Extract a trading and profit and loss account for the year ended 30 June 20X8 for G Graham. The trial balance as at 30 June 20X8 after his first year of trading was as follows:Stock at 30 June 20X8
Complete question 7.1 by drawing up a balance sheet as at 31 December 20X6.Data from Question 7.1From the following trial balance of A Moore, extracted after one year’s trading, prepare a trading
Complete question 7.2 by drawing up a balance sheet as at 30 June 20X8.Data from Question 7.2From the following trial balance of B Lane after his first year’s trading, you are required to draw up a
Complete question 7.3A by drawing up a balance sheet as at 31 December 20X8.Data from Question 7.3AFrom the following trial balance of B Morse drawn up on conclusion of his first year in business,
Complete question 7.4A by drawing up a balance sheet as at 30 June 20X8.Data from Question 7.4AExtract a trading and profit and loss account for the year ended 30 June 20X8 for G Graham. The trial
G. Hope started in business on 1 July 20X0, with £40,000 capital in cash. During the first year he kept very few records of his transactions.The assets and liabilities of the business at 30 June
The following information relates to A Trader’s business:During the year, Trader had sold private investments for £4,000 which he paid into the business bank account, and he had drawn out £200
From the following trial balance of G Still, draw up a trading and profit and loss account for the year ended 30 September 20X9, and a balance sheet as at that date.Stock at 30 September 20X9 was
From the following information, draw up the trading account of J Bell for the year ended 31 December 20X7, which was his first year in business: Carriage inwards Returns outwards Returns
The following information is available for the year ended 31 March 20X8. Draw up the trading account of P Frank for that year. Stocks: 31 March 20X8 Returns inwards Returns
The following trial balance was extracted from the books of F Sorley on 30 April 20X7. From it, and the note about stock, prepare his trading and profit and loss account for the year ended 30 April
The following is the trial balance of T Owen as at 31 March 20X9. Draw up a set of financial statements for the year ended 31 March 20X9.Stock at 31 March 20X9 was £58,440. Stock 1 April
F Brown drew up the following trial balance as at 30 September 20X8. You are to draft the trading and profit and loss account for the year ended 30 September 20X8 and a balance sheet as at that
From the following trial balance of Kingfire, extracted after one year of operations, prepare a trading and profit and loss account for the year ending 30 June 20X3, together with a balance sheet as
Write up a two-column cash book for a pine furniture shop from the following details, and balance it off as at the end of the month: 20X8 May "1 "1 "1 "1 "1 "1 11 "1 "1 "1 2 3 Started in business
What is meant by the ‘money measurement concept’?
A three-column cash book for a wine wholesaler is to be written up from the following details, balanced off, and the relevant discount accounts in the general ledger shown. 20X8 Mar 1 Balances
Explain the term ‘materiality’ as it is used in accounting.
Write up a two-column cash book for a second-hand bookshop from the following: 20X9 Nov 11 11 "1 11 11 11 11 11 11 11 11 11 11 "1 11 Balance brought forward from last month: Cash £295; Bank

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