Sole traders

On 31 January 2020, Hassan possessed the following assets. No liabilities existed on 31 January 2020. Which entries will appear in Hassan’s statement of financial position on 31 January 2020?

Feb/March 2020

On 1 February 2019, a business gave the information below. non-current assets $75\,000$ current assets $40\,000$ current liabilities $25\,000$ For the year ending 31 January 2020, the business earned a profit of $10\,000$. During that year, the owner took no drawings. What amount of capital was there on 31 January 2020?

Feb/March 2020

Mui runs a household appliance store. For his own personal use, he took a washing machine from the business. Mui recorded the transaction in this way. account debited: drawings account credited: sales Were these the correct entries to record this transaction?

Feb/March 2020

The restaurant owner is worried that operating costs are too high. Which statement will display the operating costs for the year?

Feb/March 2023

At the end of the year, a service business gave the following information. non-current assets $16\,000$ trade receivables $150$ capital $14\,100$ trade payables $800$ What was the balance at the bank?

Feb/March 2023

Samir runs a shop. To set his selling price, he increases the cost of his stock by 50%. He took stock for personal use costing $100 but did not pay for it. How ought this to be recorded in the accounts?

Feb/March 2023

In Amarjit’s books, the year-end closing balances were as follows: non-current assets $25\,000$, trade receivables $11\,000$, bank overdraft $3\,000$, other payables $600$. What was the value of Amarjit’s capital at the end of the year?

Feb/March 2024

Which type of business is not a service business?

Feb/March 2024

The owner of a business withdrew goods for personal use but did not record this in the accounts. What effect did this error have?

Feb/March 2024

Sara operates as a trader. She has drawn up her income statement for the year ended 31 December 2023, which shows a profit for the year of $20 180. She has closed the ledger accounts for income and expenses and has moved the closing inventory into the income statement. The balances below are still in Sara’s ledger at 31 December 2023: Premises (cost) $100 000 Fixtures and fittings (cost) $40 000 Accumulated depreciation on fixtures and fittings $15 000 Inventory (at 31 December 2023) $6 275 Trade receivables $8 540 Provision for doubtful debts $427 Trade payables $5 125 Bank overdraft $4 900 Cash $350 Long-term loan $12 000 Wages (accrued) $1 000 Capital (at 1 January 2023) $115 793 Drawings $19 260

Feb/March 2024

A business has both a book-keeper and an accountant. Which task is carried out by the accountant?

Feb/March 2025

The following effects have occurred from a transaction: assets: fall liabilities: fall capital: rise The business does not have a bank overdraft. Which transaction took place?

Feb/March 2025

What is one drawback of operating a business as a sole trader?

Feb/March 2025

What appears in the capital and liabilities section of a business's statement of financial position?

Feb/March 2025

Uzoma gave the following figures for her first year of trading: - sales $46\,000$ - gross profit $21\,850$ - advertising $2700$ - other expenses $11\,350$ - profit for the year $7800$ Uzoma hopes to raise her profit in future and is looking at four possible options. Which option would result in the greatest increase in her profit for the year?

Feb/March 2025

Viraj is a retailer. He purchases on credit and sells for cash. He also lets part of the shop to another business for $172 per month. Viraj’s trial balance on 31 January 2025 was as follows: Viraj Trial balance at 31 January 2025 Debit / Credit Revenue (Credit) $89600 Rental income (Credit) $2580 Sales returns (Debit) $2195 Inventory at 1 February 2024 $4500 Purchases $53700 Rent and insurance $8760 General expenses $2945 Wages $7350 Stationery and advertising $710 Bank charges $143 Fixtures and fittings at cost $12500 Provision for depreciation of fixtures and fittings (Credit) $3750 Trade payables (Credit) $3125 Bank overdraft (Credit) $1260 Capital (Credit) $7793 Drawings $15305 Totals $108108 Further information 1 Inventory at 31 January 2025 was valued at $5900. 2 Depreciation on fixtures and fittings is to be charged at 15% per annum using the straight-line method. 3 Rental income included the amount due for the period from 1 February 2025 to 30 April 2025. 4 At 31 January 2025, Viraj owed $282 for wages and $55 for advertising. 5 Once the trial balance had been prepared, Viraj received a bank statement showing that bank charges of $13 had been paid in January 2025.

Feb/March 2025

What benefits come with operating as a sole trader?

May/June 2021

Which items would be shown in the income statement for a service business?

May/June 2021

What causes the owner’s capital to increase?

May/June 2021

For the year ending $31$ March $2021$, Nula gave the information below. Drawings in the year $\$3900$, net assets on $1$ April $2020$ $\$60500$, net assets on $31$ March $2021$ $\$72275$. What was the profit or loss for the year ending $31$ March $2021$?

May/June 2021

Carl, a trader, withdrew goods from the business for his own personal use. The goods cost $100$, and $8$ carriage had been paid to have them delivered to the business. How should this be entered in Carl’s accounts in the books of the business?

May/June 2021

What causes the owner’s capital to increase?

May/June 2021

James works as an accountant and runs his own business as a sole trader. Which of these would not be included in his statement of financial position?

May/June 2021

Zaha works as a consultant and earns fees from clients. How would Zaha work out his profit for the year?

May/June 2021

Nula gave the following figures for the year ended 31 March 2021: drawings during the year $3\,900$ net assets on 1 April 2020 $60\,500$ net assets on 31 March 2021 $72\,275$ What profit or loss was made for the year ended 31 March 2021?

May/June 2021

What causes owner’s capital to rise?

May/June 2021

James works as an accountant and is a sole trader. Which items would not be shown in his statement of financial position?

May/June 2021

Zaha is a consultant who earns fees from clients. How would Zaha work out his profit for the year?

May/June 2021

Nula gave the information below for the year ended 31 March 2021. What was the profit or loss for the year ended 31 March 2021?

May/June 2021

Sally’s business has already used up the bank overdraft limit of $1500$ and cannot settle its debts as they become due. Sally is thinking about these options. 1. requesting that the bank raises the overdraft limit to $2000$ 2. taking $2000$ from a relative and repaying it in six months 3. getting a $2000$ loan from the bank that is repayable in two years 4. transferring $2000$ from Sally’s personal bank account into the business bank account Which of these options would increase the business’s working capital?

May/June 2021

Fatima trades as a sole trader and prepares financial statements up to 31 March each year. On 31 March 2022, the balances in Fatima’s ledger accounts were as follows. Revenue $79400 Sales returns $3970 Purchases $36500 Rent and rates $9000 Wages $10100 General expenses $1287 Insurance $1800 Discount received $1095 Inventory at 1 April 2021 $3000 Fixtures and equipment at cost $80000 Fixtures and equipment - provision for depreciation $39040 Trade receivables $6400 Trade payables $4995 Provision for doubtful debts $156 Cash drawings $8580 Capital at 1 April 2021 $59000 The extra information is given below. 1 Inventory at 31 March 2022 amounted to $3120. 2 In the year ended 31 March 2022, Fatima withdrew goods for personal use from the business. These goods had cost $1300. 3 Depreciation on fixtures and equipment is to be charged at 20% per annum using the reducing balance method. 4 Accrued wages at 31 March 2022 were $800. 5 Rent includes a payment of $1500 for the 3 months from 1 March 2022 to 31 May 2022. 6 An irrecoverable trade receivable of $200 is to be written off. 7 The provision for doubtful debts is to be set at 3% of trade receivables.

May/June 2022

Padma began operating a business on 1 April 2022 using $\$30000$ of her own funds. On 31 March 2023, her assets and liabilities were listed as follows. Machinery at net book value: $\$38000$ Other assets: $\$15000$ Long-term loan from bank: $\$16500$ What was Padma’s capital on 31 March 2023?

May/June 2023

A trader made an entry on the credit side of the income statement and on the debit side of his capital account. What transaction is shown by this double entry?

May/June 2023

Although Hassan earned a profit of $7000$, his capital fell by $200$ during the year. Which transactions brought about this?

May/June 2023

Which items in a statement of financial position do descriptions 1, 2 and 3 match?

May/June 2023

What information is shown by a business’s statement of financial position?

May/June 2023

Which parts of a statement of financial position do descriptions 1, 2 and 3 refer to? 1 finance and other resources contributed by the owner 2 amounts due for goods supplied, unpaid expenses and loans advanced to the business 3 property owned by the business, sums owed by customers, unsold goods and cash in the bank

May/June 2023

Which set consists entirely of service businesses?

May/June 2023

What information is shown by a business's statement of financial position?

May/June 2023

‘Unlimited liability’ is one disadvantage of running a business as a sole trader. Which explanation correctly describes unlimited liability?

May/June 2024

'Unlimited liability' is one of the drawbacks of trading as a sole trader. Which statement correctly explains unlimited liability?

May/June 2024

Which item counts as a current asset?

May/June 2024

Which items are presented in a statement of financial position?

May/June 2025

During the year, a trader’s assets went up by $25\,000$ while his liabilities fell by $5\,000$. He made no drawings in that year. What was the profit or loss for the year?

May/June 2025

Janice began trading on 1 January. Every sale she made was for cash. Over the year, Janice paid wages of $12\,100$ and withdrew drawings of $7\,800$ from the money collected from customers. She also paid $56\,000$ of these receipts into the bank. By the end of the year, she still had $150$ of sales not yet banked, kept as cash. Which value for Janice’s sales was entered in the income statement?

May/June 2025

By what method is owner's equity worked out?

May/June 2025

Gustav started a business on 1 January 2023 with capital of $\$50\,000$. For the year ended 31 December 2024, the information provided was as follows: - opening capital balance: $\$58\,000$ - extra capital introduced: $\$2\,000$ - drawings made during the year: $\$9\,880$ - closing capital balance: $\$60\,156$ What profit did Gustav earn in 2024?

May/June 2025

What items are presented in a statement of financial position?

May/June 2025

Over the year, the trader’s assets went up by $25\,000$, whereas his liabilities went down by $5\,000$. No drawings were taken during the year. What profit or loss did he make for the year?

May/June 2025

A trader supplied the information below. revenue $120\,000$ inventory held at the beginning of the year $9\,600$ inventory at the end of the year $10\,200$ A mark-up of $25\%$ is applied. What was the total of purchases for the year?

May/June 2025

Which items would not appear in an income statement prepared for a service business?

Oct/Nov 2020

The following details were supplied by a trader: - capital on 1 October 2019: $52\,000$ - motor vehicle introduced into the business by the trader: $3500$ - personal expenses paid from the business bank account: $1500$ - cash drawings taken during the year: $500$ What was the capital on 30 September 2020?

Oct/Nov 2020

Meesha gave the following figures for her first year of trading. sales (1000 units at $10 each): $10\,000 cost of sales (1000 units at $4.50 each): $4\,500 gross profit: $5\,500 During her second year of trading, Meesha lowered the selling price and sold 1500 units. Her gross profit fell by $250. The cost per unit did not change. What was the total value of sales in the second year of trading?

Oct/Nov 2020

What does the owner’s equity comprise?

Oct/Nov 2020

Which of the following items would not appear in an income statement prepared for a service business?

Oct/Nov 2020

A trader supplied the following information. Capital as at 1 October 2019: $\$52\,000$. Motor vehicle introduced into the business by the trader: $\$3500$. Personal expenses settled from the business bank account: $\$1500$. Cash drawings taken during the year: $\$500$. What was the capital at 30 September 2020?

Oct/Nov 2020

What are the advantages of trading as a sole trader? 1. The owner is able to retain all of the profit. 2. The owner can obtain finance by issuing debentures. 3. The owner can take decisions on their own. 4. The owner benefits from limited liability.

Oct/Nov 2021

Hassan is a trader. Over the financial year, he took goods from the business for his own personal use. How should he record this?

Oct/Nov 2021

Beth gave the information below. Net assets on $1\ \text{January}$: $\$28\,000$ Net assets on $31\ \text{December}$: $\$24\,000$ During the year, her drawings totalled $\$3000$. What profit or loss did Beth make for the year?

Oct/Nov 2021

Which option is an advantage, and which option is a disadvantage, of operating as a sole trader?

Oct/Nov 2021

What items are included in the capital and liabilities section of a business’s statement of financial position?

Oct/Nov 2021

The owner of a sole trader business settled the business overdraft with his own personal money. In what way was the statement of financial position affected?

Oct/Nov 2021

Beth gave the information below. Net assets on 1 January stood at $28000$ and on 31 December they stood at $24000$. Her drawings for the year totalled $3000$. What profit or loss did Beth make for the year?

Oct/Nov 2021

What advantages come from operating as a sole trader?

Oct/Nov 2021

Hassan is a trader. In the financial year, he withdrew goods from the business for personal use. How should he record this?

Oct/Nov 2021

Beth gave the details below. Net assets on 1 January: $28000$ Net assets on 31 December: $24000$ Her drawings for the year were $3000$. What was Beth’s profit or loss for the year?

Oct/Nov 2021

In Roshan’s first year of trading, his sales amounted to $55000$. His gross profit margin was $20\%$. The closing inventory stood at $3200$. What were the purchases for the year?

Oct/Nov 2021

Which transaction will raise both assets and capital by the same amount?

Oct/Nov 2022

Which transaction will raise both assets and capital by an equal amount?

Oct/Nov 2022

At 1 June 2021, Sue’s capital account showed a credit balance of \$120000. Over the year ending 31 May 2022, she took goods with a cost of \$1800. The loss for that year was \$14200. What credit balance did Sue’s capital account have at 1 June 2022?

Oct/Nov 2022

Anika owns property that she lets to university students. She has achieved a steady profit in every year she has traded. Her trial balance at 31 August 2022 was as follows. Additional information: 1. On 31 August 2022, rent received of $8100 had been received in advance. 2. On 31 August 2022, general expenses of $1300 had been paid in advance and rates of $3400 were still payable. 3. The insurance figure includes $1800 paid for the 15 month period ending 30 November 2022. 4. $9000 spent on new fittings has been entered under repairs. 5. Depreciation is to be charged as follows: Premises: in equal annual instalments on cost over a 50 year period. Fittings: 20% per annum using the reducing balance method. A full year's depreciation is charged on fittings in the year they are bought.

Oct/Nov 2022

BC, a sole trader, drew up the trial balance from his accounting records on 31 August 2022. Extra information: 1 The inventory left on hand at 31 August 2022 had a value of $12000. 2 Commission received of $800 was still outstanding at 31 August 2022. 3 The salaries balance covers the 11 months up to 31 July 2022. Salaries for August 2022 are due but unpaid. There have been no pay rises during the previous 12 months and the same amount is paid every month. 4 At 31 August 2022, rates were prepaid by $300. 5 The insurance figure included $700 for a private insurance premium for BC. 6 Included in repairs was $4000 connected to a new attachment for machinery. 7 Machinery is to be depreciated at 20% per annum by the reducing balance method. A full year’s depreciation is charged whatever the purchase date. There were no disposals during the year. Premises are not depreciated.

Oct/Nov 2022

Anika owns property that she lets to university students. She has earned a profit in every year since she started trading. Her trial balance at 31 August 2022 was as follows. Additional information 1 At 31 August 2022, rent received of $8100 was paid in advance. 2 At 31 August 2022, general expenses of $1300 were paid in advance and rates of $3400 were owing. 3 The insurance includes $1800 paid for the 15 month period ending 30 November 2022. 4 Expenditure of $9000 for new fittings has been recorded in repairs. 5 Depreciation is to be provided as follows: Premises by equal instalments on cost each year over a 50 year period. Fittings 20% per annum by the reducing balance method. A full year’s depreciation is charged on fittings during the year of purchase.

Oct/Nov 2022

Which action does not decrease the owner’s capital?

Oct/Nov 2023

State one benefit of trading as a sole trader.

Oct/Nov 2023

At the close of her financial year, Emma gave the following figures. fees receivable from clients amounted to $78000 rent receivable was $11000 office expenses came to $20000 motor expenses totalled $9000 drawings were $2000 What profit did she make for the year?

Oct/Nov 2023

A trader gave the data below. total purchases $25301 purchase returns $1945 carriage inwards $748 goods taken for own use $1425 What was the net amount for purchases in the income statement?

Oct/Nov 2023

The business’s capital is greater at the end of year 2 than it was at the end of year 1. No extra capital was added during year 2. What does this indicate?

Oct/Nov 2023

At her year end, a trader provided the information below. What was the trader’s capital?

Oct/Nov 2023

A trader's capital is $24\,400$. His non-current assets amount to $16\,100$, and his current liabilities are $4500$. He has no non-current liabilities. What is the value of his current assets?

Oct/Nov 2023

Which action does not lower the owner’s capital?

Oct/Nov 2023

What is one advantage of running a sole trader business?

Oct/Nov 2023

At the close of her financial year, Emma gave this information: fees receivable from clients $78000; rent receivable $11000; office expenses $20000; motor expenses $9000; drawings $2000. What was her profit for the year?

Oct/Nov 2023

A trader gave the following information: total purchases $25301; purchase returns $1945; carriage inwards $748; goods taken for own use $1425. What was the net figure for purchases in the income statement?

Oct/Nov 2023

A business has a greater amount of capital at the end of year 2 than it had at the end of year 1. No further capital was added during year 2. What does this indicate?

Oct/Nov 2023

Nala runs a business retailing toys and games. Every sale is for cash, whereas every purchase is made on credit. She has supplied the following details. At 31 August 2023: Inventory $6265; Cash at bank $992; Trade payables $4880; Capital $125000 For the year to 31 August 2023: Revenue $98420; Purchases $78130; Expenses $11325 Inventory on 1 September 2022 was recorded at $6175.

Oct/Nov 2023

By the close of her first year of trading, Zoe had $6500 in her business bank account. She then introduced $5000 of her own money into that account. From this sum, she used $2000 to pay back a business loan. What impact would these transactions have on her assets, capital and liabilities?

Oct/Nov 2024

What is one drawback of operating as a sole trader?

Oct/Nov 2024

Sahil removed goods from the business for personal use. The cost of these goods was $60 and their selling price was $100. Which entry was made in the drawings account to record this taking of goods?

Oct/Nov 2024

Which items are recorded in the income statement for an accountancy business?

Oct/Nov 2024

A jewellery retailer adds a $100\%$ mark-up to his goods. He gave the following figures: revenue $68\,200$, discount received $1080$, profit for the year $18\,395$. What were his total expenses?

Oct/Nov 2024

By the close of her first year of trading, Zoe had $6500 in her business bank account. She then added $5000 of her own cash to the business bank account. From this sum, she used $2000 to pay back a business loan. What impact would these transactions have on her assets, capital and liabilities?

Oct/Nov 2024

What is one drawback of operating as a sole trader?

Oct/Nov 2024

Sahil removed goods from the business for his own personal use. The cost of these goods was $60$ and their selling price was $100$. Which entry would have been made in the drawings account to record this withdrawal of goods?

Oct/Nov 2024

What do liabilities mean?

Oct/Nov 2025

Who is employed in a service business? 1. a hairdresser 2. an estate agent 3. a car mechanic 4. a car salesperson

Oct/Nov 2025

Across a one-year period, a business’s assets rose by $22\,000$ while its liabilities fell by $6000$. In that same period, the owner added a further $4000$ of private funds to the business and removed $7000$ for personal use. What was the profit for the year?

Oct/Nov 2025

What is one reason for calculating the profit of a sole trader?

Oct/Nov 2025

What causes the owner’s capital to rise?

Oct/Nov 2025

Tim wanted to start a new business. Why did he choose to operate as a sole trader instead of forming a limited company?

Oct/Nov 2025