Free Financial Accounting Aptitude Test

1. Excel Limited purchased land for  US $ 2.5 million from Why Limited by issuing a note payable. What was the effect on the accounting equation?

2. An error of _________occurs when an amount is entered right and in the correct account but the value is wrong (i.e. it’s subtracted instead of added or vice versa.

3. Zawadi Enterprises has a weekly payroll of US $ 3,600 paid on Saturdays. There are six days in a pay period. Assuming the last day of the Month of March falls on a Thursday, which of the following is the required adjusting journal entry?

4. TRUE or FALSE: Enterprise Resource Planning (ERP) is a fully integrated and comprehensive, end-to-end solution that covers all (or almost all) facets of a business, whereas accounting software is designed to manage only one specific area of a business.

5. The following transactions were extracted from the books of ABC Enterprises for the year ended 30 June 2023:

Required
What amount of income from operations should ABC Enterprises report on its multiple-step income statement based on this data?

6. Which of the following is most indicative of the liquidity of a company?

7. Pwani Limited reported a receivable debit balance of US $ 900,000 on December 31, 2022. The company anticipates that some customers will not pay and estimates that US $ 65,750 will not be converted into cash. Additionally, the allowance for doubtful debts on December 1 started with a balance of US $ 10,000. How will Pwani’s accountant account for the allowance for doubtful debts on December 31, 2022?

8. Joana borrowed US $ 3,840 from the Rafiki bank, issuing a 7.5 %, 6-month promissory note on January 1, 2022. What will be Rafiki's entry on the date of payment?

9. Dhahabu’s accounting year ends on December 31. On December 31, 2021, the company issued US $ 500,000 of 6%, 5-year bonds at 100. Interest is payable semi-annually. The journal entry to record the semi-annual interest payment on June 30 would be:

10. Ndovu Limited has 90,000 shares of US $ 5 par value common stock outstanding. On June 1, the Board of Directors declared a 3 percent stock dividend. The market value of the stock was US $ 8 on June 1. The effect of the declaration and issuance of the stock dividend for Ndovu Limited would include a:

11. The following table shows data concerning cash received or paid from various transactions for Mazizi Limited.

Required
How much is net cash provided by investing activities in the statement of cash flows?

12. Which of the following methods of calculating the bad debt provision would be unacceptable?

13. ________costs refer to the expenses that cannot be directly attributed to the production process but are necessary for operations, such as electricity or other utilities needed for the manufacturing plant

14. Use the following Table to answer the next three questions (14-16):

14. In February, Juma converted TZS 5,000 into ZAR. In May, this is converted back into what value in GBP?

15. In January, Malia converted KES 10,000 into BIF. Into what GBP value did she convert this amount in April?

16. In January, Salama converted GBP 1,000 into SSP. Into what KES value did she convert this amount in March?

17. A sole trader has debtors of US $ 6,500, creditors of US $ 5,200, and a cash/bank balance of US $ 3,900. His current ratio is 4:1. His closing stock figure is:

18. If opening stock is US $ 9,600; closing stock is US $ 16,000; sales are US $ 128,000, and mark-up on cost is 15%, the stock turnover ratio is:

19. The amount paid for rent during the year ended 31 December 2022 was US $ 6,600, which represented an 8% increase on the payment for the previous year. If the prepayment on 1 January 2022 was US $ 3,000, then the expense for the year ended 31 December 2022 is:

20. At the end of a financial year, Chui’s debtors were 25% greater than they were at the start. Credit sales during the year were equivalent to 15 times the value of debtors at the start. If cash received from debtors amounted to US $ 150,000, then closing debtors are: