O LEVEL ACCOUNTS QUESTIONS

6

Which transaction applies the matching concept?

A

a machine acquired on long-term rental is included in fixed assets

B

computer equipment is depreciated over two years

C

a building is revalued following a fall in property prices

D

a waste-paper basket is treated as revenue expenditure

7

The following debit balance appears on a trial balance after preparing the manufacturing account

for the year.

loose tools $18 000

What is this item?

A

a creditor for loose tools

B

the annual charge for loose tools

C

a prepayment for loose tools

D

stock of loose tools

8

At the year-end a cash book shows a credit balance of $4800.

The bank statement included bank charges of $2

5 which had not been included in the cash book.

Cheque payments entered in the cash book before t

he year end to the value of $250 had not yet

cleared the bank.

How would the bank balance be shown in the balance sheet?

		$
A B C D	CURRENT ASSETS CURRENT LIABILITY CURRENT ASSETS CURRENT LIABILITY	4775 4825 5025 5075