Financial statements of a sole proprietor quiz: O-Level Principles of Accounts (SEAB/Cambridge 7087) quiz

The purchase of a delivery van

Repairs to a delivery van

Fuel for the delivery van

Insurance on the delivery van

As a non-current asset in the statement of financial position

As an expense in the income statement

As part of capital

As a current liability

Purchases minus sales

Opening inventory plus net purchases minus closing inventory

Closing inventory minus opening inventory

Sales minus gross profit minus expenses

$35{,}000$

$27{,}000$

$25{,}000$

$30{,}000$

$132{,}000$

$80{,}000$

$52{,}000$

$28{,}000$

Because it has not been sold, so it is carried forward as a current asset

Because it has been sold during the year

Because it is an expense

Because it reduces the owner's capital

$85{,}000$

$65{,}000$

$35{,}000$

$50{,}000$

It reduces the expense and is a current asset

It only appears in the income statement

It increases the expense in the income statement and is a current liability

It increases the owner's capital directly

As an expense

As an addition to drawings

As a current liability

As accumulated depreciation deducted from the asset's cost to give net book value

Profit is overstated and non-current assets are overstated

Profit is understated and assets are understated

There is no effect on the statements

Only the cash balance changes

The statement of financial position as a liability

The income statement as an expense, adjusted for any accrual or prepayment

The capital section

It is ignored

The cost of sales

The closing inventory only

The profit for the year, which is added to capital

The trade payables