FA1 Practice question set 4

31 Walter sells goods to Ninevah with a list price (exclusive of sales tax) of $4,300, offering a 4% trade discount. Sales tax is 17·5% 

What amount should be recorded for this transaction in the sales account (to the nearest $1)?

A $4,850 

B $4,128 

C $5,053 

D $3,513

32 Which of the following statements regarding sales tax in the trial balance is true? 

A Output tax and input tax are debit balances 

B Output tax and input tax are credit balances 

C Output tax is a credit balance and input tax is a debit balance 

D Output tax is a debit balance and input tax is a credit balance 

33 Which of the following should be classified as current liabilities? 

(1) Trade receivables 

(2) Sales tax payable 

(3) Trade payables 

(4) Drawings 

A 1 and 2 

B 2 and 3 

C 3 and 4 

D 2 and 4 

34 Sally’s balance in her cash book is $160 debit. However her bank statement shows a different amount. On investigation, Sally discovered the following: 

1. A cheque that Sally paid into the bank for $40 is still outstanding 

2. A cheque for $60 paid by Sally to Molly has not yet been presented 

3. Sally has forgotten to record a cash withdrawal of $30 

4. When Sally inspects her bank statement she sees that the bank has deducted charges of $15 from her account. 

What is the balance on Sally’s bank statement? 

A $95 

B $135 

C $185 

D $225  

35 Avalon gives his customers individual trade discounts from the list price and a general 5% cash discount for all invoices settled within seven days of issue. A new customer, Nolava, negotiates a 25% trade discount. His transactions during June are: 

12 June Buys goods with a $5,000 list price 

15 June Returns goods with a $1,000 list price as faulty 

16 June Pays half of the net balance on his account 

How much does Nolava owe Avalon at the end of June? 

A $1,425 

B $1,500 

C $2,000 

D $2,850

Breakdown:list price  5000

     (-)return goods    1000

                               4000

     (-)trade discount 

         4000*25/100   1000  

                               3000

       pay half             1500

       net balance        1500

that means avalon will due on june 1500(B).he will not receive cash discount because he does not pay full amount.

36 Richard has a balance of $350,000 on his payables ledger control account at the end of May. 

What does this mean? 

A He has bought $350,000 of goods in May 

B He is owed $350,000 by his customers 

C He owes $350,000 to his suppliers 

D He has paid $350,000 to his suppliers in May 

37 Melanie is a sales tax registered trader. Her purchases day book shows purchases of $2,000, net of sales tax at 17·5%. 

What double entry will Melanie post at the end of her day’s trading? 

A Dr Purchases $2,000 Cr Payable's $2,000 

B Dr Purchases $2,350 Cr Payable's $2,350 

C Dr Payable's $2,350 Cr Purchases $2,000 Cr Sales tax $350 

D Dr Purchases $2,000 Dr Sales tax $350 Cr Payable's $2,350 

38 Seb packs goods on an assembly line. He is paid a different amount each week, depending on his output of assembled goods. 

By what method of remuneration is Seb paid?

A Piecework 

B Commission 

C Hourly rate 

D Salaried

39 The following ledger balances make up a company’s trial balance: $
Sales 76,700 
Purchases 26,800 
Non-current assets 31,400 
Payable's 18,200 
Receivables 32,300 
Cash at bank 14,200 
Capital 9,800 

What is the total of the debit column of the trial balance? 

A $94,900 

B $104,700 

C $105,900 

D $209,400 

40 Susan is a computer equipment dealer. She uses the following coding system for her financial transactions: 1st number 2nd number 100 Purchases 300 Cash 200 Sales 400 Payable's 500 Receivables Danielle buys computer equipment worth $2,000 on credit from Susan. 

Which of the following would be the code recorded on the invoice issued by Susan? 

A 100300 

B 100400 

C 200300 

D 200500