exam prepare accounts for sole traders and partnerships

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Try this practice exam prepare accounts for sole traders and partnerships. This is an essential unit in the Intermediate Diploma in Accounting.

Question 1
If the Rent Account shows a credit balance  it means

  1. that rent is owing
  2. that the rent has been paid in advance  at that date
  3. that too much rent has been paid
  4. too little rent has been paid

Question 2
Capital expenditure is

  1. Expenditure incurred in travelling.
  2. Money introduced by the owner.
  3. Expenditure incurred on buying current assets.
  4. Expenditure incurred on buying non-current assets or adding value to them.

Question 3
In the business of CLK Ltd , which is a high street shop selling fashionable clothes, which of the following are capital expenditure.

  1. Fixtures for new shop
  2. wages of shop assistant
  3. new delivery van purchased
  4. Diesel fuel for the van
  1. i and ii
  2. i and iii
  3. ii and iii
  4. ii and iv

Question 4
Which of the following do not affect the agreement of the trial balance

  1. Sales of £95 to AH Ltd entered in AB Ltd’s account
  2. A cheque payment of £105 for mobile phone expenses entered only in cash book
  3. purchases of £100 from C Ltd entered in both accounts as £10
  4. Electricity account added up incorrectly being totalled £100 too much
  1. ii and iii
  2. i and iii
  3. i and iv
  4. ii and iv

Question 5
Which of these errors would be disclosed by the trial balance

  1. A cash purchase of £25 was omitted completely from the books
  2. Wages of sales staff has been debited to Sales Account
  3. Credit sales of  £500 entered in both double entry accounts as £50
  4. Cheque £89 from CS Ltd entered in CS Ltd’s account as £98

Question 6
When there is no partnership agreement then losses and profits

  1. must be divided in the same proportion as capitals
  2. must be divided equally after adjusting for interest on capital
  3. must be divided equally
  4. none of the above

Question 7

If it is required to maintain fixed capitals then the partners’ shares of profits must be

  1. Debited to capital accounts
  2. Credited to capital accounts
  3. Credited to partners’ current accounts
  4. Debited to partners’ current account