Cambridge IGCSE and Cambridge O Level Accounting 0452 / 7707
Chapter # 2
Double Entry System
Past Paper MCQs
1. What is the accounting equation?
A assets less liabilities equals capital
B assets plus liabilities equals capital
C capital less liabilities equals assets
D capital plus assets equals liabilities
2. Which ledger entries record the purchase of a
machine bought on credit from John Smith?
A debit John Smith, credit machinery
B debit John Smith, credit purchases
C debit machinery, credit John Smith
D debit purchases, credit John Smith
3. Which transaction is recorded in the purchases
ledger?
A
B
C
D
cash purchases
cheque paid to a Trade Payables
cheque received from a Trade Receivables
purchase of non-current (fixed) assets
4. A customer returns goods to a supplier.
How does the supplier record this in his ledger?
6. Jane made a payment to a supplier for goods
bought on credit.
What is the effect on the accounting equation?
A decrease capital and decrease assets
B decrease liabilities and decrease assets
C increase assets and decrease liabilities
D increase liabilities and decrease capital
7. Which account usually has a credit balance?
A
B
C
D
capital
cash
motor vehicles
purchases
8. What are assets?
A items that are expected to be turned into cash in
the near future
B items that are owned by or owed to a business
C items that are owned by or owed by a business
D items that are purchased for long-term use by a
business
9. Winston returned goods to Hanif.
Which entries will Winston make in his ledgers?
5. Tony owns a bookshop. He sells a book to
Susie who pays cash.
How will Tony record this transaction?
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10. Which statement is correct?
15. Which is a noncurrent asset of an engineering
company?
A An asset is always a credit entry.
B An expense is always a credit entry.
C An expense is always a debit entry.
D A liability is always a debit entry.
A
B
C
D
factory premises
long term loan
trade receivables
inventory
11. Which is a noncurrent asset?
A
B
C
D
16. Which item would be recorded by a credit
entry in an account?
bank balance
trade receivables
motor vehicles
inventory
12. P. Smith is making a list of his assets and
liabilities.
Which is a liability?
A
B
C
D
A a decrease in capital
B a decrease in liabilities
C an increase in assets
D an increase in capital
17. How is the cash purchase of goods for resale
entered in the ledger?
computer
Trade Payables
loan to J. Jones
premises
13. Rent is paid to J. Perigo in cash.
How is this recorded?
18. Which best describes the assets of a business?
A cash and items that should turn into cash in the
near future
B cash invested by the owner of the business
C items bought for long term use by the business
D items owing to or owned by the business
14. Bob returns goods bought on credit from
Tariq.
Which ledger account entries record this in
Tariq’s books?
19. Which is a current liability?
A
B
C
D
long-term loan
owner's capital
trade payables
trade receivables
20. Sami returns goods bought on credit from
Javed.
How is this recorded in Javed’s books?
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21. A trader took goods costing $100 for his own
use. How is this recorded in the ledger?
A
B
C
D
debit drawings, credit inventory
debit drawings, credit purchases
debit inventory, credit drawings
debit purchases, credit drawings
22. Zafar returns goods bought on credit from
Khalid.
How is this recorded in Zafar’s books?
26. Which is a debit balance?
A
B
C
D
capital
asset
liability
revenue
27. A business bought a computer for the office
and paid by cheque.
How will the business record the transaction?
23. Which increases owner’s capital?
28. What is a current asset of a sports goods
shop?
A bank loan extended from five to ten years
B purchase of machinery by cheque
C purchase of stock on credit
D transfer of vehicle to business from private use
A
B
C
D
24. In Smith's books the ledger account of Brown
shows a credit balance of $1200.
What does this mean?
29. In Tony's ledger, Gordon's account shows a
debit balance of $5000.
What does this mean?
A Brown bought goods, $1200, from Smith.
B Brown owes Smith $1200.
C Smith has paid $1200 to Brown.
D Smith owes Brown $1200.
A
B
C
D
25. Joe is owed $500 by a customer.
How does this appear in Joe’s books?
30. A trader commenced business with a gift of
machinery from his father.
What will be the accounting entry?
trade payables
fixtures and fittings
shop premises
stock of footballs
Gordon has paid Tony $5000
Gordon owes Tony $5000
Tony has paid Gordon $5000
Tony owes Gordon $5000
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35. What is the correct entry for office furniture
bought on credit from X?
31. A cheque has been received from X, a trade
receivable.
How is this transaction recorded in the books?
36. What is the purpose of double entry
bookkeeping?
A to apply the dual aspect concept
B to avoid errors
C to prepare books of prime entry accurately
D to record revenue and capital transactions
correctly
32. A business buys goods on credit.
Which entries should be made?
33. A garage business buys a motor van which
will be used for business purposes only. In which
account will this transaction be recorded?
A
B
C
D
capital
motor expenses
motor vehicles
purchases
37. Brown charged Jones for carriage on goods
delivered to Jones’ premises.
What entries will Brown make in his ledger?
38. Goods for re-sale are bought for cash.
What are the entries in the books of the
purchaser?
34. Which is a noncurrent asset?
A
B
C
D
computer equipment
Trade Receivables
motor vehicle repairs
rent
39. A business bought a computer for the office
and paid by cheque. How will the business record
the transaction?
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Cambridge IGCSE and Cambridge O Level Accounting 0452 / 7707
A a credit balance on a supplier’s account
B a credit balance on the bank account
C a debit balance on a customer’s account
D a debit balance on the drawings account
40. Which account would have a credit balance?
A
B
C
D
45. A trader buys a motor vehicle, for use in his
business, on credit from J. Sango.
How is this recorded in the trader’s ledger?
capital
carriage inwards
carriage outwards
cash
41. Y’s account appears in the ledger of X as
follows.
46. Which is a liability?
A items of value owned by a business
B money owed by the business
C money owed to the business
D total expenditure of the business
Which statement is true?
A On 1 January Y was owed $100 by X.
B On 10 January Y paid $100 into the bank.
C On 20 January Y supplied goods $400 to X.
D On 31 January Y was a debtor of X for $400.
42. Which is a personal account?
A
B
C
D
Trade Receivable
office computers
plant and machinery
wages
43. A business purchases a motor vehicle on
credit. What is the effect of this?
A
B
C
D
47. What would be classed as drawings in the
accounting records of a sole trader?
A cash withdrawn from bank for office use
B cash withdrawn from bank for petty cash
C cash withdrawn from bank for trader’s
business expenses
D cash withdrawn from bank for personal use
48. A trader invested $4000 into the business.
$2000 was used to pay a credit supplier. The rest
of the money was paid into the business bank
account.
What changes would take place within the
accounting equation?
It increases noncurrent assets.
It increases owner’s capital.
It reduces net profit.
It reduces the bank balance.
44. Which is an asset?
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49. Which statement about the division of the
ledger is not correct?
A Checking procedures can be introduced.
B Fewer entries are needed in the sales and
purchases accounts.
C It is easier for reference and for locating
accounts.
D Work can be shared between two or more
book-keepers.
53. Abdul is a trader in office furniture. He buys
furniture on credit from Farad for use in his own
business.
How will Abdul record this transaction?
50. Which will increase the current assets?
A payment of a creditor’s invoice by cheque
B receipt of a cheque from a bank loan
C receipt of cash from a trade receivables
D repayment of a bank loan by cheque
54. Jacob bought goods on credit from Mark.
What is the double entry in Jacob’s ledger?
51. Ann is a trader. On 1 April 2011 Cindy’s
account in Ann’s ledger showed a credit balance
of $520. The following transactions took place
during April 2011.
April 2 Ann returned goods, $30, to Cindy
14
Ann bought goods, $210, from Cindy, and
paid in cash
55. Sarah sublets part of her premises to Ruth.
A cheque for rent has been received from Ruth.
How will Sarah record this in her ledger?
Which statement is true about the balance on
Cindy’s account in Ann’s ledger on 30 April
2011?
A
B
C
D
Ann owes Cindy $490.
Ann owes Cindy $700.
Cindy owes Ann $490.
Cindy owes Ann $700.
52. Smith sold goods on credit to Green.
What entries will Green make to record this?
56. Jane, a trader, withdrew $50 from the
business bank account for office use.
How is this recorded in Jane's books?
57. X receives a cheque from a customer and
pays this into his business bank account.
How does this affect X’s current assets?
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60 A business showed non-current assets, current
assets, current liabilities and non-current
liabilities.
What equals owner’s capital?
A current assets – current liabilities
B non-current assets
C total assets – current liabilities
D total assets – total liabilities
58. A trader provided the following information.
Capital
Current assets
Non-current assets
Current liabilities
$
250 000
26 000
300 000
15 000
What was the total of the non-current liabilities?
A $35 000
B $61 000
C $76 000
D $91 000
59 Melanie provided the following information.
Non-current assets
Amount owing by credit customers
Amount owing to credit suppliers
Inventory
Bank overdraft
$
14 000
1 250
850
1 875
365
61. A business provided the following
information.
$
Inventory
2880
Bank overdraft
750
Trade receivables
1600
Trade payables
1950
Loan from bank
2000
Loan to employee
150
Other payables
70
Other receivables
130
What was the total of the liabilities?
A $4420
B $4770
C $4830
D $4920
62. Faraz buys and sells new and used motor
vehicles. He purchased a used motor vehicle from
Tahir for $7000 which he paid for by cheque.
How would Faraz record this transaction?
What was Melanie’s capital?
A $12 160
B $15 110
C $15 910
D $16 640
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