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Fundamentals of Financial Accounting Questions 136–140 (page: 29)

CORRECT TEXT

Refer to the exhibit.



The following is an extract from the trial balance of a business for its most recent year:

Gross profit has already been calculated as being $75,000. Depreciation is to be provided at 25% on the reducing balance, and the allowance for receivables for doubtful debts is to be amended to 5% of receivables.

Using some or all of the above figures, the correct net profit is

CORRECT TEXT

A business had a balance at the bank of $1500 at the start of the month.

During the following month, it paid for materials of $1000, less trade discount of 20% and cash discount of 10%. It received a cheque from a trade receivable in respect of an invoice for $200, subject to cash discount of 5%.

The balance at the bank at the end of the month was

Give your answer to 2 decimal places.

Principles based accounting uses a conceptual basis to provide guidelines for preparing financial statements.

Which ONE of the following is an example of this approach?

For financial reporting purposes, stock should be valued at:

Refer to the Exhibit.



A company had previously written off one of their receivables that had been declared bankrupt. The administrators of the bankruptcy have now sent a cheque to the company for the full amount originally outstanding. The company now needs to record this receipt.

Which of the following is the correct double entry?