11 mark
What is not a service business?
an accounting firm
a taxi driver
a cleaning business
a grocery store
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Financial Statements for Sole Traders (Cambridge (CIE) IGCSE Accounting)
Exam Questions
15 mins15 questions21 mark
Which statements about a statement of financial position are correct?
It shows the assets and liabilities on a certain date.
It shows the income and expenses for a certain period of time.
It must be prepared before the income statement.
It is not part of the double entry system.
1 only
1 and 4 only
2 and 3
1, 3 and 4
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31 mark
Which statement will show the operating costs for the year?
income statement
statement of financial position
bank reconciliation statement
statement of changes in equity
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41 mark
Which group contains only trading businesses?
accounting firm, taxi firm, hair salon
grocery store, hardware store, book shop
grocery store, taxi firm, book shop
accounting firm, hardware store, hair salon
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51 mark
What does the income statement of a business show?
calculation of the profit or loss for a period of time
assets and liabilities at a certain date
the capital receipts and capital expenditure for a period of time
the changes in the equity structure over a period of time
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61 mark
Which items would appear in the income statement of a service business?
gross profit | profit for the year | |
|---|---|---|
A | ✘ | ✘ |
B | ✓ | ✘ |
C | ✘ | ✓ |
D | ✓ | ✓ |
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71 mark
Which of the following gives the cost of sales?
opening inventory + purchases + carriage inwards - closing inventory
opening inventory + purchases - carriage inwards - closing inventory
purchases - opening inventory + carriage inwards + closing inventory
purchases - opening inventory - carriage inwards + closing inventory
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11 mark
Which group does not contain an intangible asset?
vehicles, bank balance, goodwill
brand names, trade payables, inventory
trade receivables, trademarks, bank overdraft
bank loan, cash in hand, machinery
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21 mark
At the end of the financial year, Khloe decided to decrease her provision for doubtful debts.
How will this affect her income statement and the statement of financial position?
income statement | statement of financial position | |
|---|---|---|
A | increase profit for the year | increase current assets |
B | increase profit for the year | decrease current assets |
C | decrease profit for the year | increase current assets |
D | decrease profit for the year | decrease current assets |
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31 mark
Jamelia runs a service business. She provided the following information at the end of the year.
$ | |
equipment | 20 000 |
trade receivables | 600 |
trade payables | 900 |
capital | 18 000 |
What was the bank balance in Jamelia's cash book at the end of the year?
$1 700 debit
$1 700 credit
$3 500 debit
$3 500 debit
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41 mark
Amy started a taxi business. She provided the following information at the end of her first financial year.
$ | |
fees receivable from customers | 17 500 |
motor expenses | 5 300 |
vehicles | 20 000 |
drawings | 3 000 |
bank | 2 700 |
Amy bought her vehicle at the start of the year. Amy depreciates motor vehicles at 20% per annum using the reducing balance method. Amy charges depreciation in the year of purchase.
What was her profit or loss for the year?
$7 900 profit
$8 200 profit
$12 200 profit
$11 800 loss
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51 mark
A trader provided the following information for his financial year.
$ | |
total purchases | 30 540 |
carriage inwards | 895 |
purchases returns | 2 075 |
goods taken for own use | 3 560 |
What was the net figure for purchases in the income statement?
$24 905
$25 800
$28 465
$29 360
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11 mark
Naomi is a sole trader. On her financial statements, the profit for the year was $15 000 and her capital at the end of the year was $30 000.
During the year, Naomi took $1 000 worth of goods for her own use and forgot to make entries in the accounts.
What is the revised profit for the year and capital after the relevant entries were made.
profit for the year | capital | |
|---|---|---|
A | $14 000 | $29 000 |
B | $14 000 | $30 000 |
C | $16 000 | $30 000 |
D | $16 000 | $31 000 |
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21 mark
Karina calculated her profit for the year at $18 400. The following errors were then discovered.
No entry had been made for $500 rent accrued.
The electricity expense included a prepayment of $150.
What is the correct profit for the year?
$17 750
$18 050
$18 750
$19 050
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31 mark
After the preparation of his income statement, Ruben discovered the following errors.
A debt, $800, should have been written off as irrecoverable.
No adjustment had been made for rent, $2 500, that was not yet received from a tenant Naomi.
The draft profit for the year was $41 600.
What was the corrected profit for the year?
$38 300
$39 900
$43 300
$44 900
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