CAT multiple-choice questions

Transcription

1 CAT multiple-choice questions by a student accountant writer 22 Dec 2004 Take your pick A selection of multiple-choice practice Questions are published below from CAT Scheme Papers 1 and 2. The answers are printed on page 66. Paper 1, Recording financial transactions Question 1 Hywel purchases goods on credit with a list price of $100. The supplier gives Hywel a trade discount of 15% and also offers a cash discount of 10% for payment within 30 days. What is the amount that Hywel will debit to his purchases account? A $ B $85.00 C $76.50 D $75.00 Question 2 Which of the following best describes an invoice? A A document produced by a purchaser detailing items purchased B A document produced by a seller detailing items sold C A document produced by a seller following the return of goods D A document produced by a seller listing monthly transactions Question 3 The following is a summary of the petty cash transactions for a week: Income $ Expenditure $ Opening balance 500 Travelling expenses 150 Sale of stamps 10 Subsistence expenses 250 Sale of paper 50 Petty cash is maintained using the imprest system.

2 What sum should be reclaimed by the cashier at the end of the week? A $150 B $340 C $400 D $500 Question 4 Which of the following is a current liability? A Closing inventory B Opening inventory C Petty cash D Bank overdraft Question 5 Which of the following errors will become apparent when drawing up a trial balance? A A credit purchase was completely omitted from the accounting records B A credit sale was recorded as a cash sale C The payment of wages was debited to the rent account instead of the wages account D A cash sale was recorded correctly in the sales account and credited in the bank account Question 6 Carion sells the following goods for cash during January: Net price $ Sales tax $ 5 Jan To Maurice Jan To Harris Jan To Merton What are the correct entries in Carion's general ledger? A Dr sales $1,799, Dr sales tax $268, Cr cash $2,067 B Dr cash $2,067, Cr sales $1,799, Cr sales tax $268 C Dr sales $1,531, Dr sales tax $268, Cr cash $1,799 D Dr cash $1,779, Cr sales $1,531, Cr sales tax $268 Question 7 Annabel's cash book shows her to be $2,030 overdrawn. A bank reconciliation, however, shows that a standing order payment for $365 had been entered in the cash book twice, and that a dishonoured customer's cheque for $275 had been debited in the cash book rather than credited.

3 What is Annabel's true overdraft position? A $1,845 B $1,940 C $2,120 D $2,215 Question 8 An employee is paid $4.50 hourly, and works Monday to Friday inclusive for eight hours daily, Saturday four hours at time-and-a-half, and Sunday five hours at double time. What is the weekly gross pay of the employee? A $ B $ C $ D $ Question 9 Iwan's payables ledger showed that $2,300 was owed to suppliers at the start of the week. During the week Iwan made purchases of $3,900 although he paid $900 of this in cash. He also paid suppliers $1,000 by cheque. What is the closing balance on his payables ledger? A $4,000 B $4,300 C $5,200 D $6,100 Question 10 What business transaction would result in the following double entry being posted? Dr Cash Cr Sales A The purchases of goods for resale on credit B The receipt of cash from a credit customer C A cash sale D The banking of petty cash Paper 2, Information for management control

4 Question 11 Which of the following defines cost classification? A The process of grouping costs according to their common characteristics B The allotment of items of cost to cost centres C The sum of all costs incurred D The use by several companies of the same costing methods Question 12 A sales representative earns a basic salary of $10,000 per annum, a guaranteed end-of-year bonus of $5,000 and 5% commission on the value of sales. What cost classification is appropriate for the sales representative's salary? A Direct cost B Product cost C Semi-fixed cost D Prime cost Question 13 Which would be the most appropriate basis for re-apportioning the cost of a factory canteen to production departments? A The number of direct operatives B Floor space occupied by production departments C Total employees in production departments D Wages paid to direct operatives Question 14 The occupancy rates for a hotel over a two-year period are shown below: Year 1 Qtr 1 Qtr 2 Qtr 3 Percentage of bedrooms occupied 60% 75% 90% Qtr 4 60% Year 2 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Percentage of bedrooms occupied 65% 85% 95% 55% Which statement is correct? A The occupancy rate for Year 1 is higher than Year 2 for quarters 3 and 4 B The occupancy rate for Year 2 is higher than Year 1 for quarters 1, 2 an d 3 C The occupancy rate for Year 2 is higher than Year 1 for all four quarters D The occupancy rate for Year 1 is higher than Year 2 for quarters 1, 2 and 3

5 Question 15 Western Limited makes four products, which are shown below: Alpha Beta Delta Sigma Contribution per unit $18 $30 $48 $13 Material X per unit (kgs) Sales demand (units) There is only 200kg of Material X Which product should Western make? A Alpha B Beta C Delta D Sigma Question 16 Which of the following indicates the effect of an unfavourable variance? A When a business has more profit as a result B When a business has less profit as a result C When a business has more sales as a result D When a business has more stock as a result Question 17 What is a computer's working memory known as? A ROM (read-only memory) B RAM (random access memory) C CD-ROM (compact disc read-only memory) D Virtual memory Question 18 Why are PINs used? A To restrict access by unauthorised personnel B To increase the capacity of the computer C To ensure employees perform their work correctly D None of the above Question 19 Which of the following factors is least important when planning a written report? A Finding an ornate font for the title B Following a logical structure C Giving clear recommendations or options for action D Giving references to previous reports on the same subject

6 Question 20 Pad Limited has the following results: Sales $100,000 Cost of sales ($20,000) Gross profit $80,000 Expenses ($30,000) Net profit $50,000 What is the net profit margin (profit to sales ratio)? A 50% B 80% C 62.5% D 200% Answers Paper 1 Q1-B, Q2-B, Q3-B, Q4-D, Q5-D, Q6-D, Q7-D, Q8-D, Q9-B, Q10-C Paper 2 Q11-A, Q12-C, Q13-C, Q14-B, Q15-A. Q16-D, Q17-B, Q18-A, Q19-A, Q20-A