1.                   (i)         Which of the following is not a factor that may cause capital to change?

A       Additional investment

B       Profits

C       Drawings

D       Purchases

E        Losses.

(ii)               The sum of fixed assets and working capital of a business is called

A       capital owned

B       capital employed   

C       circulating capital

D       working capital

E        borrowed capital.

(iii)             The trial balance totals should agree because

A       it is extracted at the year end

B       for every debit there must be a corresponding credit

C       it is a list of balances

D       errors in balancing the ledger accounts are found out

E        it is an account.

(iv)              When John writes a cheque and sends it to James then James is 

A       drawer

B       drawee

C       payer

D       payee

E        receiver.

(v)                A credit balance of 500,000/= in the cash column of the cash book means

A       we have spent more than we have received

B       we have spent less than we have received

C       the bookkeeper has stolen 500,000/=

D       we have 500,000/= cash in hand

E        the bookkeeper has made a mistake.

(vi)              At the end of the financial year, bad debts account is closed by a transfer to the

A       profit and loss account

B       balance sheet

C       trading account

D       account of expected bad debts

E        allowance for doubtful debts account.

(vii)            Credit notes issued by a firm will be entered in its

A       purchases returns account

B       sales returns account

C       sales account

D       sales returns journal

E        purchases returns journal.

(viii)          Discounts allowed are

A       deducted by the business when it pays cash

B       deducted by the business when it receives cash

C       given by the business when it sells goods on credit

D       received by the business when it buys in bulk

E        given to those who buy larger quantities from the business.

(ix)              Which among the following is not a source document?

A       Remittance advice notes

B       Payment vouchers

C       Cash sales slip

D       Sales journal

E        Debit notes.

(x)                A cheque issued but not yet passed through the banking system is called:

A       postdated cheque

B       dishonoured cheque

C       stale cheque

D       unpresented cheque

E        uncredited cheque.