4 questions. Try each one, then open the answer to check yourself and read the explanation.
One major advantage of a ledger is that it
Answer: C (can be used by any type of business)
Every kind of business, big or small, can keep its accounts in a ledger. A ledger is not a book of original entry.
Capital ₦2 000
Bank ₦1 200
Purchases ₦2 500
Sales ₦6 700
Stock ₦1 300
Creditors ₦1 000
Fixed assets ₦3 700
Drawings ?
Drawings are always estimated at 50% of capital
The trial balance total is
Answer: B (₦9 700)
Drawings = 50% × 2,000 = ₦1,000. Debits: 1,200 + 2,500 + 1,300 + 3,700 + 1,000 = ₦9,700. Credits: 2,000 + 6,700 + 1,000 = ₦9,700.
Capital ₦2 000
Bank ₦1 200
Purchases ₦2 500
Sales ₦6 700
Stock ₦1 300
Creditors ₦1 000
Fixed assets ₦3 700
Drawings ?
Drawings are always estimated at 50% of capital
Compute the amount withdrawn
Answer: A (₦1 000)
Drawings are 50% of capital: 50% × ₦2,000 = ₦1,000.
A major cause of discrepancy between bank statement and the cash book that overstates the bank statement balance is the
Answer: A (direct payment)
A direct payment into the account by a customer is credited by the bank before the business records it, so the bank statement shows more.