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help required - asad.ahmad - 10-02-2006
Please guide me how to solve the following MCQs of ACCA 1.1
1.A business commenced with capital in cash of $1000. Inventory costing $800 is purchased on credit, and half is sold for $1000 plus sales tax, the customer paying in cash at once.
The accounting equation after these transactions shows -
A. Assets $2575 less liabilities $975 equals capital $1600
B. Assets $1775 less liabilities $175 equals capital $1600
C. Assets $2175 less liabilities $975 equals capital $1200
D. Assets $2575 less liabilities $800 equals capital $1775
2.A credit balance of 917 brought down on Y co.âs account in the books of X co.
Means
A. X co. owes Y co. $917
B. Y co. owes X co. $917
C. X co. had paid Y co. $917
D. X co. is owed $917 by Y co.
3.Which of these would not be regarded as capital expenditure
A. Purchase of van
B. Delivery charge of van
C. Cost of having the radio fitted to the van
D. Cost of insurance for the van
4. Net profit was calculated being $10200. It was later discovered that capital expenditure of $3000 had been treated as revenue expenditure, and revenue recipts of $1400 had been treated as capital receipts.
The correct net profit should have been
A. $5800
B. $8600
C. $11800
D. $14600