1. Under which inventory control system will the purchases account be debited when inventory is purchased?

1. Under which inventory control system will the purchases account be debited when inventory is purchased?

(1) Perpetual inventory control system

(2) Periodic inventory control system

(3) LIFO

(4) FIFO

2. The following are examples of errors which will be revealed by a trial balance and errors which will not be revealed by a trial balance:

(a) The trial balance has been incorrectly totalled.

(b) Errors of omission.

(c) The balances in the ledger accounts have been incorrectly transferred to the trial balance.

(d) The balance of the ledger account has been incorrectly calculated.

(e) Posting to the wrong account.

Which one of the following groups correctly reflects all the errors which will be revealed by a trial balance?

(1) (a), (c), (d)

(2) (b), (d), (e)

(3) (c), (d), (e)

(4) (b), (c), (d)

3. The following information was obtained from the accounting records of Nkomo Traders for the financial year ended 28 February 2018:

A physical inventory count on 28 February 2018 indicated that inventory on hand amounted to R75 000. The periodic inventory control system is in use.

What is the cost of sales amount for the financial year ended 28 February 2018?

(1) R346 885

(2) R302 150

(3) R250 345

(4) R285 735

4. When using the periodic inventory control system, which general ledger account is used to record the purchases of inventory during the financial year?

(1) Purchases

(2) Inventory

(3) Cost of sales

(4) Purchases returns

5. Which one of the following statements correctly describes the purpose of the purchases journal?

(1) The purchases journal records cash transactions where goods have been purchased.

(2) The purchases journal records credit transactions where goods have been purchased.

(3) The purchases journal records both credit and cash transactions where goods have been purchased.

(4) The purchases journal records credit transactions where goods have been sold.

6. An overdrawn balance of R200 000 in the bank statement will appear as a balance in the ...

(1) credit side of the bank reconciliation statement.

(2) debit side of the bank account in the general ledger.

(3) credit side of the bank statement.

(4) debit side of the bank reconciliation statement.

Use the information provided below to answer questions 7 to 11:

The following information was obtained from the accounting records of Nkomo Dealers for the month ended 31 January 2018.

A comparison of the bank statement with the cash receipts journal and cash payments journal revealed the following differences:

A direct deposit from T Kwamongwe appears in the bank statement of Nkomo Dealers for an amount of R4 000.

The following cheques have not yet been presented for payment as at 31 January 2018:

• 0013 - R1 700

• 0016 - R2 700

The bank charges totalled to an amount of R556,30.

The bank statement revealed a favourable balance of R67 193,70 on 31 January 2018.

The totals in the cash receipts journal and cash payments journal before preparing the bank reconciliation was R195 000 and R180 650 respectively. The closing bank balance in the general ledger was a favourable balance of R45 000 at the end of December 2017.

7. Which amount will be used as the opening balance of the bank account in the general ledger on 1 January 2018?

(1) R195 000

(2) R67 193,70

(3) R45 000

(4) R180 650

8. Which of the following entries will appear in the bank account in the general ledger for the month ended 31 January 2018?

(1) Dr balance R45 000, Dr total receipts R199 000 and Cr total payments R181 206,30.

(2) Dr balance R45 000, Dr total receipts R181 206,30 and Cr total payments R199 000.

(3) Dr balance R67 193,70, Dr total payments R181 206,30 and Cr total receipts R199 000.

(4) Dr balance R67 193,70, Dr total receipts R199 000 and Cr total payments R181 206,30.

9. Which entry will appear in the bank reconciliation statement as at 31 January 2018?

(1) The direct deposit of R4 000.

(2) The bank charges of R556,30.

(3) The outstanding cheques of R4 400.

(4) The balance of the bank account of R45 000.

10. Which amount will appear in the bank reconciliation statement as the balance per the bank statement?

(1) R45 000 credit

(2) R45 000 debit

(3) R67 193,70 credit

(4) R67 193,70 debit

11. Which amount will appear in the bank reconciliation statement as the balance per the bank account?

(1) R67 193,70 credit

(2) R67 193,70 debit

(3) R62 793,70 credit

(4) R62 793,70 debit

12. When goods are sold on credit, the effect will be the following:

(1) The sales account will increase, and the debtors account will decrease.

(2) The sales account will increase, and the debtors account will increase.

(3) The purchases account will increase, and the creditors account will increase.

(4) The purchases account will increase, and the creditors account will decrease.

13. The perpetual inventory control system determines the cost of sales of goods at the time of sale.

When merchandise is sold for cash, the following accounts will be affected (excluding sales and bank account):

(1) Debit cost of sales, credit inventory.

(2) Credit cost of sales, debit inventory.

(3) Debit purchases, credit inventory.

(4) Credit purchases; debit inventory.

14. The following statements describe the financial year:

(a) It consists of 12 consecutive months.

(b) It is the period for which an entity calculates its profit.

(c) It is necessary that it coincide with the calendar year.

(d) It is also called the accounting period.

Which one of the following groups correctly reflects all the statements that are true?

(1) (a), (b), (c)

(2) (a), (b), (d)

(3) (a), (c), (d)

(4) (b), (c), (d)

15. Which one of the following statements does not relate to the closing transfers when an entity uses the periodic inventory control system?

(1) Transfer the opening inventory to the trading account.

(2) Close off the settlement discount granted account to the sales account.

(3) Close off the drawings account by transferring the balance to the capital account.

(4) Close off the cost of sales account to the trading account.