Which journal is used for correcting errors made

Which journal is used for correcting errors made1. Which journal is used for correcting errors made in the general ledger and for recording transactions that cannot be recorded in the other books of first entry?

(1) The cash receipts journal

(2) The cash payments journal

(3) The general journal

(4) The purchases journal

(5) The sales journal

2. Fast Traders uses the periodic inventory system. The following transactions were entered into by Fast Traders during September 20.16:

(a) Purchased inventory on credit from Emma Stores for R5 000.

(b) Received damaged goods returned by Henry Smith and issued a credit note for R600. The damaged goods were previously sold on credit to Henry Smith.

Which one of the following alternatives includes the correct journals in which these two above transactions will be recorded?

(1) The sales journal and the sales returns journal of Fast Traders.

(2) The purchases journal and the sales returns journal of Fast Traders.

(3) The purchases journal and the sales journal of Fast Traders.

(4) The purchases journal and the purchases returns journal of Fast Traders.

(5) The purchases returns journal and the sales returns journal of Fast Traders.

3. The source document that will be used in the preparation of a sales journal will be …

(1) a duplicate receipt.

(2) a duplicate credit note.

(3) a duplicate credit sales invoice.

(4) a cheque counterfoil.

(5) a duplicate credit purchases invoice.

The bank statement had a favourable balance of R30 000 on 28 February 20.16.

The cash receipts journal had a total of R25 500 and the cash payments journal had a total of R24 500 on 28 February 20.16, before the bank statement was received.

After a comparison of the bank statement for February 20.16 with the bank reconciliation statement as at 31 January 20.16 and the cash journals for February 20.16, the following differences were identified:

• A deposit for R12 500 appeared on 2 February 20.16 in the bank statement only.

• The following cheques appeared in the bank statement only:

– cheque no: 661 R5 000

– cheque no: 657 R3 750

• Bank charges for the month of February 20.16 amounted to R375.

• A cheque for R1 750 which was previously received from a debtor, was dishonoured due to insufficient funds in his account and therefore returned by the bank.

• A customer deposited R15 000 directly into the entity’s bank account.

The following items appeared in the cash journals only:

• A deposit on 28 February 20.16 for R16 250.

• Cheque no: 667 R2 500

670 R1 125

6. Cheque no’s 667 and 670 that appeared in the cash payments journal only will be recorded in the …

(1) cash receipts journal of Cool Traders.

(2) general journal of Cool Traders

(3) purchases journal of Cool Traders.

(4) bank reconciliation statement of Cool Traders and will be regarded as outstanding deposits.

(5) bank reconciliation statement of Cool Traders and will be regarded as outstanding cheques.

7. The accountant of Cool Traders will record the direct deposit of R15 000 in the …

(1) cash payments journal of Cool Traders.

(2) cash receipts journal of Cool Traders.

(3) general journal of Cool Traders.

(4) bank reconciliation statement of Cool Traders.

(5) sales journal of Cool Traders.

8. The bank statement balance that will be used in the bank reconciliation statement of Cool Traders as at 28 February 20.16 will be …

(1) R25 000

(2) R26 500

(3) R30 000

(4) R25 500

(5) R24 500

9. The amount of the outstanding deposit in the bank reconciliation statement of Cool Traders as at 28 February 20.16 will be …

(1) R12 500

(2) R26 500

(3) R28 750

(4) R16 250

(5) R15 000

10. Which of the following statements are correct regarding a trial balance?

(a) The trial balance is prepared from the balances and totals in the ledger accounts of the general ledger.

(b) The folio B refers to accounts that are utilised in the statement of profit or loss and other comprehensive income.

(c) The folio N refers to accounts that are closed off to final accounts.

(d) A transaction which has been completely omitted will not be disclosed by the trial balance.

(e) A trial balance is a list of debit and credit balances taken from the general ledger accounts.

(1) (a), (c), (d), (e)

(2) (a), (b), (c)

(3) (b), (c), (d), (e)

(4) (c), (d), (e)

(5) (a), (b), (c), (d), (e)

11. When goods are sold on credit, the effect will be the following:

(1) The sales account will decrease, and the debtors account will increase.

(2) The sales account will increase, and the debtors account will increase.

(3) The sales account will increase, and the creditors account will increase.

(4) The sales account will increase, and the creditors account will decrease.

(5) The sales account will decrease, and the debtors account will decrease.

12. The following are examples of errors that will not be revealed by a trial balance:

(a) errors of omission

(b) incorrect total on trial balance

(c) posting to the wrong account

(d) compensating errors

(e) The balance of a general ledger account has been incorrectly calculated.

Which one of the following groups correctly reflects all the statements that are true?

(1) (a), (c), (e)

(2) (b), (d), (e)

(3) (a), (c), (d)

(4) (b), (c), (d)

(5) (a), (b), (c)

13. On 1 August 20.16, ABC Traders purchased goods to the value of R30 000 and paid with a business cheque. The entity makes use of the periodic inventory system.

The following entries will be made in the general ledger:

(1) The inventory account will be debited, and the bank account will be credited.

(2) The purchases account will be debited, and the bank account will be credited.

(3) The inventory account will be debited, and the creditors control account will be credited.

(4) The purchases account will be debited, and the creditors control account will be credited.

(5) The purchases account will be debited, and the inventory account will be credited.

14. The perpetual inventory control system determines the cost of sales of goods at the time of sale.

When merchandise is sold for cash, the following accounts will be affected (excluding sales and bank account):

(1) Debit cost of sales; credit inventory.

(2) Credit cost of sales; debit inventory.

(3) Credit cost of sales; debit purchases.

(4) Debit cost of sales; credit purchases.

(5) Credit inventory; debit purchases.

15. Cheap Plumbing Services sold goods on credit to a customer for R3 990 (inclusive of 14% VAT). The perpetual inventory system is in use, and all goods are sold at a constant mark-up of 20% on cost. What is the selling price, excluding VAT, and cost of sales amount? Selling price excluding VAT

Cost of sales

(1)

R3 500,00

R700,00

(2)

R3 990,00

R3 325,00

(3)

R3 500,00

R2 916,67

(4)

R2 915,40

R3 325,00

(5)

R3 500,00

R2 800,00

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