ASG diagnostic test - this is the self assessment test for accounting standards and governance PDF

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this is the self assessment test for accounting standards and governance...

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A motor vehicle, which had a carrying amount at the end of the financial year 2011/12 of $18 000, was disposed of on 1 November 2012. Depreciation was calculated on the vehicle at 20% per annum using the diminishing-balance method. What was the depreciation expense charged for the first 4 months of the financial year 2012/13, before the asset was sold?

FK Ltd’s fleet of delivery trucks (original cost $850 000) had a carrying amount on 1 July 2012 of $470 000. On that date their value was revised to $500 000. Future depreciation charges will be based on which amount? 500,000

The assumption which requires transactions to be recognised in the accounting reports when they occur and not when the cash is received or paid is: accrual basis. The measure to reduce bad debts that is undertaken before the debt occurs is: a credit check.

Tan Traders is owed $350 interest on an investment which has not been received by 3l December 2014, the last day of the accounting year. The adjusting entry is which of the following? Debit accounts receivable $350; credit interest income $350

The balance sheet of Doorbell Ltd at 31 December 2014 showed: $ Equipment

80 000

Accumulated depreciation of equipment

63 000 17 000

On 1 January 2015 the equipment was sold for $15 000. What is the accounting entry to record the receipt of the proceeds from the sale of the equipment? Dr bank 15,000, Cr credit proceeds from sale of equipment 15,000

Michael purchased two vehicles for his business on 1 January 2014. These vehicles cost $70 000 each and have a useful life of 5 years with an expected residual of $20 000 each. The adjusting entry for depreciation on 31 December 2014, using the straight-line method, is which of the following? DR Depreciation expense $20 000 CR Accumulated depreciation $20 000

For M Ltd the general journal entry for a sale of $3300, including GST, paid for by the customer with a bank issued credit card, is which of the following? Debit bank $3300; credit sales $3000; credit GST collected $300

The reason it is necessary to prepare adjusting entries at the end of the financial year is: to provide as accurate a profit measurement as possible.

Which of the following is the general journal entry to provide for estimated bad debts under the allowance method? Debit bad debts expense; credit allowance for doubtful debts

Which of the following is the correct closing entry for sales income of $30 000? Dr Sales Cr profit and loss summary

Christo uses the allowance method of accounting for bad and doubtful debts. When he received notice that Debtor 3459, who owed him $10 000, was in liquidation he decided to write off the debt as bad. What is the general journal entry to record the write off? Dr allowance for doubtful debts/bad debt expense 10,000, Cr account receivable 10,000

In the financial statements prepared at the end of the accounting period the item accumulated depreciation appears on: the balance sheet as a deduction from the related asset. In the closing process which accounts are closed? All income and expense accounts A listing of the complete ledger account titles and their related numbers is known as a/an: chart of accounts. Kent Ltd issued 15 000 shares with an issue price of $1.60 on which the full price has been paid to the company. The maximum additional amount the shareholders can be asked to contribute if the company cannot pay its debts is: Nil.

What type of account is prepaid insurance? Asset

Which of these is not an example of a fixed asset for a company engaged in mining coal? Stock of coal

A reserve is what type of account? Equity

The assumption underlying the reducing balance method of depreciation is: the asset makes a higher contribution to income in the earlier years of its life. If a computer with a fully depreciated cost of $30 000 is discarded as worthless, the accounting entry to record the scrapping is which of the following? Debit accumulated depreciation computer $30 000; credit computer $30 000 In order to assess an entity’s cash performance it is common to classify its activities into operating, investing and financing. For a medical practice, which of the following would be an operating activity? Billing a patient for a consultation. On 1 January 2014 Image Plus Ltd acquired electronic equipment for $18 000, net of GST. It is estimated it will have no residual value. If depreciation is provided at 10% p.a. on the diminishing-balance basis, the depreciation charge for the year ended 31 December 2016 is: $1458 On 1 January 2017 the balance in Detrack Pty Ltd’s retained earnings account was $50 000. The balance on 31 December 2017 was $100 000. On 10 December 2017 dividends of $50 000 were declared payable on 31 January 2018. Assuming all closing entries have been completed the profit for 2017 was: 50,000

On 31 December 2014 an aeroplane with a cost of $200 000 has had accumulated depreciation written off of $170 000. If it was sold for a profit of $30 000 on 1 January 2015 how much was recorded as income from the proceeds of the sale? A firm reported that accounts receivable increased by $30 000 between the current and the prior year. If accrual-basis sales were $200 000 the amount of cash received from customers during the year was: $170 000.

Assume that no reversing entries are made by this firm. If wages of $11 200 were accrued by it at the end of the year and the first payment of wages in the subsequent year was $101 600 how would this payment be recorded? Debit salaries payable $11 200; debit salaries expense $90 400; credit cash $101 600

A firm repays $4000 of an existing bank loan. The transaction is recorded as which of the following entries? DR Bank loan $4000; CR Cash at bank $4000 What effect does this journal entry have on cash flows?

Dr Depreciation expense Cr Accumulated depreciation

$88 200 $88 200

No effect on outflows or inflows The system where every transaction affects at least two components of the accounting equation is known as: double-entry accounting. The correct entry to record the purchase of a motor vehicle for $25 000 cash, plus 10% GST is which of the following? Debit motor vehicles $27 500; credit bank $25 000; credit GST collected $2500 A listing of the complete ledger account titles and their related numbers is known as a/an: general ledger. How would the purchase of government bonds by a golf club be reported in the statement of cash flows? Investing outflow

Determine the amount of cash received from customers during 2017. Accounts receivable (31-Dec-2016) $21 000 Accounts receivable (31-Dec-2017) $24 000 Sales $120 000 $123,000 When an asset is sold the gain or loss on disposal is the difference between the: proceeds of sale and the carrying amount of the asset. On July 1 2014 the Indigo Ltd rented out part of its property and collected $9000 in advance for a nine-month period. The receipt was credited to a liability account. At 31 December 2014, Indigo Ltd’s year-end, which of the following adjusting journal entries should be made? DR Unearned rent income $6000; CR Rent income $6000 Which of the following statements is true? In the income statement income and expenses are recorded net of GST.

A two year insurance policy paid for on l January can initially be recorded in an asset account Called: prepaid insurance. Which of these is not an advantage of incorporation? Less government regulation Billy’s Computer Shop purchased some new equipment trading in old equipment with a carrying amount of $10 000. Cash of $9000 was paid to the supplier and a trade-in allowance of $7000 was granted. The new equipment should be recorded at: $19 000. On 1 January 2014 Image Plus Ltd acquired electronic equipment for $18 000, net of GST. It is estimated it will have no residual value. If depreciation is provided at 10% p.a. on the diminishing-balance basis, the depreciation charge for the year ended 31 December 2016 is: $1312 On 1 July 2014 Tan Traders paid $600, representing a two-year insurance premium. The $600 was initially recorded in the insurance expense account. The correct adjusting entry on 31 December 2014, the close of the annual accounting period, is which of the following? Assume year end is 31 December. Debit prepaid insurance $300; credit insurance expense $300 Which of these is not one of the three major categories that a company’s equity can be divided into? Dividends During 2017 The Style Hairdressing Salon paid out $41 000 in wages from its bank account. At year-end 2017 wages owing but unpaid were $1600. The salon uses accrual accounting. How much would be reported as wages expense for 2017? $42 600...