ACCOUNTING TEST 2

GRADE 10
BOOKS OF PRIME ENTRY
15 April 2024
Time: 1 hour15 minutes Marks: 75

NAME: ....................................................................

Question TOPIC MARK ACHIEVED

1 Multiple Choice /7
2 Double Entry Bookkeeping /24
3 Books of Prime Entry /5
4 Source Documents /15
5 Cash Book /20
6 Balancing Accounts /4
Total /75

1
QUESTION 1 MULTIPLE CHOICE (7)
Circle the correct answer.
1.1. Which of the following is not a liability?
A. Trade payables
B. Trade receivables
C. Bank loan
D. Mortgage

1.2. A new small business is operating in a period of economic uncertainty.

What is its most likely objective.
A. Survival
B. Profit maximization
C. Market share growth
D. Market dominance.

1.3. Which of the following best describes the imprest system?

A. A system where cash and bank transactions are recorded within the same
account.
B. The transfer of money between cash and bank accounts
C. Ensuring that petty cash is always maintained at the same amount at the
start of each period
D. Using several columns to record separate categories of expenditure.

1.4. Which of the following is the best description of the term profit
maximization
A. Earning more profit than all other businesses.
B. Earning more profit than in all previous years
C. Earning as much profit as possible
D. Maximising spending by the business.

1.5. Which of the following is correct?

Assets ($) Liabilities ($) Owner’s equity ($)
A 80 910 24 151 57 759
B 4 414 1 312 4 102
C 27 909 12 311 15 598
D 41 411 31 747 8 664

2
 1.6. Where is the purchases account located? ____________
A. Purchases journal
B. Purchases ledger
C. General journal
D. Nominal ledger

1.7. Jaswant purchase goods from Ali and paid in cash. Which entries would
Ali make in his ledger?
Account to be debited Account to be credited
A Cash Sales
B Jaswant Sales
C Sales Jaswant
D Sales cash

QUESTION 2 DOUBLE ENTRY BOOKKEEPING (24)

For each of the following transactions, state which account should be debited and
which account should be credited. The first one has been done for you.

Debit Credit
(a) Wages paid from bank account Wages Bank
(b) Goods sold on credit to Anelle
(c) George – a customer – pays amount owing through
online banking.
(d) Obtained a loan from Nedbank
(e) Owner brings own vehicle into business use.
(f) Computer sold to Brian on credit
(g) Rent received by cheque
(h) Brian returns computer as it was faulty
(i)Equipment sold to Johanna
(j) Returned furniture to Ivaan as it was wrong colour.
(k) the owner takes goods for personal use
(j) Bought inventory using cheque
(k) Repaid loan from Nedbank using internet banking.

3
QUESTION 3 BOOKS OF PRIME ENTRY (5)
For each of the following, state in which journal you would record the transaction.

Transaction Journal/ Book

of Prime Entry
(a) Sale of goods on credit
(b) Owner’s van brought into business for business use
(c) Car purchased on credit for business use
(d) Inventory purchased on credit
(e) Inventory sent back to original supplier due to its
unsuitability

4
QUESTION 4 SOURCE DOCUMENTS 15
Draw up an invoice with full details based on the following information:
• Your business name and address: Miguel sandwich shop, 31 Head Street,
Oldtown, OTA ISN
• Customer name and address: Hamman Business Conferences, Unit 12,
Business Park, Oldtown, OT4 7XJ
• Details of sale: 50 mixed vegetarian sandwiches ($1,20 each), 25 fish
sandwiches (1,40 each), 20 savoury platters ($3 each) (order placed on 11
May 2024)
• Discount: Trade discount of 10%.
• Invoice number 204BN

............................................
....................................
...........................
.....................
INVOICE

To: .............................. invoice no: ..................

.................................... Date: .........................
....................................
....................................
Quantity Description Unit price ($) Total ($)

Trade discount 10%

TOTAL

5
 QUESTION 5 CASH BOOK (20)

A. Use the following details to prepare a cash book for the month April 2024.
(a) 1 April Opening balances as follows: Bank $ 1750; Cash $88
(b) 3 April Purchases of $152 paid for by cheque.
(c) 5 April Commission received in cash $45
(d) 8 April Payments made by cheque to credit suppliers on invoice totals
as follows:
Bernat $320
Julia $120
A 5% discount is given by both credit suppliers.
(e) 12 April Payment is received by cheque for $344 from a credit customer,
Sahar. The payment is for an invoice totalling $370, that is, the
difference represents discount allowed.
(f) 14 April Cash taken by the owner $50
(g) 24 April Cheques are sent to credit suppliers as follows:
To Juan for an invoice total of $400
To Ariel for an invoice total of $200.
In each case, a discount on the invoice of 2,5% is given by the
Supplier.

B. State TWO reasons why a business would choose to maintain a cash book
and a petty cash book at the same time. (2)

........................................................................................................
.......................................................................................................

C. State which ledger the totals for discount allowed and received would be
posted to at the end of the month. (1)

.......................................................................................................

E Give one reason why businesses allow customers to trade on credit. (1)

................................................................................................................

6
QUESTION 6 BALANCING ACCOUNTS (4)

Balance the following account

Purchases Account

April 1 Balance b/d 54 000 April 20 Drawings 7 500

April 18 Bank 27 000 April 30 Cool. Cat 13 000

April 27 K. Vitamin 20 000

TOTAL: 75 marks