BÀI TẬP ERROR

1. A business statement of profit or loss and other comprehensive income for the year ended 31 December
20X4 showed a net profit of $83,600. It was later found that $18,000 paid for the purchase of a motor van
had been debited to motor expenses account. It is the company's policy to depreciate motor vans at 25
per cent per year, with a full year's charge in the year of acquisition.
What would the net profit be after adjusting for this error?
A $106,100
B $70,100
C $97,100
D $101,600

2. The accountant at Investotech discovered the following errors after calculating the company's profit for
20X3:
(a) A non-current asset costing $50,000 has been included in the purchases account
(b) Stationery costing $10,000 has been included as closing inventory of raw materials, instead of
stationery expenses
What is the effect of these errors on gross profit and net profit?
A Understatement of gross profit by $40,000 and understatement of net profit by $30,000
B Understatement of both gross profit and net profit by $40,000
C Understatement of gross profit by $60,000 and understatement of net profit by $50,000
D Overstatement of both gross profit and net profit by $60,000

3. The following are balances on the accounts of Luigi, a sole trader, as at the end of the current financial
year and after all entries have been processed and the profit for the year has been calculated.
$
Non-current assets 85,000
Receivables 7,000
Trade payables 3,000
Bank loan 15,000
Allowance for depreciation, non-current assets 15,000
Inventory 4,000
Accruals 1,000
Prepayments 2,000
Bank overdraft 2,000
What is the balance on Luigi’s capital account?
A A $59,000
B B $66,000
C C $62,000
D $64,000 (2 marks)
4. Beta Co has total assets of $650,000 and profit for the year of $150,000 recorded in the financial
statements for the year ended 31 December 20X3. Inventory costing $50,000, with a resale value of
$75,000, was received into the warehouse on 2 January 20X4 and included in the inventory value that
was recorded in the financial statements at 31 December 20X3.
What would the total assets figure in the Statement of Financial Position, and the adjusted profit for
the year figure, be after adjusting for this error?
Total assets (SOFP) Profit for year
A $700,000 $200,000
B $600,000 $100,000
 C $725,000 $225,000
D $600,000 $75,000

5. Riga Ltd offers a 4% early settlement discount to any customer who pay within 7 days of receiving an
invoice. Riga Ltd sold goods priced at £1,500 on credit to a customer who is expected to take advantage of
the early settlement discount.

What is the double-entry to record this transaction (ignore VAT)?

A. Debit: Trade receivables: £1,500, Credit: Revenue: £1,500

B. Debit: Trade receivables: £1,440, Credit: Revenue: £1,440
C. Debit: Revenue: £1,440, Credit: Trade receivables: £1,440
D. Debit: Revenue: £1,500, Credit: Trade receivables: £1,500

6. Tallinn Ltd purchased goods on credit from Oslo Ltd. When Tallinn Ltd recorded the purchase invoice in its
ledgers, it did not expect to take advantage of the early settlement discount terms.However, Tallinn Ltd
has now decided to take advantage of the early settlement discount terms and make early payment to
Oslo Ltd.

What double-entry should Tallinn Ltd use to record the payment made to Oslo Ltd (ignore VAT)?

A. Debit: Cash at bank, Debit: Purchases, Credit: Trade payables

B. Debit: Trade payables, Debit: Purchases, Credit: Cash at bank
C. Debit: Trade payables, Credit: Cash at bank, Credit: Purchases
D. Debit: Trade payables, Credit: Cash at bank

7. Virgil made a sale on credit at a list price of £10,000, an amount which was then subject to trade discount
of 10%. In addition, settlement discount of 5% was available to the customer if they paid within 14 days of
receipt of invoice. At the point the sale, Virgil did not believe that the customer would take advantage of
the early settlement discount terms.

What accounting entries would Virgil make in the nominal ledger to record this transaction (Ignore VAT)?

A. Debit Receivables £8,640, Credit Revenue £8,640

B. Debit Receivables £9,600, Credit Revenue £9,600
C. Debit Receivables £9,000, Credit Revenue £9,000

8. Joe made sales of £33,300, excluding VAT and purchases of £33,300 including VAT. All sales and purchases
are on credit and subject to VAT at 20%

What amount was recorded for receivables?

A. £33,300
B. £39,960
C. £27,750
D. £6,660

9. Michael purchases goods for resale on credit from Julie at a cost of £3,240, inclusive of VAT at 20%. Both
Michael and Julie are required to account for VAT.

What accounting entries are required for Michael to record this transaction?

A. Debit Purchases £3,340, Debit VAT £648, Credit Payables £3,888

 B. Debit Purchases £2,700, Debit VAT £540, Credit Payables £3,240
C. Debit Payables £3,240, Credit Purchases £2,700, Credit VAT £540
D. Debit Payables £3,888, Credit Purchases £3,340, Credit VAT £648

10.
Astral Ltd sold goods to Cosmic Ltd priced at £900. Astral Ltd offered Cosmic Ltd a discount of 4% for early
settlement within 7 days of invoice date. At the point of sale, Astral Ltd did not expect Cosmic Ltd to take
advantage of the early settlement discount terms. However, Cosmic Ltd did subsequently pay within 7 days
of invoice date to take advantage of the early settlement discount terms.

What accounting entries should Astral Ltd post to account for the settlement of the amount due from Cosmic
Ltd (Ignore VAT)?

A. Debit Cash £900, Debit Revenue £37.50, Credit Receivables £937.50

B. Debit Cash £900, Debit Receivables £900
C. Debit Cash £864, Debit Revenue £36, Credit Receivables £900
D. Debit Cash £864, Credit Receivables £864

11.
Goods invoiced at £36 had been returned by Crabby Ltd to the supplier for a full refund. The only accounting
entries made for the return were to debit the purchases account with £63 and credit the suspense account
with £63.

Which of the following journal entries should be made to correctly record the return in the nominal ledger?

A. Dr Suspense £63, Cr Purchases £63

B. Dr Suspense £63, Cr Trade Payables £63
C. Dr Suspense £63, Dr Trade payables £36, Cr Purchases £99
D. Dr Trade payables £27, Cr Purchases £27

12.
Marie’s draft accounts show a loss of £25,000 for the year. Upon investigation, you discover the following:

1. A purchase of plant and equipment on the last day of the year costing £3,000 had had been incorrectly
recorded as a repair expense.

2. Cash of £800, received in respect of a debt written off last year had been credited to receivables.

3. Closing inventory includes items costing £2,000 which were sold and delivered to the customer on the year
end date.

What is the adjusted loss for the year?

A. £25,200
B. £23,200
C. £30,800
D. £26,800

13.
The VAT account in Britney Ltd's nominal ledger currently shows output tax and input tax for the quarter at
£232,618 and £142,319 respectively. A review of the account highlights the following:

1. £5608 of VAT on invoices received has been posted to output tax

2. VAT of £4201 on sales has been posted to the debit of the VAT account

3. VAT on a purchase invoice with a total invoice value (including VAT) of £126 has not been recorded at all.

The correct balance on the VAT account is:

A. £93,092 receivable
B. £87,464 payable
C. £84,464 receivable
D. £93,092 payable

1c 2a 3d 4b 5b 6c 7c 8b 9b 10c
11c 12b 13b