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Accounting Exercises and Problems: Balance Sheet and Income Statement, Exercises of Accounting

National University of SingaporeAccounting

A series of exercises and problems related to accounting principles, focusing on the balance sheet and income statement. It covers topics such as asset and capital classification, equity calculation, balance sheet preparation, and income statement analysis. The exercises provide practical applications of accounting concepts and help students develop their understanding of financial reporting.

Typology: Exercises

2023/2024

Uploaded on 11/22/2024

yune-3
yune-3 🇸🇬

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PART 1: MULTIPLE CHOICE QUESTIONS
Question 2.1 The balance sheet provides which of the following information
about an accounting unit:
a. Asset, Capital c. Business strategy
b. Revenue, expenses d. All a, b, c are correct
Question 2.2 The income statement provides which of the following information
about the accounting unit?
a. Asset, Capital c. Business strategy
b. Revenue, expenses d. All a, b, c are correct
Question 2.3 Sales transaction have received payment. The product has a cost
of goods sold 100 and a selling price of 90 (not considering the impact of VAT).
How does this transaction affect accounts on the Balance Sheet:
a. 1 asset increases, 1 asset decreases c. 1 asset increased; 1 asset
decreased; 1 capital source decreased
b. 1 asset increased; 1 asset decreased; 1 increased capital source d. 1
asset decreased; 1 increased capital source; 1 capital source decreased
Question 2.4 Sales transaction have received payment. The product has a cost
of goods sold 100 and a selling price of 90 (not considering the impact of VAT).
How does this transaction affect accounts on the Income statement:
a. Revenue increases, costs increase c. Revenue increases, costs increase,
profits decrease
b. Revenue increases, costs decrease d. Revenue increases, costs increase,
profits increase
Question 2.5 Financial statements provide which of the following information?
a. Asset, Capital c. Status of Cash in and out
b. Revenue, expenses d. All a, b, c are correct
Question 2.6 Information about profits arising during the period is provided by
which of the following financial statements:
a. Balance sheet c. Income statement
b. Cash flow statement d. a and c
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PART 1: MULTIPLE CHOICE QUESTIONS

Question 2.1 The balance sheet provides which of the following information about an accounting unit: a. Asset, Capital c. Business strategy b. Revenue, expenses d. All a, b, c are correct Question 2.2 The income statement provides which of the following information about the accounting unit? a. Asset, Capital c. Business strategy b. Revenue, expenses d. All a, b, c are correct Question 2.3 Sales transaction have received payment. The product has a cost of goods sold 100 and a selling price of 90 (not considering the impact of VAT). How does this transaction affect accounts on the Balance Sheet: a. 1 asset increases, 1 asset decreases c. 1 asset increased; 1 asset decreased; 1 capital source decreased b. 1 asset increased; 1 asset decreased; 1 increased capital source d. 1 asset decreased; 1 increased capital source; 1 capital source decreased Question 2.4 Sales transaction have received payment. The product has a cost of goods sold 100 and a selling price of 90 (not considering the impact of VAT). How does this transaction affect accounts on the Income statement: a. Revenue increases, costs increase c. Revenue increases, costs increase, profits decrease b. Revenue increases, costs decrease d. Revenue increases, costs increase, profits increase Question 2.5 Financial statements provide which of the following information? a. Asset, Capital c. Status of Cash in and out b. Revenue, expenses d. All a, b, c are correct Question 2.6 Information about profits arising during the period is provided by which of the following financial statements: a. Balance sheet c. Income statement b. Cash flow statement d. a and c

Question 2.7 Information about accumulated profits at the end of the period is provided by which of the following financial statements: a. Balance sheet c. Income statement b. Cash flow statement d. a and c Question 2.8 The accounting equation represents the balance of the Income Statement: a. Profit = revenue – costs c. Assets = capital b. Assets = liabilities + owner's equity d. Both a, b, c Question 2.9 Which measurement is used when preparing the Balance Sheet: a. Value c. Physical items b. Working time d. Both a, b and c Question 2.10 When presenting the item "Depreciation of fixed assets" on the Balance Sheet, which of the following statements is incorrect: a. Presented in the assets section c. Presented in the capital sources section b. Record negative numbers d. Both a and b Question 2.11 The indicator "Profit after tax" on the Income Statement is always equal to the indicator "Undistributed Profit after tax" on the Balance Sheet: a. True c. No conclusion yet b. False d. The two targets are always different in amount Question 2.12 The enterprise purchases raw materials that have been imported into warehouse but has only paid half of the value to the supplier. This transaction affects the Balance Sheet as follows: a. Assets increase, assets decrease c. Assets increase, assets decrease, and liabilities increase b. Assets increase, liabilities increase d. Both a, b and c Question 2.13 Which of the following reports provides information at a point of time: a. Income Statement c. Statements of cash flows b. Balance sheet d. Both a, b and c Question 2.14 Which of the following reports provides information for a period:

14 Bonus fund

15 Tools

16 Undistributed profits after tax

17 Taxes and other payable to State Budget

Other payables (paid within 6 months from 31/12/N1)

19 Raw materials

Payable to the seller (date of debt arising: 30/5/N1, payment term: 24 months)

21 Prepaid expenses (36-month allocation period)

3-year term bank borrowings (borrowings date: 1/1/N1, principal payment periodically at the end of each year)

Account Receivables (date of debt arising: 10/11/N1, payment term: 15 months)

Requirement :

  1. Classify these accounts into asset and capital.
  2. Calculate the value of existing owner's equity at the company.
  3. Prepare the balance sheet at the company at the above time. Question 2. On 1/3/N, Mr. Nam plans to establish a commercial enterprise with the following data: (Unit: 1.000 VND).
  4. Buying goods worth 500,000 from supplier X, Nam must pay 50% immediately upon purchase, the remaining balance is owed to the supplier within 12 months.
  5. To ensure a long-term supply of goods, Nam must make a long-term deposit of 200,000 at the request of the supplier.
  6. Buy land use rights and a house for office headquarters from B Real Estate Company with a purchase price of 6,000,000 (of which land use rights are worth 4,000,000). Nam pays 50% immediately, the rest is deferred over 5 years, the payment deadline is the end of each year.
  1. Purchase machinery and office equipment on deferred payment with the purchase price of 240,000, payment-term in 24 months, payment due at the end of each quarter.
  2. The amount of money needed to spend on the remaining initial activities of the business is 900,000. Requirement :
  3. Calculate the initial equity that Nam needs to set up the Company with the above data.
  4. Prepare the Company's Balance Sheet as of 1/3/N. Question 2. An initial business is established with the following data: (Unit: 1, VND).
  5. The parent company provided the subsidiary company (the unit) with cash capital of 5.000.000. There is 4/5 of this amount transferred to the unit's bank account, the remaining amount was put into the cash fund of the unit.
  6. The parent company provides the unit with an amount of inventory worth 800.000 and an amount of fixed assets worth 2.000.000. Requirement:
  7. List down all assets and equity at the enterprise.
  8. Prepare the Balance Sheet at the time the business begins to operate. Question 2. Determine and fill in the missing amount for the following cases, assuming that there are no additional equity contributions arising during the period: (Unit: 1.000 VND). Income statement Situation A Situation B Situation C Revenue 11.000 G 400 Expense A 5.200 M Net profit B H 100 Fluctuation in owner’s equity Opening balance 2.900 15.400 200 Net profit C 1.600 N Equity withdrawn in year (200) I O Closing balance 3.000 J P Balance sheet Total asset D 21.000 Q Liability 1.600 5.000 R

Question 2. At XYZ company, we have the information of revenue and expenses incurred in year 20xx as following (Unit: 1.000 VND):

  1. Total revenue from selling products and providing services: 400.000.
  2. Discount for a number of sold products: 5.000.
  3. Returned products: 4.000.
  4. Price of sold products: 150.000.
  5. Selling expenses: 25.000, General & administration expenses: 22.000.
  6. Financial income: 8.000, other income: 2.000.
  7. Financial expenses: 12.000, other expenses: 3.000.
  8. Corporate income tax must be paid at the tax rate of 20%. Requirement : Prepare the Income statement of XYZ company in year 20xx (follow the below table). INCOME STATEMENT Year …… Account Cod e Amount
  9. Revenue from operations 01 2. Revenue deductions 02
  10. Net sales (10 = 01 – 02 ) 10
  11. Cost of goods sold 11
  12. Gross profit (20 = 10 – 11 ) 20
  13. Financial income 21
  14. Financial expense Include: Interest expense
  1. Selling expenses 24
  2. General & administration expenses 25
  3. Net profit from operations [30 = 20 + (21 - 22) – (24+25) ]
  1. Other income 31
  2. Other expenses 32
  3. Other profit (40 = 31 – 32 ) 40
  4. Total profit before tax (50 = 30 + 40) 50
  5. Current tax expenses 51
  6. Profit after tax (60 = 50 - 51- 52) 60 Question 2.7: On December 1, 20xx, Mr A created a new self-storage business, Mien Nam Company. The following transactions occurred during the company’s first month (Unit: 1.000 VND):
  1. The owner invested 30.000 cash and a cargo truck worth 150.000 in the company.
  2. Rented equipment by paying 2.000 cash for the first month rent.
  3. Purchased 2.400 office supplies for cash.
  4. Paid an employee 10.000 for four week’s salary earned.
  5. Collected 9.800 cash for service fees from customers.
  6. The company billed a customer L 18.000 for fees earned.
  7. Paid 950 cash for minor repairs to a leaking roof.
  8. Paid 400 cash for this month’s telephone bill.
  9. Pay electricity and water bill at the office 1.000 by cash. Identify how each of the following separate transactions affected financial statements. For the balance sheet, identify how each transaction affects assets, liabilities, and equities. For the income statement, identify how each transaction affects net income. For the statement of cash flows, identify how each transactions affects cash flow from operating activities, cash flows from financing activities, and cash flows from investing activities. For increases, place a “+” in the column or columns. For decreases, place a “-“ in the column or columns. If both an increase and a decrease occur, place “+/-“ in the column or columns.