Final Accounts of a Sole Trader
Accounts · 50 practice questions
The income statement (trading and profit and loss account); the statement of financial position (balance sheet); adjustments — provision for bad and doubtful debts, provision for discounts, provision for depreciation (straight-line and reducing balance methods), accruals and prepayments.
- Determine the cost of sales, gross profit and net profit of a sole trader.
- Identify non-current assets, current assets, long-term liabilities, current liabilities and proprietor's capital.
- Compute adjustable items in the statement of profit or loss.
- Differentiate between bad debts and provision for bad and doubtful debts.
Try a few questions
- Practice question 1
A vertical format statement of financial position specifically presents assets, liabilities, and capital in
- A.no particular order of any kind, despite being formally presented
- B.two side-by-side columns exclusively, rather than any single continuous list
- C.a single, continuous list rather than in two side-by-side columns
- D.a factor entirely unrelated to a single, continuous list of any kind
Show the answer
C. a single, continuous list rather than in two side-by-side columns
A vertical format statement of financial position specifically presents items in a single, continuous list rather than two side-by-side columns.
- Practice question 2
Prepaid expenses, an adjustment in final accounts, specifically refer to expenses
- A.that have, in fact, already been fully consumed within the current period
- B.paid in advance of the period to which they relate
- C.incurred during the period but not yet paid at all
- D.a factor entirely unrelated to expenses paid in advance of any period
Show the answer
B. paid in advance of the period to which they relate
Prepaid expenses specifically refer to expenses paid in advance of the period to which they relate.
- Practice question 3
Revenue expenditure, unlike capital expenditure, specifically is incurred for the day-to-day running of a business and is charged entirely to
- A.a factor entirely unrelated to the current period of any kind
- B.several future periods, rather than the current period alone
- C.the current period
- D.no particular period of any kind, despite being incurred for day-to-day running
Show the answer
C. the current period
Revenue expenditure, unlike capital expenditure, specifically is charged entirely to the current period.
More UTME Accounts topics
- Nature and Significance of Bookkeeping and Accounting
- Principles of Double Entry
- Ethics in Accounting
- Cash Book
- Bank Transactions and Reconciliation Statements
- Stock Valuation
- Control Accounts and Self-Balancing Ledgers
- Incomplete Records and Single Entry
- Manufacturing Accounts
- Accounts of Not-For-Profit-Making Organizations
- Departmental Accounts
- Branch Accounts
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