16. In a business's books, the ledger account of Gar Mack, a creditor, shows a debit balance ofR450. What does this mean?a. Gar Mack has paid R450 to the businessb. Gar Mack owes the business R450c. The business has paid Gar Mack R450d. The business owes Gar Mack R45017. A truck cost R800 000. The price included R3 600 for petrol. The total payment of R800 000was debited to the Truck Account. What is correct entry to record the purchase?a. Dr Vehicles R803 600 Cr Bank R803 600b. Dr Vehicles R800 000 Cr Bank R800 000c. Dr Bank R800 000 Cr Vehicles R800 000d. Dr Bank R803 600 Cr Vehicles R803 60018. A vehicle costing R200 000 is depreciated by 20% per annum on the diminishing balancemethod. What is the depreciation charge at the end of the second year?a. R32 000b. R40 000c. R64 000d. R80 00019. An invoice for an expense owing shown in the Statement of Financial Position is shown as aa. Current assetb. Non-current assetc. Current liabilityd. Non-current liability

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16. In a business's books, the ledger account of Gar Mack, a creditor, shows a debit balance of R450. What does this mean? a. Gar Mack has paid R450 to the business b. Gar Mack owes the business R450 c. The business has paid Gar Mack R450 d. The business owes Gar Mack R450

16. In a business's books, the ledger account of Gar Mack, a creditor, shows a debit balance of R450. What does this mean? a. Gar Mack has paid R450 to the business b. Gar Mack owes the business R450 c. The business has paid Gar Mack R450 d. The business owes Gar Mack R450

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

16. In a business's books, the ledger account of Gar Mack, a creditor, shows a debit balance of
R450. What does this mean?
a. Gar Mack has paid R450 to the business
b. Gar Mack owes the business R450
c. The business has paid Gar Mack R450
d. The business owes Gar Mack R450
17. A truck cost R800 000. The price included R3 600 for petrol. The total payment of R800 000
was debited to the Truck Account. What is correct entry to record the purchase?
a. Dr Vehicles R803 600 Cr Bank R803 600
b. Dr Vehicles R800 000 Cr Bank R800 000
c. Dr Bank R800 000 Cr Vehicles R800 000
d. Dr Bank R803 600 Cr Vehicles R803 600
18. A vehicle costing R200 000 is depreciated by 20% per annum on the diminishing balance
method. What is the depreciation charge at the end of the second year?
a. R32 000
b. R40 000
c. R64 000
d. R80 000
19. An invoice for an expense owing shown in the Statement of Financial Position is shown as a
a. Current asset
b. Non-current asset
c. Current liability
d. Non-current liability

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