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Home  arrow Student Resources  arrow Business Accounting Volume 2  arrow Part 1: Special accounts  arrow Multiple choice questions

Multiple choice questions

The following questions have been designed to test your knowledge of all areas covered within Part 1 of Business Accounting Volume 2, eleventh edition. Once you have completed the test, click on 'Submit Answers for Grading' to get your results.

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This activity contains 25 questions.

Question 1.
When examining for deficiencies of inventory, a firm would not make allowances for:

End of Question 1

Question 2.
The act of buying an asset without having to make full payment in the immediate future is known as:

End of Question 2

Question 3.
In branch accounting, if the head office maintains all the accounts then the accounts are used for three main purposes. Which one of the following would not apply?

End of Question 3

Question 4.
Which account is used for transactions concerned with head office supplying resources to the branch?

End of Question 4

Question 5.

In branch accounts, the correct double entry to show a profit being transferred to the head office accounts would be:

AIncome statementHead office Current Account
BIncome statementBranch Account
CDebit Current AccountCredit Income statement
DHead office Income statementBranch Current Account
End of Question 5

Question 6.

The double entry need to record the purchase of an asset through hire purchase would be:

ANon-current assetCashbook
BHire purchaseSupplier
CNon-current assetSupplier
DNon-current assetHire purchase
End of Question 6

Question 7.
When conversions due to exchange rates leads to disagreement on the trial balance then, which account should be opened?

End of Question 7

Question 8.
The rules for how to deal with foreign currency are set out in which accounting standard?

End of Question 8

Question 9.

When repaying by instalments to a supplier for a hire purchase, the double entry to record this repayment would be:

AProfit & LossSupplier
DProfit & LossCashbook
End of Question 9

Question 10.
The rules for how to deal with leases and hire purchase contracts is dealt with in which accounting standard?

End of Question 10

Question 11.
If the firm stops making repayments and the goods or assets are taken away from them as a result, this is known as:

End of Question 11

Question 12.
Which of the following would not make a distinction between a hire purchase and a ‘normal’ purchase?

End of Question 12

Question 13.
On the balance sheet of a company, the value of the asset bought through hire purchase will appear as:

End of Question 13

Question 14.
Which of the following is not a feature of an operating lease?

End of Question 14

Question 15.
When making repayments on a lease, the profit and loss account will contain which items relevant to the lease?

End of Question 15

Question 16.
According to the relevant accounting standard, when assets are bought by foreign branches on different dates how should we account for changes in the exchange rates on those dates?

End of Question 16

Question 17.
The depreciation on an asset purchased through hire purchase should be:

End of Question 17

Question 18.
The profit on interest charged on the hire purchase should appear in the income statement in what manner?

End of Question 18

Question 19.
When does the asset legally belong to the purchaser under a hire purchase agreement?

End of Question 19

Question 20.
How should current asset and current liabilities of foreign branches be valued?

End of Question 20

Question 21.
Which of the following does not give a difference between a hire purchase and a normal purchase?

End of Question 21

Question 22.

Which of the following would account for the interest charges relating to hire purchase?

  Debit Credit
A Hire purchase interest Supplier
B Hire purchase interest Profit and loss
C Profit and loss Supplier
D Cashbook Hire purchase interest
End of Question 22

Question 23.
Valuing current assets and current liabilities at the exchange rate ruling on the date of the trial balance is known as which of the following?

End of Question 23

Question 24.
The taking of goods away from customers who fail to keep up with hire purchase payments is known as what?

End of Question 24

Question 25.
A change in the exchange rate of two currencies may not be known as:

End of Question 25

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