Self-Test 1

Problem:

The following is a set of transactions during the month of May, 2012 for the business of Jess
Consulting Office. The chart of accounts shows the following accounts:
Jess Capital 300, Withdrawals 320, Cast at Bank 100, Advertising Expense 520, Wages
Expense 525, Prepaid Advertising 112, Prepaid Rent 114, Tax Service Fees 405, and
Consulting Revenue 400. The balance of cash account at 1
st
of May 2012 is $10,000.

May 2. Jess Barley invested $30,000 more into the business bank account.
May 3. Hired a part time employee to be paid $200 fortnightly, starting tomorrow.
May 6. Paid two years rent in advance, $7,200.
May14. Recorded revenue earned and received for the week, $1,500.
May 15. Paid the workers fortnightly wage $200.
May 16. Paid advertising for June, July & August on The West Australian $300
May 24. Received payment for finishing a clients tax return, $800
May 25. Withdraw $1,000 from the business
Required: prepare the Cast at Bank T- account for Jess Consulting Office to reflect the
relevant transactions. Total the account and show balance.






Date Details Amount Date Details Amount



















Cast At Bank

Choose the best answer from the options following the questions below:


1. End of year records from Abbi's Boutique show:
$
Cash 50
Salaries Payable 10
Interest Revenue 180
Rent Expense 100
Interest Expense 50
Interest Receivable 100
Prepaid Rent 30
Salary Expense 20
Rental Income in Advance 20

From the accounts above, during the closing process the total debits to the Income
Summary would be:

a) $ 200
b) $ 90
c) $110
d) $170
e) $180

2. Which of the following accounts would not appear in a post-closing trial balance?

a) Revenue receivable
b) Gain on sale of a non-current asset
c) Dividends payable
d) Accumulated depreciation equipment
e) None of the above


3. The bookkeeper recorded wages for the month as a debit to the Income account rather
than as a debit to Wages Expense. This error will result in:
a) Understated equity at the end of the period
b) Understated assets at the end of the period
c) No effect on net profit of the period
d) Overstated net profit for the period
e) None of the above

End of Self-Test 1