ACCTG 102 Accounting Concepts Mid-semester Practice Test #1

Hello, dear friend, you can consult us at any time if you have any questions, add WeChat: daixieit

PRACTICE TEST NUMBER-1 QUESTION SET

ACCTG 102

Accounting Concepts

Mid-semester Practice Test #1

1 Practice Test 01 Question 01

Question 01 (1 mark):

The accounting process includes which steps:

Select the one correct answer:

identifying, measuring, recording and communicating.

measuring, adjusting, recording and communicating.

identifying, recording, communicating and justifying.

measuring, evaluating, recording and communicating.

2 Practice Test 01 Question 02

Question 02 (1 mark):

When a service has been performed but no cash has been received, which of the following statements is true?

Select the one correct answer:

The entry includes a debit to Accounts receivable.

The entry includes a debit to Accounts payable.

The entry includes a credit to Unearned revenue.

No journal entry is made.

3 Practice Test 01 Question 03

Question 03 (1 mark):

The balance in the Prepaid rent account before adjustment at the end of the year is $12,000Dr and represents three months’ rent paid on 1 December. The adjusting entry required on 31 December is:

Select the one correct answer:

Debit Rent expense, $4,000; Credit Prepaid rent, $4,000.

Debit Prepaid rent, $8,000; Credit Rent expense, $8,000.

Debit Rent expense, $12,000; Credit Prepaid rent, $12,000.

Debit Prepaid rent, $4,000; Credit Rent expense $4,000.

4 Practice Test 01 Question 04

Question 04 (1 mark):

Under the perpetual inventory system what is the correct entry for the credit purchase of 5 washing machines at $300 per washing machine plus GST of $30 each (assuming GST rate of 10%)?

Select the one correct answer:

Debit Accounts payable $1,650; Credit Inventory $1,500, Credit GST $150.

Debit Inventory $1,650; Credit Accounts payable $1,650.

Debit Inventory $1,500, Debit GST $150; Credit Accounts payable $1,650.

Debit Inventory $1,650; Credit Accounts payable $1,500, Credit GST $150.

5 Practice Test 01 Question 05

Question 05 (1 mark):

A company purchased inventory as follows:

200 units at $9

300 units at $10

The average unit cost for inventory is:

Select the one correct answer:

$9.50.

$9.00.

$9.60.

$10.00.

6 Practice Test 01 Question 06

Question 06 (4 marks):

Required:

Explain the four steps in the accounting process.

7 Practice Test 01 Question 07

Question 07 (9 marks)

Journalise the following business transactions in general journal form. Identify each transaction by number reference (Ref.). You may omit narrations for the transactions and assume GST is not applicable.

Ref.

1. Shareholders invest $35,000 in cash in starting a real estate office operating as a company.

2. Purchased $400 of office supplies on credit.

3. Purchased office equipment for $6,000, paying $2,500 in cash and the remainder on credit.

4. Real estate commissions revenue invoiced to clients amount to $4,000.

5. Paid $700 in cash for the current month's rent.

6. Paid $200 cash on account for office supplies purchased in transaction 2.

7. Received an account for $500 for advertising for the current month.

8. Paid $2,200 cash for office salaries.

9. Paid $1,200 cash dividends to shareholders.

10. Received a cheque for $3,000 from a client in payment on account for commissions invoiced in transaction 4.

Fill in your answer in the boxes provided. Not all boxes need to be completed.

Ref.    Account Debited           Account Credited              Debit $ Credit $

8 Practice Test 01 Question 08

Question 08 (6 marks)

The National Koala Park operates a tourist attraction in Pennant Hills. The entity adjusts its accounts at the end of each month (ignore GST). The selected accounts appearing below reflect balances after adjusting entries were prepared on 30 April. The adjusted trial balance shows the following:

Prepaid rent $ 8,000Dr

Fencing 30,000Dr

Accumulated depreciation — fencing 5,500Cr

Ticket revenue received in advance 500Cr

Other data:

Ref-1. Three months’ rent had been prepaid on 1 April.

Ref-2. The fencing is being depreciated at $6,000 per year.

Ref-3. The revenue received in advance represents tickets sold for future park visits. The tickets were sold at $4.00 each on 1 April. During April, 25 of the tickets were used by customers.

Required:

(a) Calculate the following (show all workings):

(i) Monthly rent expense.

(ii) The age of the fencing in months.

(iii) The number of tickets sold on 1 April.

a(i): Monthly rent expense

a(ii): The age of the fencing in months

a(iii): The number of tickets sold on 1 April

(b) Prepare the adjusting entries that were made by the National Koala Park on 30 April. Fill in your answer in the boxes provided. Not all boxes need to be completed.

Ref. Account Debited               Account Credited             Debit $             Credit $

9 Practice Test 01 Question 09

Question 09 (10 marks)

Metal Music Limited is a retail store specialising in musical instruments and consumables for rock and metal musicians. At the beginning of February 2023, the ledger of Metal Music Limited showed Cash $2,500Dr; Inventory $1,700Dr; and Share capital $4,200Cr. The following transactions were completed during February 2023 (assume a perpetual inventory system):

DATE REF:

Feb. 6 Purchased electric guitars from Guitars R Us on credit, $840, terms 3/7, n/30.

7 Paid freight on Guitars R Us purchase $40.

8 Sold inventory to customers $900, terms n/30. The inventory cost $600.

10 Received credit of $84 from Guitars R Us for a guitar that was returned.

11 Purchased guitar strings from Strings N Things for cash $300.

13 Paid Guitars R Us in full.

14 Purchased Guitar straps and leads from Musical Importers Limited on credit $500, terms 2/7, n/60.

15 Received cash refund of $50 from Strings N Things for damaged inventory that was returned.

17 Paid freight on Musical Importers Limited purchase $30.

18 Sold inventory to customers $900, terms n/30. The cost of the inventory was $530.

20 Received $500 in cash from customers in settlement of their accounts.

21 Paid Musical Importers Limited in full.

27 Granted an allowance of $30 to a customer for a guitar strap that was faulty.

28 Received cash payments on account from customers $500.

The chart of accounts for Metal Music Limited includes Cash, Accounts receivable, Inventory, Freight-In, Accounts payable, Share capital, Sales, Sales returns and allowances, and Cost of sales.

Required:

Journalise the February 2023 transactions (ignore GST and narrations). Fill in your answer in the boxes provided. Not all boxes need to be completed.

Ref.    Account Debited               Account Credited                Debit $                Credit $

10 Practice Test 01 Question 10

Question 10 (10 marks)

Decorative Limited sells all kinds of Christmas decorations. The entity’s accountant, John Smith, was preparing the information needed to account for the GST and report to the taxation authority for the quarter ending 31 December 2022, when he had to suddenly take annual leave for family reasons. You have been hired to take over John’s role until he returns. Before John left, he prepared the following information for the quarter:

Total sales (including GST) $141,400

Total sales returns (including GST) 2,800

Total purchases (including GST) 57,120

Purchase returns (including GST) 6,720

Required:

(a) Journalise the sales and purchases transactions, as well as payment of GST to the taxation authority, using the GST paid and GST collected accounts (assume GST rate of 10%).

(b) Assuming the total net sales for the quarter were $57,120 (including GST) and the total net purchases were $141,400 (including GST), journalise the sales and purchases transactions, as well as the refund from the taxation authority, using the GST paid and GST collected accounts

(Note: Purchase and Sales Returns are not applicable).

Fill in your answer in the boxes provided for Q10(a) and Q10(b) below. Not all boxes need to be completed:

Q10(a):       Account Debited                Account Credited              Debit $             Credit $

Q10(b):       Account Debited                Account Credited              Debit $             Credit $

11 Practice Test 01 Question 11

Question 11 (6 marks)

Dawson Limited sells many products. Locket is one of its popular items. Below is an analysis of the inventory purchases and sales of Locket for the month of March.

Dawson Limited uses the periodic inventory system.

Purchases Sales

Units Unit cost Units Sale Price/unit

1/3 Beginning inventory 100 $60

3/3 Purchase 60 $75

4/3 Sales 70 $120

10/3 Purchase 200 $82

16/3 Sales 80 $130

19/3 Sales 80 $130

25/3 Sales 50 $130

30/3 Purchase 40 $90

(a) Using the FIFO assumption, calculate the amount charged to cost of sales for March. (Show computations.)

(b) Using the average method, calculate the amount assigned to the inventory on hand on 31 March. (Show computations.)

(c) Using the LIFO assumption, calculate the amount assigned to the inventory on hand on 31 March. (Show computations.)