Question

1. A pre-adjustment trial balance reflects the balances and totals of accounts in the general ledger before any adjustments are made. • True • False 2. The two types of accounts that are used to determine the profitability of an entity are the income and expenses. • True • False 3. If no interest income is earned, the operating profit of a sole proprietorship may be determined by adding the interest expense to the net profit. • True • False 4. A debtor who was declared insolvent was able to pay R270 of the amount owing, which represented 60% of his debt. The balance of his account must be written off. Which of the following statements is correct? ) A. Equity will decrease by R162. ) B. The bank balance will be credited i ) C. Debtors control will decrease by R. ) D. The bad debt amounts to R180. 5. When adjustments are recorded at the end of a financial year, which of the following results in an increase to the nominal account concerned? • A. Accrued expenses and Accrued • B. Accrued expenses, Accrued incr • C. Accrued income and Consumab • D. Accrued expenses, Accrued incr 6. The values in financial statements must be adjusted to reflect the effects of inflation before they are presented to the users. • True • False 7. The profit will be lower when an adjustment is made in the statement of comprehensive income for rent received in advance for the next financial year. • True • False 8. Which of the following statements is true? • A. Assets are recorded in the finan‹ • B. Accountants should be optimistic • C. Expenses must be recorded as : • D. The consistency concept allow meaningful comparisons betwee 9. Which user group would be interested in the financial statements of companies to determine whether anomalies exist in respect of under-declared income and assets? • A. Potential investors • B. Employees • C. Tax collection agencies • D. Banks 10. The following information was extracted from the accounting records of MS Stores on 28 February 2023, the end of the financial year: Opening inventory on 01 March 2022 R60 000, Inventory purchases R780 000, Returns of inventory to suppliers R30 000, Carriage on purchases R24 000 and Cost of sales R684 000. What was the value of the inventory on 28 February 2023? O A. R150 000 • B. R180 000 • C. R126 000 • D. R210 000

1. A pre-adjustment trial balance reflects the balances and totals of accounts in the general ledger before any adjustments are made.
• True
• False 2. The two types of accounts that are used to determine the profitability of an entity are the income and expenses.
• True
• False 3. If no interest income is earned, the operating profit of a sole proprietorship may be determined by adding the interest expense to the net profit.
• True
• False 4. A debtor who was declared insolvent was able to pay R270 of the amount owing, which represented 60% of his debt. The balance of his account must be written off. Which of the following statements is correct?
) A. Equity will decrease by R162.
) B. The bank balance will be credited i
) C. Debtors control will decrease by R.
) D. The bad debt amounts to R180. 5. When adjustments are recorded at the end of a financial year, which of the following results in an increase to the nominal account concerned?
• A. Accrued expenses and Accrued
• B. Accrued expenses, Accrued incr
• C. Accrued income and Consumab
• D. Accrued expenses, Accrued incr 6. The values in financial statements must be adjusted to reflect the effects of inflation before they are presented to the users.
• True
• False 7. The profit will be lower when an adjustment is made in the statement of comprehensive income for rent received in advance for the next financial year.
• True
• False 8. Which of the following statements is true?
• A. Assets are recorded in the finan‹
• B. Accountants should be optimistic
• C. Expenses must be recorded as :
• D. The consistency concept allow meaningful comparisons betwee 9. Which user group would be interested in the financial statements of companies to determine whether anomalies exist in respect of under-declared income and assets?
• A. Potential investors
• B. Employees
• C. Tax collection agencies
• D. Banks 10. The following information was extracted from the accounting records of MS
Stores on 28 February 2023, the end of the financial year: Opening inventory on
01 March 2022 R60 000, Inventory purchases R780 000, Returns of inventory to suppliers R30 000, Carriage on purchases R24 000 and Cost of sales R684 000. What was the value of the inventory on 28 February 2023?
O A. R150 000
• B. R180 000
• C. R126 000
• D. R210 000

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