A wholesale flower supplier had the following transactions.
Sold goods, $18 000, on credit
Received cheque, $9000, from sale of vehicle at book value
How would these amounts be classified?
revenue receipt $ | capital receipt $ | |
|---|---|---|
A | nil | 27 000 |
B | 9 000 | 18 000 |
C | 18 000 | 9 000 |
D | 27 000 | nil |
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George, a farmer, sold a piece of his land at its market value.
How should he treat the proceeds of this sale?
as a capital receipt
as a revenue receipt
as capital expenditure
as revenue expenditure
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The payments shown below were made when a business purchased a new machine.
$ | |
cost of the machine | 24 000 |
charge for delivery of the machine | 800 |
insurance for the machine | 1 500 |
wages of employees installing the machine | 1 100 |
How much was the capital expenditure?
$24 000
$25 100
$25 900
$27 400
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Leonardo's expenditure during the year included the following amounts.
$ | |
purchase of equipment | 9 000 |
employee training | 5 000 |
redecorating premises | 3 000 |
How much should Leonardo charge to his income statement for the year?
$8 000
$9 000
$14 000
$17 000
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The cost of repairing machinery was debited to a business's machinery account.
How did this error affect the financial statements?
profit for the year | non-current assets | |
|---|---|---|
A | understated | understated |
B | understated | overstated |
C | overstated | understated |
D | overstated | overstated |
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After his financial statements had been prepared, a trader discovered the following errors.
A capital receipt of $2 000 had been recorded as a revenue receipt
Revenue expenditure of $700 had been recorded as capital expenditure
A revenue receipt of $1 800 had been recorded as a capital receipt
What was the overall effect of these errors on the profit for the year?
overstated by $500
overstated by $900
understated by $500
understated by $900
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