CAT Review Qs

Sunday, July 23, 2017 9:50 AM

FA2 Managing Financial Records

Chap 1 Practice Questions
Lecturer: Christine Colon, ACCA

Name:
Group: Date:

1 A sole trader had opening capital of $10,000 and closing capital of $4,500. During the
period, the owner introduced capital of $4,000 and withdrew $8,000 for her own use.
What was her profit or loss during the period?

A $9,500 loss
B $1,500 loss
C $7,500 profit
D $17,500 profit

2 Arthur had net assets of $19,000 at 30 April 20X7. During the year to 30 April 20X7, he
introduced $9,800 additional capital into the business. Profits were $8,000, of which he
withdrew $4,200.

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 withdrew $4,200.
What was the balance on Arthur’s capital account at 1 May 20X6?

A $5,400
B $13,000
C $16,600
D $32,600

3 The following transactions relate to Max's business:

1 May Purchase of goods for resale on credit $300
2 May Max injects long term capital into the business $1,400
3 May Payment of rent made $750
5 May Max withdraws cash from the business $400
7 May Sales made on credit (goods originally cost $600) $1,200

At the start of the week, the assets of the business were $15,700 and liabilities
amounted to $11,200.

At the end of the week, what is the amount of Max's capital?

A $5,350
B $1,400
C $850
D $1,000

4 A business borrowed $1,700 from its bank and used the cash to buy a new computer.
How is the accounting equation affected by these transactions?

Assets Liabilities
A Unchanged Decreased

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 Assets Liabilities
A Unchanged Decreased
B Unchanged Increased
C Increased Increased
D Increased Decreased

5 Andrea started a taxi business by transferring her car, worth $5,000 into the business.
What are the accounting entries required to record this?

A Dr Capital $5,000
Cr Car $5,000
B Dr Car $5,000
Cr Drawings $5,000
C Dr Car $5,000
Cr Capital $5,000
D Dr Car $5,000
Cr Bank $5,000

6. A sole trader had opening capital of $12,000 and closing capital of $14,500. During the
period, the owner made a loss of $13,000 withdrew $7,500 for his own use.

What was capital introduced into the business during the year?

A. $6,000
B. $8,000
C. $23,000
D. $18,000

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