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accountant of trans Tld noticed a difference in debit and credit side of trial balance of 8131$.
which of the following errors would have the effect of reducing the difference when corrected?
A) the petty cash balance of 500$ has been omitted from the trial balance
b) 400$ received for rent of part of the office has been correctly recorded in the cash book and debited to rent account.
c) no entry has been made in the records for cash sale of 2500$
d) 3000 paid for repairs to plant has been debited to the plant asset accountWhich one of the following would cause a company’s gross profit percentage on sales to fall?
A Sales volume has declined.
B Closing inventory is lower than opening inventory.
C Some closing inventory items were included at less than cost.
D Selling and distribution costs have risen.In mock exam the answer is B but in acca past exam (02_12) the answer is C.
which one is correct?
Thank you in advance@joseph89 said:
accountant of trans Tld noticed a difference in debit and credit side of trial balance of 8131$.
which of the following errors would have the effect of reducing the difference when corrected?
A) the petty cash balance of 500$ has been omitted from the trial balance
b) 400$ received for rent of part of the office has been correctly recorded in the cash book and debited to rent account.
c) no entry has been made in the records for cash sale of 2500$
d) 3000 paid for repairs to plant has been debited to the plant asset accountThe answer is depend on the difference whether is debit balance or credit balance. if the suspense account of 8,131 is debit then B will reduce the difference but if the suspense is credit balance, so A will reduce the difference.
@joseph89 said:
Which one of the following would cause a company’s gross profit percentage on sales to fall?
A Sales volume has declined.
B Closing inventory is lower than opening inventory.
C Some closing inventory items were included at less than cost.
D Selling and distribution costs have risen.The true answer is C because :
A – Sales volume decrease or increase doesn’t affect on gross profit margin because with change in the sales volume subsequently the sales revenue and cost of sales also will be changed.
B – If the closing inventory is lower than the opening inventory with decrease in the purchases the margin ratio could be fixed. Therefor, just this criteria is not enough for change in the margin ratio.
C – When the closing inventory contains some items at less than their cost definitely the cost of sales will be increased, so the gross profit also will be decreased, therefor the margin percentage will be decreased.
D – Selling and distribution cost are not parts of the gross profit. They are figures that represented after the gross profit. actually, these are parts of operating profit.Good luck
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