Osa started business with Le 40,000 cash. The accounting entry is debit
Cash account; credit capital account
Capital account; credit cash account
Purchases account; credit cash account
Expenses account; credit capital account
Correct answer is B
Debit capital account (i.e the money used in starting a business) and credit cash
Which of the following is an example of factory overheads?
Salary of marketing officer
Salary of production officer
Salary of accounting officer
Wages of machine operator
Correct answer is A
Factory overhead is the costs incurred during the manufacturing process, not including the costs of direct labor and direct materials.
Examples of factory overhead costs include: indirect materials, indirect labor, depreciation of the factory equipment and plant, amortization of patents, the cost of small tools used, factory utilities, insurance on the factory and equipment, property taxes on plant and equipment, property taxes on materials and goods
On sales of motor vehicle
On sales of stock in trade
From trade debtors
From trading activities
Correct answer is A
Capital receipts are receipts that create liabilities or reduce financial assets. Option A is correct, because when a business sells its motor van, it leads to a reduction in assets
The addition of prime cost and factory overhead is
Total factory overheads
Market value of goods produced
Cost of goods produced
Work-in-progress
Correct answer is C
The cost of goods manufactured equation is calculated by adding the total manufacturing costs; including all direct materials, direct labor (prime cost) and factory overhead; to the beginning work in process inventory and subtracting the ending goods in process inventory.
Which of the following is a trading account item?
Discount allowed
Discount recieved
Carriage outwards
Carriage inwards
Correct answer is D
Carriage inwards is the shipping and handling costs incurred by a company that is receiving goods from suppliers. It is added to the cost of purchase and recorded in the trading account