The Advanced Numeracy Test Workbook - Mike Bryon [9]
D None of these
Answer C
All questions are of the type illustrated in the example above so none require a calculator.
Do not turn the page until you are ready to begin.
Allow yourself 12 minutes to attempt all the questions.
Q1. Accelerated depreciation:
A Is a method that allows greater amounts to be deducted in the early years of the life of an asset
B Assumes equal depreciation during each year of an asset’s life
C Is permitted under the straight-line method of depreciation
D None of these
Answer
Q2. Accounts payable are:
A A list of the entities to which a company owes money
B A list of current debtors
C A list of the salaries due
D A list of creditors
Answer
Q3. The accounts receivable ledger is:
A A list of the customers that owe sums to the company, showing each transaction and a balance
B A record of transactions and their effect on the bank account balance
C An accounting record of all payments received
D A type of financing in which the money owed to a company is used as the security for working capital advanced by a bank
Answer
Q4. Apportionment by direct allocation means:
A To allocate taxable income on a basis proportionate to payroll expense
B To allocate income and expenditure item by item
C To allocate expenditure and income by an agreed formula
D None of these
Answer
Q5. Which of the following is not true of a balance sheet?
A The debt and credit side must be equal
B The credit side shows liabilities
C It provides a summary of the revenue, costs and expenses
Answer
Q6. In accounting, the year end is:
A The date when dividends are announced
B The end of the fiscal year
C The date when an accounting year ends
D New Year’s Eve
Answer
Q7. A trial balance is:
A An empirical method for testing scientific theories
B A list of debits and credits, which should balance
C A record of the balance of payments of a country with the rest of the world
D A small batch of a new product to test a production line
Answer
Q8. Single entry bookkeeping involves:
A Journals
B Ledgers
C Balancing debits and credits
D None of these
Answer
Q9. The payee is:
A The organization or person to whom a debt should be paid
B Abbreviation for the ‘pay as you earn’ excise duty
C The person who pays a bill
Answer
Q10. Which of the following is still to be deducted from an operating profit?
A The cost of sales
B The pay of employees
C The cost of depreciation and taxes
D The cost of premises and rents
Answer
Q11. Net worth is:
A The value of someone’s assets
B A person’s salary after tax
C The amount that the value of an asset exceeds liabilities
D The return on an investment
Answer
Q12. A journal is:
A A tradesperson
B A book of accounts
C A record of a transaction
D A ledger
Answer
Q13. Accrued income is:
A The amount of interest payable on a loan
B The interest derived from an investment
C The rate of interest net of taxes
D Interest on credit cards
Answer
Q14. Intercompany transactions are:
A Trading activities between companies that are a part of the same group of companies
B Business to business transactions
C Trading events that do not count as earnings
D None of these
Answer
Q15. A study that would precede the sale of a company and would test the validity of the available financial information is called:
A Audit inspection
B Full disclosure
C Force majeure
D Due diligence
Answer
Q16. The paying out of money to partially clear debts is:
A A cash distribution
B A disbursement
C A discharge
D A deferment
Answer
Q17. The term for someone or an organization to which money is owed is:
A Creditor
B Credit
C Debtor
D Debt
Answer
Q18. To write down an asset is:
A To enter it on to an accounting system
B To transfer the balance of an account on to a loss account
C To record an asset’s decrease in value
D To increase the recorded value of an asset
Answer
Q19. A term that means a receivable that is unlikely to be paid is:
A Unearned income
B An unlimited liability
C Tax deductible
D An uncollectable account
Answer