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Fundamentals of Financial Accounting Questions 176–180 (page: 37)

Updated On: 9-Feb-2026

Accountant P debited wages with $1,000 instead of $1,500, but credited sales with $1,500 instead of $2,000.

Which of the following kind of bookkeeping mistakes is this?

  1. Error of original entry
  2. Compensation of errors
  3. Reversal of entries
  4. Error of principle

Answer(s): B



Company H receives a 10% discount on its order from supplier GD. Which ONE of the following does the discounted amount count as for Company H?

  1. Revenue
  2. Profit
  3. Income
  4. Capital

Answer(s): A



CORRECT TEXT

At the beginning of the year, a club's Membership Subscriptions account showed a debit balance of $500 and a credit balance of $225. During the following year, subscriptions
received amounted to $12000.

At the end of the year, subscriptions paid in advance amounted to $200, and subscriptions in arrears, and expected to be collected, amounted to $150.

The amount to be transferred to the income and expenditure account for the year is

  1. See Explanation section for answer.

Answer(s): A

Explanation:

CORRECT TEXT IS: $11677



A business has come to you for advice. There are about to start trading and want to ensure that they keep appropriate accounting records that will grow with their business, save time and produce useful information. They have already established books of prime entry.

Which of the following would you also suggest they use?

  1. Accounting codes
  2. Same staff for all books of prime entry
  3. Letterhead stationary
  4. Cash transactions only

Answer(s): A



Refer to the Exhibit.



A company operates a FIFO system of inventory valuation. Opening inventory at the beginning of the period was 200 units @ $2.80 each. During the period the following movements of inventory were recorded.

The value of the closing inventory at the end of the period and amount charged to the income statement were:

  1. Closing inventory $360.00 Income statement $2255.00
  2. Closing inventory $360.00 Income statement $1895.00
  3. Closing inventory $357.50 Income statement $1897.50
  4. Closing inventory $360.00 Income statement $1695.00

Answer(s): C



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