Cat - Paper T3 : Chapter 6

10 Questions | Total Attempts: 143

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Cat Quizzes & Trivia

To test the knowledge of students regarding:- operation of control accounts- types of error in accounting- correction of errors- bank reconciliations


Questions and Answers
  • 1. 
        When preparing the payables ledger reconciliation for a client, you noted the following errors:(i) an invoice for $215 from a supplier was not entered in the accounting records(ii) an invoice for $465 was recorded as $456 in the purchase day bookWhich of the errors will cause a difference between the balance on the control account in the nominal ledger and the total of the list of balances from the personal ledger?
    • A. 

      (i) only

    • B. 

      (ii) only

    • C. 

      Both (i) and (ii)

    • D. 

      Neither (i) or (ii)

  • 2. 
         Bruce prepared the following payables ledger reconciliation statement:Balance on general ledger control account                     46,865 creditPayment entered twice in control account                         $573 credit                                                                                             $47,438 creditPurchase daybook overcast                                                 $900 debitTotal of list of balances                                                      46,538 creditHow should the payables ledger balance be reported on the balance sheet?
    • A. 

      $46,538 as a current asset

    • B. 

      $46,538 as a current liability

    • C. 

      $46,865 as a current asset

    • D. 

      $46,865 as a current liability

  • 3. 
    Which one of the following is a reason for preparing a receivables ledger reconciliation?
    • A. 

      To calculate discounts allowed

    • B. 

      To identify overdue accounts

    • C. 

      To check the calculation of gross profit

    • D. 

      To confirm the accuracy of postings

  • 4. 
        Eleanor prepared the following bank reconciliation statement: $ Balance per bank statement                12,548 (overdrawn) Outstanding cheques                            3,847                                                                16,395 Outstanding lodgements                      5,424                                                                10,971 Bank charges                                             540Balance per general ledger                      10,431 (overdrawn)
    • A. 

      $12,548

    • B. 

      $16,395

    • C. 

      $10,971

    • D. 

      $10,431

  • 5. 
       Which of the following correctly describe(s) why a bank reconciliation is prepared?   (i)   to identify entries which have been generated by the bank, but not recorded in the cash book    (ii)  to identify errors in the entries in the cash book
    • A. 

      (i) only

    • B. 

      (ii) only

    • C. 

      Both (i) and (ii)

    • D. 

      Neither (i) or (ii)

  • 6. 
             When the purchases day book was posted to the general ledger, $650 for stationery was posted to the wrong side of the stationery account.      Which of the following will correct the error on the stationery account?
    • A. 

      A debit entry of $650

    • B. 

      A debit entry of $1,300

    • C. 

      A credit entry of $650

    • D. 

      A credit entry of $1,300

  • 7. 
    1.       When Yvonne checked the entries in her cash book with her bank statement seven cheques with a total value of $3,259 had not been presented at her bank. Yvonne had instructed her bank to cancel two of these cheques but did not make any entries in her cash book. The value of the cancelled cheques is $642.      What entry should Yvonne make in the bank account in her general ledger to correct      the  balance?
    • A. 

      Debit $642

    • B. 

      Debit $2,617

    • C. 

      Credit $642

    • D. 

      Credit $2,617

  • 8. 
    1.       The closing balance on Frank’s bank account in his general ledger is $2,355 (debit).      How should the balance be reported in Frank’s final accounts?
    • A. 

      As a non-current asset

    • B. 

      As a current asset

    • C. 

      As a current liability

    • D. 

      As a non-current liability

  • 9. 
    1.       Norma’s trial balance includes a suspense account with a credit balance of $280. She has discovered that a supplier’s invoice for $140 was entered twice in the purchase day book.      What is the balance on the suspense account after the error is corrected?
    • A. 

      Nil

    • B. 

      $140 credit

    • C. 

      $280 credit

    • D. 

      $420 credit

  • 10. 
    1.       The total of the balances on the individual suppliers accounts in Arnold’s payables ledger is $81,649. The balance on the payables control account in his general ledger is $76,961. He has discovered that an invoice for $4,688 has been posted twice to the correct supplier’s account and that payments totaling $1,606 which he made by standing order have been omitted from his records.      What amount should be reported in Arnold’s balance sheet for trade payables?
    • A. 

      $72,273

    • B. 

      $75,355

    • C. 

      $76,961

    • D. 

      $81,649

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