Sample multiple choice questions

1)

Which of the following statements is not a general characteristic of year-end

published accounts?
a. The financial information they contain is the bare minimum required
by the companies act
b. They are laid out in a way to enable management to extract valuable
information to assist in the running of the company.
c. They are aimed at informing external stakeholders on the companys
performance and position
d. They are as much an exercise in PR and investor relations as they are
one of information dissemination

2)

Liesurenet accounted for 5-year gym membership by recognising 75% of the

total fee as income in the first year. Which accounting concepts did it violate?
a. Prudence and Matching.
b. Consistency and Going Concern
c. Historical Cost and Prudence
d. Matching and Consistency

3)

Smith and Sithole have a partnership and are 60:40 partners. Smith creates a
liability in the business for R100,000 and then disappears. Sithole is liable for
how much of the debt:
a. R40,000
b. R60,000
c. R50,000
d. R100,000.

4)

What amount would you put into Cost of Sales in the income statement given
the following:
Sales
120,000
Telephone
1,200
Marketing
2,300
Opening stock
3,000
Stock purchases
20,000
Consumables purchase 10,000
Closing stock
5,000
a.
b.
c.
d.

19,200
31,500
30,000
18,000.

5)

The balance sheet shows the following:

a. The profit for the year
b. The financial situation for the year
c. The financial situation on that day only.
d. The sales made

6)

A company issued 50 000 new R1 shares at the current market price of R3.60.
If their share premium account was 27 500 before, what would it be after the
new issue?
a. 77 500
b. 157 500.
c. 130 000
d. 207 500

7) If Stock levels went up in direct proportion to Cost of Sales, calculate the figure
missing from this table
Year 1
Year 2
Cost of Sales
467 000
524 500
Stock
40 162
?
a.
b.
c.
d.

64 580
44 565
42 319
45 107.

8) The balance sheet of ABC Ltd showed retained earnings at the end of December
2000 as 121 810. During the year ended 31st December 2001 they recorded an
after tax profit of 51 400 and paid out 35% of that as a dividend. What would the
retained profit figure be on the December 2001 balance sheet?
a. 173 210
b. 139 800
c. 155 220.
d. 161 730
9) XYZ Ltd sells two products. Sales for product X were 39 870 and cost of sales
came to 70% of sales. Sales for Product B were 56 700 and cost of sales on this
product amounted to 28 100. Calculate the overall gross profit % for XYZ Ltd.
a. 49.6%
b. 42.0%.
c. 30.0%
d. 58.0%
10) Use the following information to calculate the balance sheet figure for Stock. Net
Current Assets comes to 16 400, Current Liabilities were 14 800, Debtors totalled
19 400 and Cash on hand was 2 900.
a. 7 300
b. 16 500
c. 31 200
d. 8 900.
11) ABC Ltd had sales for the year of 324 600, If their FIXED ASSET TURNOVER
RATE stood at 48.2 what figure would you expect to find under FIXED
ASSETS on their balance sheet? (to the nearest whole rand).
a. 65 400
b. 34 292
c. 6 734.
d. 42 865