Association of Chartered Certified Accountants · Financial Accounting
ACCA FA Double entry and accounting systems: practice questions with answers
3 free exam-style questions on Double entry and accounting systems for ACCA FA Financial Accounting. Try each one, then open the answer to read the explanation. Fincora has 15 original questions on this syllabus area.
Question 1
Tarrant Co returned faulty goods to a supplier and received a credit note for them. In which book of prime entry should Tarrant Co first record the credit note?
- A Sales returns day book
- B Purchase day book
- C Purchase returns day book
- D Cash book
Show the answer
Answer: C. Credit notes received from suppliers are first recorded in the purchase returns day book. Its totals are then posted: Dr Payables ledger control account, Cr Purchase returns, with the individual entries posted to the suppliers' accounts in the payables ledger.
Question 2
Bexley Co both sells goods to, and buys goods from, Strand Co. Bexley Co has agreed with Strand Co to set off (contra) $1,250 owed by Strand Co against the amount Bexley Co owes to Strand Co. Which journal entry should Bexley Co make in its general ledger?
- A Dr Receivables ledger control account $1,250; Cr Payables ledger control account $1,250
- B Dr Payables ledger control account $1,250; Cr Bank $1,250
- C Dr Sales $1,250; Cr Purchases $1,250
- D Dr Payables ledger control account $1,250; Cr Receivables ledger control account $1,250
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Answer: D. A contra sets off a receivable against a payable with the same party. Both balances fall by the same amount, so the payables ledger control account is debited and the receivables ledger control account is credited with $1,250. Matching entries are made in Strand Co's accounts in the receivables and payables ledgers.
Question 3
Which of the following would Morton Co first record in the journal, rather than in one of its other books of prime entry?
- A A sale of goods on credit to a regular customer
- B The depreciation charge for the year on its delivery vehicles
- C A cash refund paid to a customer who had returned faulty goods
- D Goods returned by a credit customer, for which a credit note was issued
Show the answer
Answer: B. Each book of prime entry records a particular type of transaction:
| Book | Records |
|---|---|
| Sales day book | Credit sales invoices |
| Sales returns day book | Credit notes issued to customers |
| Purchase day book / purchase returns day book | Supplier invoices / credit notes received |
| Cash book (and petty cash book) | Receipts and payments |
| Journal | Items not recorded elsewhere: year-end adjustments such as depreciation, accruals and allowances, correction of errors, and unusual items such as credit purchases of non-current assets |
The depreciation charge is therefore first recorded in the journal.
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