ICAEW ACA Certificate Level · Accounting Fundamentals

Adjustments to accounting records

12 practice questions, each with the answer and an explanation.

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Random questions from this topic, one at a time. You see the answer and the explanation straight after each one.

All 12 questions

  1. A trial balance shows debits exceeding credits by £360, and the difference is put to a suspense account. It is later found that a cash payment of £180 for rent was debited to the cash account instead…
  2. Depreciation for the year was debited to the non-current asset cost account instead of the depreciation expense account, and the credit to accumulated depreciation was correct. What type of error is t…
  3. Office equipment costing £3,000 was debited to the purchases account. What is the effect of correcting this error on the profit for the year, ignoring depreciation?
  4. A cheque for £800 received from a customer was debited to the bank account but credited to sales instead of to receivables. Which journal corrects the error?
  5. A machine that cost £24,000 was bought on 1 January and has not been depreciated at all. The policy is 10% a year straight line, and the year end is 31 December. What is the effect of the omission?
  6. Closing inventory at the end of year 1 was overstated by £5,000. Which statement describes the effect on profit?
  7. A prepayment of insurance of £900 and an accrual for electricity of £400 were both omitted from the draft accounts. What is the net effect on profit?
  8. An irrecoverable debt of £500 was written off in the previous year. The customer unexpectedly pays £500 in the current year. How is this recorded?
  9. The following two errors are found. Sales were overcast by £100 in the sales account, and purchases were overcast by £100 in the purchases account. Which statement is correct?
  10. A cash sale of £450 was recorded by debiting sales and crediting cash, the exact reverse of the correct entry. Which journal corrects the error?
  11. Draft profit for the year is £62,000. The following are then discovered: accrued wages of £1,800 were not recorded; depreciation of £6,000 on new equipment was not charged; closing inventory was overs…
  12. The owner of a sole trader business paid a personal bill of £1,000 from the business bank account, and it was debited to wages. Which journal corrects it?

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