Rehna

1. Jo sold a non-current asset which had originally cost $87,600 for $43,000. At the date of disposal, the accumulated depreciation on the asset was $45,800.

What was the profit or loss on disposal of the asset?

A $1,200 profit

B $1,200 loss

C $2,800 profit

D $2,800 loss

2. At his year end, Keith had accrued expenses totaling $4,176 and prepaid expenses totaling $3,718.

How should the accrued and prepaid expenses be reported on Keith’s statement of financial position

(balance sheet)?

A as a current asset of $458

B as a current liability of $458

C as a current asset of $4,176 and a current liability of $3,718

D as a current asset of $3,718 and a current liability of $4,176

3. In June 2008 Laura bought goods for $12,000. She paid $11,000 of this by cheque and agreed a 30 day credit period for the balance. She intends to buy more goods for $13,000 in July 2008.

What value should be reported for Laura’s payables at 30 June 2008?

A $25,000

B $14,000

C $13,000

D $1,000

4. Joe has prepared the following journal entry:

Debit Cash $850

Credit T Sugden $850

Which of the following is the correct narrative for the journal entry?

A Cash sale to T Sugden

B Cash purchase from T Sugden

C Cash payment to T Sugden

D Cash receipt from T Sugden.

5. After completing his final accounts, Kevin found that he had understated a prepayment.

How are Kevin’s net profit and capital affected by the correction of the error?

Net profit Capital

A increased increased

B increased decreased

C decreased increased

D decreased decreased

6. In September 2006 Alison paid $7,800 for rent for the four months from 1 October 2006.

What should be reported on Alison’s balance sheet at 30 November 2006?

A an accrual of $3,900

B an accrual of $1,950

C a prepayment of $3,900

D a prepayment of $1,950

7. Which of the following statements about a trial...