PRE-TEST 1

1. The owners of a business take inventory for her own use. What are the ledger account
entries to record this?
a) Debit drawing , credit purchases
b) Debit drawing , credit inventory
c) Debit capital, credit sales
d) Debit inventory, credit drawing.

2. In a business’s book, the ledger account of J brown, a customers, shows a debit

balance of RM 450. What does this means?
a) Brown has paid RM 450 to the business
b) Brown owes the business RM 450
c) The business has paid Brown RM 450
d) The business owes Brown RM 450

3. A suppliers account in a customer’s book, has a credit balance of RM 8,000. What

does this means?
a) The customers owes the suppliers RM 8,000
b) The customers has paid the suppliers RM 8,000
c) The suppliers has paid RM 8,000
d) The suppliers owes RM 8,000

4. Bob return goods bought on credit from Tarif. Which ledger account entries record
this in tarif’s books?
Debit Credit
a) Bob Sales returns
b) Bob Purchases returns
c) Sales return Bob
d) Purchases return Bob

5. Which ledger entries record the purchases of a machine bought on credit?

a) Debit trade payable, credit machinery
b) Debit machinery, credit trade payable
c) Debit trade payable, credit purchases
d) Debit purchases, credit trade payable

6. What is the purpose of double entry bookkeeping?

a) To apply the dual aspect concept
b) To avoid errors
 c) To prepare books of prime entry accurately
d) To record revenue and capital transaction correctly

7. The owner of a business has taken goods for personal use but not recorded this in
the books. Which journal entries must be made at the end of the year?
Debit Credit
a) Drawing Purchases
b) Drawing sales
c) Purchases Drawing
d) sales Drawing

8. How should the cash purchases of supplies be entered in the ledger?

Debit Credit
a) Cash purchases
b) Cash suppliers
c) Purchases Cash
d) suppliers Cash

9. A sole trader cash and also goods for his own use from his business. which of these
will affect his capital
a) The cash only
b) The goods only
c) Both the cash and the goods
d) Neither the cash or the goods

10.A business bought a computer for the office and paid by cheque. How will the
business record this transaction?
Debit Credit
a) Bank account Office equipment account
b) Office equipment account Bank account
c) Bank account Purchases account
d) Purchases account Bank account

11.Y’s account appears in the ledger of X as follows:

Jan 1 balance b/d 100 Jan 10 bank 100

Jan 20 sales 400 Jan 31 balance c/d 400
500 500
 Which statement is true?
a) On 1 January Y was owed RM 100 by X
b) On 10 January Y paid RM 100 into the bank
c) On 20 January Y supplied goods RM 400 to X
d) On 31 January Y was a trade receivable of X for RM 400

12.The owner of a business takes goods costing RM 6,000 from his shop for his own use.
What are the bookkeeping entries?
Debit Credit
a) Drawing account RM 6,000 Purchases account RM 6,000
b) Drawing account RM 6,000 Inventory account RM 6,000
c) Purchases account RM 6,000 Drawing account RM 6,000
d) Inventory account RM 6,000 Drawing account RM 6,000

13.Which is a personal account?

a) Trade receivable
b) Office computer
c) Plant and machinery
d) Wages

14. Which statement is correct?

a) An asset is always a credit entry
b) An expenses is always a credit entry
c) An expenses is always a debit entry
d) A liability is always a debit entry.

15. The following account appears in the ledger of Ahmed.

Sara account
2006 Debit Credit Balance
June 01 balance 100 dr
14 sales 300 400 dr
16 Bank 100 300 dr
18 sales return 25 275 dr

Which statement is true?

a) Ahmed owed sara RM 100 on 1 June 2006
b) Ahmed returned goods to sara on 18 June 2006
c) Sara owed Ahmed RM 275 on 18 June 2006
d) Sara sold goods to Ahmed on 14 June 2006
16. Which is a service business?
a) Garage selling petrol and diesel
b) Motor insurance agency
c) Second- hand car trader
d) Shop dealing in motor parts

17.The following incomplete account appears in Singh’s sales ledger.

Bashir account
2006 Debit Credit Balance
June 01 balance 800 dr
5 sales 620 ?
12 sales return 30 ?
29 bank 800 ?

What was the balance on Bashir’s account on 3o June?

a) RM 590 CREDIT
b) RM 590 DEBIT
c) RM 1010 CREDIT
d) RM 1010 DEBIT

18. The following account appeared in a trader’s ledger.

Equipment account
2013 Details Debit Credit Balance
RM RM RM
JULY 31 Balance 4,000 Dr
AUGUST 2 Bank 7,500
What was the balance on the account on 2 August/
a) RM 3,500 Credit
b) RM 3,500 Debit
c) RM 11,500 credit
d) RM 11,500 debit

19. Which of the following is not a subsidiary book of account?

a) Sales day book
b) Cash book
c) Return inward day book
d) Purchases day book
20.The sales day book is :
a) A book of prime entry in which cash are first recorded
b) A summary of sales of both goods held for sale and those acquired for use in
business.
c) A book of prime entry in which credit sales are first recorded
d) A book of prime entry for recording all sales

21. A credit note issued to a customers;

a) Reminds a customers of the offer of credit and the credit term
b) Inform the customer of the amount his account is to be credited with
c) Communication to a customers the discount he is entitled to if he pays
promptly
d) Informs the customers of the amount his account is to be debited with.

22. To reduce the workload of the bookkeeper it is usual to post the total of the
return Inward days books to:
a) The debit of the sales return account
b) The credit of the purchases return account
c) The debit of the purchases account
d) The credit of the sales account

23. The return Inwards account would be found in:

a) The purchases return ledger
b) The sales ledger
c) The nominal ledger
d) The purchases ledger

24. The accounts you would find in a Sales ledger are those of:
a) Trade Payables.
b) Income and Expenses
c) Assets
d) Trade receivable
25.Which of the following accounting entries are correct?
Debit Credit
a) Goods purchases on credit sales Cash account Sales account
b) Credit sale to Paul Pauls account Sales account
c) RM 400 paid to Peter for goods purchases on credit Peter account Cash account
d) RM 900 received from customers John for goods sold Cash account John account

a) b, c, d
b) a,b
c) c, d
d) All

26.Assuming that the total of the following prime entry books are posted at periodical
intervals to the appropriate nominal account, which of the following accounting
entries are correct?
Prime entry book Account Side
a) Purchases day book Purchases account Debit
b) Return Inward days Book Return Inward account Debit
c) Sales day book Sales account Credit
d) Return Outward day book Return outward account credit
a) B, c, d
b) C, d
c) A, b
d) All

27.Which of the following accounts will have a balance on the debit side?
a) Bank loan account
b) Capital account
c) Return Inward account
d) Sales account

28.Which of the following accounts will have a balance on the credit side?
a) Carriage Inward account
b) Motor vehicle account
c) Return outward account
d) Carriage outward account