Deck 11: Final Accounts and Company Accounts

Question 1

All shares in a company carry equal voting rights irrespective of type.

Answer 1

False

Question 2

Using the information in question 19 above and having had further discussions with Hugh you find that the actual inventory at the year end is £6000 and no charges have been made for the cost of sales and you also find that included in prepayments is £8000 that relates to the year just gone. What is the effect of these on profit and total assets?

A) Decrease in profit of £94000 and decrease in assets of £94000
B) Decrease in profit of £86000 and decrease in assets of £86000
C) Decrease in profit of £102000 and decrease in liabilities of £102000
D) None of the above

Answer 2

D

Question 3

If a business has made a profit of £30000 is liable for tax of £12000, has paid an interim dividend of £6000 and declares a final dividend which has not been paid of £4000 what is its retained profit for the period?

A) £30000
B) £18000
C) £12000
D) £8000

Answer 3

A

Question 4

What entries should be made in the extended trial balance in respect of a bad debt subsequently recovered?

A) Debit the income statement and credit the asset account
B) Debit the income statement and debit the asset account
C) Credit the income statement and credit the asset account
D) Credit the income statement and debit the asset account

Question 5

An extended trial balance is just a longer trial balance.

Question 6

By law a company has to produce annual accounts.

Question 7

What entries should be made in the extended trial balance in respect of a prepayment of rates?

A) Debit the income statement and credit the asset account
B) Debit the income statement and credit the current liabilities
C) Credit the income statement and debit the asset account
D) Credit the income statement and debit the current liabilities

Question 8

Interest and dividends are exactly the same.

Question 9

Tax is always included in the income statement of organisations if they make a profit.

Question 10

What entries should be made in the extended trial balance in respect of a confirmed bad debt?

A) Debit the income statement and credit the asset account
B) Debit the income statement and debit the asset account
C) Credit the income statement and credit the asset account
D) Credit the income statement and debit the asset account
E) None

Question 11

Revaluation reserves arise when assets values increase and this is reflected in the carrying amount of the asset.

Question 12

All partners in a partnership are jointly and severally liable.

Question 13

Final adjustments can only be done on an extended trial balance not on a worksheet.

Question 14

What entries should be made in the extended trial balance in respect of an accrual for electricity charges?

A) Debit the income statement and credit the asset account
B) Debit the income statement and credit the current liabilities
C) Credit the income statement and debit the asset account
D) Credit the income statement and debit the current liabilities

Question 15

If a company has total assets of £98000, equity of £32000, long term liabilities of £18000 what are its current liabilities?

A) £64000
B) £80000
C) £48000
D) £98000

Question 16

What entries should be made in the extended trial balance in respect of depreciation and amortisation?

A) None
B) Debit the income statement and credit the asset account
C) Debit the income statement and credit the accumulated depreciation account
D) Credit the income statement and debit the asset account
E) Credit the income statement and debit the accumulated depreciation account

Question 17

A limited company is different from a partnership as it only has one owner.

Question 18

T accounts and the worksheet are simply different ways of recording transactions.

Question 19

In its trial balance a business has opening inventory of £40000, £ 129000 purchases and you are told its year-end inventory figure is £60000 what entries do you need to make in the final adjustments?

A) Credit inventory with £40000 and debit cost of sales, debit £ 60000 to cost of sales and debit inventory credit purchases with £129000 and debit cost of sales
B) Debit inventory with £40000 and credit cost of sales, debit £ 60000 to cost of sales and credit inventory, credit purchases with £129000 and debit cost of sales
C) Credit inventory with £40000 and debit cost of sales, credit £ 60000 to cost of sales and debit inventory, credit purchases with £129000 and debit cost of sales
D) Credit inventory with £40000 and debit cost of sales, debit £ 60000 to cost of sales and debit inventory debit purchases with £129000 and credit cost of sales