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Chapter 2 - Balance Sheets Test
This document contains a 25 question multiple choice test on balance sheets for a VCE Accounting unit. The test covers topics such as identifying current and non-current assets and liabilities, calculating values from balance sheet information, and making correct journal entries for various business transactions that impact the balance sheet. For each question there are 4 possible answer choices labeled a-d. The document also provides context and explanations for some of the questions.
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Chapter 2 - Balance Sheets Test
- 1. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 1 Chapter 2 Test – Balance Sheets Name ___________________________________________ 1. (a) (b) (c) (d) 2. (a) (b) (c) (d) 3. (a) (b) (c) (d) 4. (a) (b) (c) (d) 5. (a) (b) (c) (d) 6. (a) (b) (c) (d) 7. (a) (b) (c) (d) 8. (a) (b) (c) (d) 9. (a) (b) (c) (d) 10. (a) (b) (c) (d) 11. (a) (b) (c) (d) 12. (a) (b) (c) (d) 13. (a) (b) (c) (d) 14. (a) (b) (c) (d) 15. (a) (b) (c) (d) 16. (a) (b) (c) (d) 17. (a) (b) (c) (d) 18. (a) (b) (c) (d) 19. (a) (b) (c) (d) 20. (a) (b) (c) (d) 21. (a) (b) (c) (d) 22. (a) (b) (c) (d) 23. (a) (b) (c) (d) 24. (a) (b) (c) (d) 25. (a) (b) (c) (d) Total /25 marks
- 2. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 2 Chapter 2 Test – Balance Sheets 1. Which of the following items is NOT a Current Asset? a) Cash on hand b)Cash at bank c) Bank overdraft d) Debtors 2. Which of the following items is a Non‐Current Asset? a) Premises b) Furniture c) Vehicles d) All of the above 3. Which of the following items is NOT a Current Liability? a) Bank overdraft b) GST refund due from Tax Office c) Amounts owing to suppliers d) Wages owing to employees Mark Flamenco is the owner of a business with the following items: Stock $62,000; Creditors $3,400; Loan (due in 2020) $30,000; Owner’s personal vehicle $11,000; Shop fittings $12,000; Cash at bank $5,900; Debtors $8,600; Office equipment $4,100; GST liability $800; Premises $135,000; Stationary $100. 4. The value of the firm’s Current Assets is: a) $227,700 b) $76,500 c) $87,600 d) $76,600 5. The value of the firm’s Capital is: a) $193,500 b) $227,700 c) $238,000 d) $261,900
- 3. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 3 The following information has been supplied by Katia Maxwell at the end of 2015, the owner of a business selling electrical appliances. Cash on hand $250; Bank overdraft $1,000; Premises $150,000; Loan (due June 2016) $1,700; Creditor – Sharp Tools $5,200; Stock $41,150; Personal home loan $90,000; Loan (due 2020) $21,000; Debtor ‐ ElecWorld $1,700; Office furniture $2,800; Vehicles $13,200; Mortgage loan (due 2023) $110,000; Debtor – Bidale Trade $850; GST liability $800. 6. The Assets of the firm are: a) $209,950 b)$166,000 c) $256,000 d) $299,950 7. The Current Assets of the firm are: a) $42,250 b) $43,950 c) $43,590 d) $44,750 8. The firm’s Capital is: a) $70,250 b) $160,250 c) $68,550 d) $139,700 9. The effect of Revenue on Owner’s Equity is: a) Revenue has no effect on Owner’s Equity b) Revenue decreases Owner’s Equity c) Revenue increases Owner’s Equity but only when Liabilities decrease d) Revenue increases Owner’s Equity 10. A firm collected $1,900 in GST on cash sales during the current period and paid $1,650 in GST to its suppliers. The firm’s GST balance is: a) GST refund of $250 b) GST refund of $1,650 c) GST liability of $250 d) GST liability of $1,650
- 4. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 4 11. A firm bought shop fittings for $7,000 plus $700 GST on credit. The worksheet entry for this transaction will be: a) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐7700 +7000 ‐700 b) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +7000 ‐700 +7700 c) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +7000 +7000 d) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +7000 +700 +7000
- 5. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 5 12. A firm purchased stock for $800 plus GST for cash. It plans to sell the stock for $1,600 plus $160 GST. The worksheet entry for this transaction will be: a) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐880 +800 ‐80 +1760 +160 +1600 b) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐800 +880 +80 c) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐880 +800 ‐80 d) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐880 +800 ‐80 +1600 ‐160 +1760
- 6. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 6 13. A firm paid wages of $700. The worksheet entry for this transaction will be: a) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐770 ‐70 ‐700 b) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +700 ‐700 c) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐700 ‐700 d) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐700 +700
- 7. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 7 14. A firm sold goods on credit for $2,200 plus GST (cost price $1,000). The worksheet entry for this transaction will be: a) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +2420 +220 +2200 ‐1000 ‐1000 b) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +2200 +200 +2000 ‐1000 ‐1000 c) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +2200 +200 +2000 ‐1000 ‐1000 d) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +2420 +220 +2200 ‐1000 ‐1000
- 8. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 8 15. A firm received $550 from a customer who had purchased goods on credit last month. The worksheet entry for this transaction will be: a) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +550 +550 b) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +550 +50 +500 c) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐550 +50 +500 d) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +550 ‐550
- 9. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 9 16. The owner of a firm withdrew $300 for personal use. The worksheet entry for this transaction will be: a) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐300 +300 b) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐300 ‐300 c) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐300 ‐300 d) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐330 ‐30 ‐300
- 10. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 10 17. A firm paid its advertising for this month for the amount of $440 including $40 GST. The worksheet entry for this transaction will be: a) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐440 ‐40 ‐400 b) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐480 ‐40 ‐440 c) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐400 +40 ‐440 d) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐40 +440 ‐400
- 11. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 11 18. A firm sold stock for cash for $1800 plus $180 GST. The stock originally cost the firm $800. The worksheet entry for this transaction will be: a) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +1980 +180 +1800 ‐880 ‐880 b) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +1980 +180 +1800 ‐800 ‐800 c) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +1980 +180 +1800 ‐800 ‐800 d) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital +1980 +180 +1800 ‐800 +800
- 12. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 12 19. A firm purchased a vehicle for $10,000 plus GST of $1,000 paying $4,000 cash with the balance to be paid within the next 60 days. The worksheet entry for this transaction will be: a) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐4400 +10000 ‐1000 +6600 b) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐4000 +11000 ‐1000 ‐6000 c) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐11000 +10000 ‐1000 d) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐4000 +10000 ‐1000 +7000
- 13. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 13 20. A firm repaid a supplier $1,200 off its account for stock purchased on credit earlier in the year. The worksheet entry for this transaction will be: a) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐1200 ‐100 ‐1100 b) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐1200 ‐1200 c) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐1200 ‐1200 d) Assets Liabilities Owner’s Equity Cash at bank Stock Debtors Vehicle Shop fittings GST liability Creditors Capital ‐1320 ‐120 ‐1200
- 14. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 14 The Balance Sheet below was prepared by a small business. Balance Sheet as at 30 June 2015 $ $ $ $ Current Assets Current Liabilities Cash at bank 12000 GST liability 2000 Debtors 17000 Creditors 14000 Stock 41000 70000 Loan – NAB 6000 22000 Non‐Current Liabilities Loan – NAB 54000 Non‐Current Assets Mortgage 90000 144000 Vehicles 50000 Owner’s Equity Premises 100000 150000 Capital 54000 TOTAL ASSETS 220000 TOTAL ASSETS 220000 21. The time remaining on the loan from NAB is: a) 1 year b) 9 years c) 10 years d) 8 years 22. After preparing the Balance Sheet, the owner realised that a $3,000 payment to creditors had not been entered into the firm’s records. The corrected balances of cash at bank, creditors and GST liability will be: Cash at bank GST liability Creditors a) $9,000 $2,000 $11,000 b) $15,000 $2,000 $17,000 c) $8,700 $2,300 $10,700 d) $9,000 $1,700 $11,000 23. The premises was purchased in 1996 for $100,000. The firm believes the current market value of the property is $250,000. An offer to buy the premises for $270,000 has been received by the business from a potential buyer. Based on the Balance Sheet shown above, the premises have been valued according to which accounting principle? a) Reliability b) Reporting period c) Entity d) Historical cost
- 15. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 2 – BALANCE SHEETS © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 15 The Balance Sheet below was prepared by a small business. Balance Sheet as at 30 June 2015 $ $ $ $ Current Assets Current Liabilities GST refund 1000 Bank overdraft 2000 Debtors 10000 Creditors 9000 11000 Stock 25000 36000 Non‐Current Liabilities Loan – ANZ 5000 Non‐Current Assets Mortgage 40000 45000 Shop fittings 20000 Owner’s Equity Equipment 54000 74000 Capital 54000 TOTAL ASSETS 110000 TOTAL ASSETS 110000 24. After preparing the Balance Sheet, the owner realised that a $7,000 payment for wages had been incorrectly entered into the firm’s records twice. The corrected balances of each section of the Balance Sheet will be: Current Assets Non‐Current Assets Current Liabilities Non‐Current Liabilities Owner’s Equity a) $43,000 $74,000 $11,000 $45,000 $61,000 b) $41,000 $74,000 $9,000 $45,000 $61,000 c) $29,000 $74,000 $11,000 $45,000 $47,000 d) $36,000 $74,000 $18,000 $45,000 $47,000 25. During July 2015 the firm paid $1,400 in GST and collected $3,700. At 31 July 2015 the firm will have a: a) GST refund of $2,300 b) GST liability of $1,300 c) GST refund of $3,300 d) GST liability of $2,300