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Single entry and incomplete records MCQs

Which of the following is used to work out the balance of cash drawings for
an accounting period?
A) Debtor account
B) Credit account
C) Cash payments journal
D) Cash book

Closing balance of cash can be obtained by drawing up a
A) Balance sheet
B) Statement of affairs
C) Income statement
D) Cash account

A method wherein omitted information is determined in the first place and by using this
information net income or loss is ascertained is known as
A) nominal method
B) Cash method
C) Conversion method
D) Net profit method

If creditors balance was $1000 at 1 Jan 2012, ending balance of creditors was $2000 on 31 Dec
2012 and a payment of $500 was made to creditors, which of the following is the amount of

purchases made during the year 2012?

A) $2500
B) $500
C) $1500
D) $2000

If debtors balance was $2000 at 1 Jan 2012, credit sales made during the year were $1000 and the
total payments of $1500 were received from debtors, which of the following is the debtors account
balance at 31 Dec 2012 ?
A) $1000
B) $2000
C) $1500
D) $500

Net profit + operating expenses = ?
A) Cost of goods sold
B) Amount of sales
C) Net sales
D) Gross profit

Calculate the amount of net income or loss if the capital has been increased by $1000 during
this accounting period, drawing = $5000 and $1000 fresh capital was introduced in the business
A) $5000 net loss
B) $5000 net profit
C) $6000 net loss

D) $6000 net profit

Magner determined that Wells Fargo had been duplicitous and misleading and ordered the
bank to pay $27,000 in damages and attorneys fees. She also took the unusual step of requiring
the servicer to audit about 400 home loan files in cases in the Eastern District of Louisiana.
Wells fought successfully to keep the results of the audit under seal, and last summer a federal
appeals court overturned the part of Magners ruling that required the audit. But two people
familiar with the results told iWatch News that Wells Fargos audit had turned up accounting
errors in nearly every loan file it reviewed.
The latest example of Wells bad behavior in Magners courtroom that has come to a resolution of
sorts is another case of Wells overcharging a borrower. In this suit, Jones v. Wells Fargo, filed in
2007, involved a borrower having to sue Wells to recoup overcharges by Wells plus actual
damages, plus a request for punitive damages. The ruling sets forth the sorry history in some
detail and I strongly suggest you
mounts were due because Wells had violated the bankruptcy stay because it applied payments
made during the bankruptcy to charges that had not been authorized by the court and thus in
violation of the plan of reorganization. She ruled Wells conduct to be willful and egregious. The
ruling noted (emphasis ours):
Despite assessing postpetition charges, Wells Fargo withheld this fact from its borrower and diverted
payments made by the trustee and Debtor to satisfy claims not authorized by the plan or
Court. Wells Fargo admitted that these actions were part of its normal course of conduct,
practiced in perhaps thousands of cases.
Wells agreed with Magner to remedy certain systemic problems with its record keeping. In this
ruling, the court also awarded Jones over $67,000 in compensatory sanctions.
Four months after the initial ruling on this case, the Stewart case (the one with the clearly bogus
broker price opinions) was filed. The violations were identical to the ones in the Jones case, and this
took place after Wells had agreed to fix this sort of accounting problem . Among other things,
applying payments to fees first, when they are required to go to principal, interest, and escrow first,
which resulted in improper amortization, which then led to additional interest, default fees and costs
being incurred. Those additional charges were done without obtaining approval of the court and
were flat out not permitted (this is a blatant violation of well established procedures in bankruptcy,