Canadian school of arts and science
Easter term 2024
Principles of accounts paper 1 - 1hr 30 minutes
Grade 10
Name:________________________________ Date: _________________
1. Accounting is
(a) Recording anything that happens in 4. Which of the following source
a business documents should be used for making
(b) Recording the transactions of a entries in the Sales book?
business (a) A credit note received from a
(c) Recording, analyzing and supplier
interpreting the business’s (b) An invoice sent to a customer
transactions (c) A petty cash voucher for travelling
(d) Recording, summarizing, analyzing expenses paid
and interpreting the business’s (d) A debit note sent to a supplier
transactions
5. Which accounting user is correctly
2. The recording of the transactions in the matched with its need
accounting books of a business is called (a) Banker – to determine taxes to
(a) Accounting charge the business
(b) Bookkeeping (b) Government – to find out if the
(c) Liabilities business can repay a loan
(d) Resources (c) Supplier – to find out if he should
invest capital in the business
3. The purpose of preparing accounting (d) Owner – to determine the profit of
documents and financial statements is the business over the financial
to period
(i) Show information about the
resources of the business 6. The Purchases book is a book of first
(ii) Show who has claims on the entry for?
business’s resources (a) Unpaid expense item
(iii) Help users of financial (b) Fixtures bought on credit
information make decisions (c) Goods for resale bought for cash
about the business (d) Goods for resale bought on credit
(a) i and ii
(b) i and iii
(c) ii and iii
(d) i, ii and iii
7. In which of the following industries can 11. The total of goods returned by a credit
people who are trained and skilled in customer is recorded on which book?
accounting be employed? (a) Sales Day Book
(i) Banking (b) Purchases Day Book
(ii) Insurance (c) Sales Returns Day Book
(iii) Construction (d) Purchases Returns Day Book
(a) I and II 12. Which of the following ensures that
(b) I and III accountants use the same principles
(c) II and III and methods of recording from year to
(d) I, II and III year within a company?
(a) Accrual
8. Marlon Ettienne prepared the financial (b) Prudence
statement for Brown Town Hardware. (c) Consistency
He is of the view that the statements (d) Separate entity
should show more information about
the transactions that are important to 13. Which of the following states the
the owners than simply following correct order of the stages in the
accounting principles. His view is accounting cycle?
against the ethical principles of (a) Journalizing, posting to ledger, trial
accounting of balance, final accounts
(a) Integrity (b) Journalizing, trial balance, posting
(b) Objectivity to ledger, final accounts
(c) Confidentiality (c) Posting to ledgers, journalizing, trial
(d) Professional competence balance, final accounts
(d) Posting to ledgers, trial balance,
9. Gordon Corbin, of See Sea Hotel, fired journalizing, final accounts
his accountant. He then promoted his
niece, Janet Cain, the bartender, who 14. The total value of goods sent back to a
has no accounting training or supplier is recorded in which book?
experience as the accountant. Which of (a) Sales Day Book
the following does Janet lack? (b) Purchases Day Book
(a) Integrity (c) Sales Returns Day Book
(b) Objectivity (d) Purchases Returns Day Book
(c) Confidentiality
(d) Professional competence 15. In which of the following are the sole
trader’s profits and losses recorded?
10. Financial position of the business can be (a) Income statement
determined by which statement? (b) Income and expenditure account
(a) Records prepared under book- (c) Balance sheet
keeping process (d) Cashflow statement
(b) Trial balance
(c) Balance Sheet
(d) All of the above
$
Cash in hand 500 19. Which of the following would be
Accounts payable 2,500 entered in the Liabilities section of the
Bank overdraft 3,000 balance sheet.
Accounts receivable 5,000 (a) Capital, accounts payable, cash
Premises 70,000 (b) Cash, cash at bank, accounts
Cash at bank 5,000 payable
(c) Accounts payable, bank overdraft,
16. Kaleb’s capital amount is loan
(a) $75,000 (d) Capital, cash, accounts payable
(b) $80,500
(c) $81,000 20. Which group of assets below is
(d) $86,000 recorded in the “Order of Permanence”.
(a) Cash, bank, accounts receivables,
17. It is the end of Tiffany’s financial year. inventory
She had total assets of $5,000 and (b) Accounts receivables, cash, bank,
capital of $3,600. How much was her inventory
liabilities? (c) Inventory, bank, accounts
(a) $1,400 receivable, cash
(b) $3,600 (d) Inventory, accounts receivable,
(c) $5,000 bank, cash
(d) $8,600
21. The following lists of assets were found
18. What is the purpose of the Sales Day in Ashley’s Balance Sheet. If they were
Book? to be arranged in the “Order of
(a) It records all cash and credit sale Liquidity”, the sequence should be
transactions in a sequential order so (a) Building, land, cash, bank
that they may be summarized and (b) Bank, cash, building, land
the totals posted to the general (c) Cash, bank, building, land
ledger (d) Land, bank, building, cash
(b) It records all credit sale transactions
in a sequential order so that they 22. Goods were sold on credit to John
may be summarized and the totals Brown. Which of the following is the
posted to the general ledger correct double entry to record the
(c) It records all cash sale transactions transaction?
and all returns outwards transaction (a) Debit John Brown’s account
in a sequential order so that they Credit Sales account
may be summarized and the totals (b) Debit Sales account
posted to the general ledger Credit John Brown’s account
(d) It records all credit sale transactions (c) Debit John Brown’s account
and return outwards transactions in Credit Cash account
a sequential order so that they may (d) Debit Cash account
be summarized and the totals Credit John Brown’s account
posted to the general ledger
27. Which of the following items are
examples of current liabilities.
23. Horace started a business by paying
(I) Mortgages
$5,000 into a business bank account.
(II) Accounts payable
What are the accounting entries to
(III) Accrued wages
record this?
(a) Debit Capital $5,000
(a) I and II only
Credit Bank $5,000
(b) I and III
(b) Debit Bank $5,000
(c) II and III only
Credit Capital $5,000
(d) I, II and III
(c) Debit Bank $5,000
Credit Drawings $5,000
28. The cash book is BEST used for
(d) Debit Drawings $5,000
recording
Credit Bank $5,000
(a) Goods sold for cash
(b) Goods returned for cash
24. The assumption that the business life is
(c) Goods purchased for cash
indefinite, is the concept of
(d) Cash receipts and cash payments
(a) Consistency
(b) Prudence
29. The trial balance is prepared by using
(c) Going concern
balances from the
(d) Business entity
(a) Ledger
(b) Journal
25. In which book of original entry should
(c) Sales book
the business record a cheque sent to N.
(d) Purchases book
Rampersaud for goods purchased
(a) Purchases Day Book
30. A calculation to determine gross profit
(b) Sales Day Book
percentage is as follows
(c) General Journal
185,530 X 100 = 35.02%
(d) Cash Book
529,800 1
26. Which of the following BEST describes
What does the $529,800 represent?
the “Double entry” system of
(a) Total purchases
accounting.
(b) Cost of sales
(a) A ledger account must have two
(c) Total sales
sides
(d) Gross profit
(b) An account must be written twice in
the ledger 31. What does the $185,300 represents?
(c) Each transaction must be written in (a) Total sales
two subsidiary books (b) Gross profit
(d) Each transaction must have a debit (c) Cost of sales
entry and a credit entry (d) Total purchases
32. A non – trading business is MAINLY 35. In Mrs. Lowe’s ledger, an entry on the
concerned with debit side of the drawings account and
(a) Importing goods for resale an entry on the credit side of the bank
(b) Trading only with wholesalers account means that
(c) Making maximum profit for the (a) Mrs. Lowe puts money into the
proprietor business’s bank account
(d) Providing various services for its (b) The bank puts money into Mrs.
member Lowe’s personal account
(c) Mrs. Lowe withdraws money from
the bank for use in the business
(d) Mrs. Lowe uses money from her
$
Motor vehicle business’s bank account for her
Payable 2,000 personal use
Receivable 3,000
Capital 2,000 36. which of the following is a disadvantage
Building 11,000 of a computerized system?
10,000 (a) Greater speed
(b) More information available
(c) Reduction in staffing cost
(d) Risk of data loss
33. What is the TOTAL amount for assets?
(a) $12,000
37. Which of the following transactions
(b) $13,000
should be debited in the cash book?
(c) $14,000
(a) Payment received from accounts
(d) $15,000
receivable
(b) Goods sold on credit
34. Mr. Ram, a shoemaker, bought a motor
(c) Payment made for goods purchased
van for $11,000 cash. In recording this
(d) Goods bought for cash
transaction, he should
(a) Credit: cash Debit: motor
van account 38. A balance sheet serves the purpose of
(b) Debit: cash Credit: (a) showing the values of assets,
motor van account liabilities and capital
(c) Credit: cash Debit: (b) calculating the profits and losses
purchases account made
(c) showing the value of the closing
(d) Debit: cash Credit:
stock in hand
purchases account
(d) determining the available cash
balance
39. Which of the following is made up of 42. Which of the following accounting
real accounts ONLY? processes would MOST LIKELY NOT be
(a) plant, machinery, inventory, used in computerized accounting
receivables system?
(b) equipment, furniture, vehicles, plant (a) Payroll
(c) vehicle, capital, building, (b) Inventory control
prepayments (c) Receivable schedule
(d) cash, inventory, building, receivables (d) Signing of cheques
40. How would you classify land and 43. It is the end of Tiffany’s financial year.
buildings in a balance sheet? She had total assets of $5,000 and
(a) Fixed assets capital of $3,600. How much were her
(b) Current assets liabilities?
(c) Current liabilities (a) $1,400
(d) Long-term liabilities (b) $3,600
(c) $5,000
41. A business which switches its inventory (d) $8,600
valuation method regularly is violating
the accounting principle of 44. Resources owned by a business is
(a) Double entry known as?
(b) Consistency (a) Assets
(c) Business entity (b) Capital
(d) Prudence (c) Expenses
(d) Liabilities
45. Which of the following transactions
should be credited in the bank account?
(a) Paid wages by cash
(b) Received a loan from Shemuel
(c) Sold goods and received a cheque
(d) Bought goods and paid by cheque
END OF TEST
